| Support BiggerPockets Visit Our Advertisers |
|
02 May
Author: Tom Koziol • URL: http://www.homeforeclosureprofits.com/hfp.html
as Foreclosures, Real Estate Law

Readers of this blog fully understand foreclosures are on the uptick and will likely to stay that way for the remainder of the year. However, some people may not fully realize the challenges being mounted against foreclosures from all fronts.
It seems the lenders/banks have it had too easy for too long and have become complacent in their obligations to prove their standing, i.e. right to foreclose. To compound the problem, some note owners aren’t even aware foreclosure is being carried out in their name.
The Decision
Probably the most publicity generated in this arena is the Boyko decision in Ohio. It seems fed up, is a mild way to describe the feelings of the property owners in this case.
This link is a 6 page pdf download of Judge Boyko’s opinion. It has far reaching possibilities and isn’t being taken lightly by people and organizations fighting against foreclosure as is practiced today.
An article in Cleveland’s newspaper, The Plain Dealer, explains the case and some of the rational in the judge’s opinion.
You don’t have to be a rocket scientist to determine this case just may become the precedent in fighting foreclosures and winning. Since loans are usually bundled and sold off to investors as far off as China, it becomes almost impossible to sleuth out who really owns the loan.
The Implications
If the judge is correct and only the owner of the note and not the note’s servicer, originator or original lender can foreclose, the implications are huge. To bolster the argument of the fight foreclosure advocates, The Home Equity Theft Reporter has several interesting articles here and here.
To Challenge or Not to Challenge
I’m not sure who the person doing the narrative in a video titled: Make Em Produce the Note is, but his message is clear. He is telling everyone who listens to challenge their foreclosure notice by making the foreclosing party produce the note.
What is especially interesting in this arena is the homeowner isn’t restricted to only federal court. The homeowner can start at the lowest rung of the state court system and file suit against the foreclosing party.
As a side bar, it appears this is true in trust deed states as well because once the foreclosure action is started in court, the foreclosing party is stayed from proceeding any further in the foreclosure process. I am not a lawyer and I am not giving legal advice. I am a foreclosure consultant who likes to be as knowledgeable as possible.
I present the above information and sites as references and suggest to anyone in this arena to perform their own due diligence. Above all, if these court cases and theories are on the mark, the whole foreclosure landscape in this country will dramatically change.
Share ThisPopularity: 14% [?]

49 Responses
Comments
rob powell
May 2nd, 2008 at 5:54 pm
1Great post. I remember that Edward Griffin talked about this loophole a few years back but no one took him seriously…mostly because he is a known as a conspiracy theorist guy. At least I think is was Edward Griffin.
rob
Tom Koziol
May 2nd, 2008 at 7:35 pm
2I don’t recognize the name Edward Griffin but I do remember this loophole from several years back but didn’t pay close enough attention as I wasn’t an active foreclosure participant. Today, my ears and eyes are wide open to any and all ancillary activities and court cases in the field.
Luckily for us, we have the Internet today and news spreads faster than wildfire across the airwaves. If anybody has any additional info, I certainly welcome knowing it.
Tom Lindmark
May 2nd, 2008 at 10:32 pm
3It’s only a delaying tactic folks. In all of these cases there is an instrument that has been recorded that demonstrates someone has a lien on the property. The fact that the paperwork hasn’t caught up with the foreclosure proceedings doesn’t mean that there is any defect. Just another example of activist judges and the tort bar milking the system for some money. These folks will still lose their houses.
Tom Koziol
May 3rd, 2008 at 6:51 am
4Tom Lindmark may be correct in that in the end this will be viewed only as a delaying tactic. However, if I correctly read the outcome of all the cases I referenced, none of the people bringing the suits lost their homes to foreclosure.
This tells me this is more than a delaying tactic that will disappear. Again, I am not an attorney and I am not in a defensive posture on this information. I am trying to learn as much as possible.
From my legal research days, I seem to remember standing as a very integral part of bringing a lawsuit. If one does not have standing, one can not bring a suit.
Applying standing to foreclosure, if the servicer or original lender is foreclosing but no longer owns the loan, it would appear they don’t have standing. This is, in part, what Boyko said in his decision.
I must lead a dull life since I find this kind of drama exciting .
James Connery
May 3rd, 2008 at 3:54 pm
5I agree with Lindmark fully. I have several years of Law School under my belt but by no means an expert and NOT a Lawyer. I am very familiar with Code of Civil procedure in general though, and fairly in touch with CA and other states foreclosure Law. Also Federal Law is Complex!!
There are MANY delaying tactics in the case of foreclosure to include Bankruptcy, a claim of improper procedure and or service, excluding an integral party as well as a ton of other things a lawyer could bring up.
There is also a Lis Pendens that would cloud a property with a Sheriff’s Writ of Attachment during related or un related litigation, that could stall a foreclosure and or potentially force the foreclosing party to do a Judicial Foreclosure.
Here in N. Cal the court systems that deal with RE related cases (mostly evictions on foreclosed parties) are so back logged that any type of suit could really buy some time in the case of foreclosure. BUT as Lindmark mentioned most any case would be a stalling tactic that could very well backfire. Judges DO NOT like stalling tactics of ANY kind! I also do not know many lawyers that would risk their reputation with the judges to help a homeowner who can’t pay their house payment, let alone their legal expenses! Make sense?
Here’s the problem… Most folks being foreclosed on didn’t have the money to make a payment for many months, so how are they going to retain an Attorney to file and follow through with a suit in which it’s a NO BRAINER, really has no merit in MOST situations. The folks failed to pay as promised and are being foreclosed on. CA judges have NO sympathy for the situation and see the homeowners as deadbeats for the most part. The NOTE or DEED is recorded and would be filed by the defendant’s answer in the case of a suit by the homeowner, so I don’t buy that idea for a second!
Now to make matters worse, if homeowners do file suit and loose…
They now owe their Legal fee’s as well as the Defendants (lenders) Legal
fee’s and could quite possibly be liable for damages to include arrears that WOULD have been forgiven in most cases. Now they have a foreclosure and a civil judgment!!
Lets say a homeowner in foreclosure files suit and wins?? They in most cases STILL can NOT make up the arrears and or afford the payments anyways!!
We have a bill that almost passed that would have given judges the ability to modify loan terms though, scary!! That bill lost but theres similar in the pipeline. We have even had bills and threats of outright stopping all foreclosures for a period of time, and forcing lenders to re write loans to a lower interest etc. Indeed it is a mess, but for the sake of this blog topic I will stop here. GREAT TOPIC and I now look forward to reading all the mentioned material.
OHIO-Go Figure!! Only in Ohio!! LOL
I must add that there are MANY cases in litigation at present at State and Federal level in regard to the whole sub prime mess and any of those outcomes could set the stage for some very interesting “case law” to follow!!
James Connery
May 3rd, 2008 at 4:02 pm
6Not sure about that as servicers have legal authority to represent the owner of the note or deed just as a lawyer has the authority to represent their client and a property management company can act on behalf of a property owner.
In the case of foreclosure, notice all the filings “substitution of trustee”during the process of foreclosure? Trustee has legal standing and the right to foreclose on behalf of the beneficiary last time I checked.
Maybe I will have a different opinion after reading the material.
James Connery
May 3rd, 2008 at 4:25 pm
7Also, you can check out foreclosure related news and major events on http://www.DSnews.com
The default servicing industry news site.
James Connery
May 3rd, 2008 at 4:33 pm
8Very Interesting case in point here on your topic Tom…From DSnews.com
Be sure to click on all articles and search backwards thorough older articles as well.
New Jersey Office of Foreclosure Shakes Up the Process
Kerri Panchuk | 04.30.08
Attorneys representing creditors in the state of New Jersey should be advised that the New Jersey Office of Foreclosure, beginning on Thursday, May 1, 2008, will no longer accept or file a complaint unless the creditor’s attorney includes an “assignment of mortgage into the plaintiff” or the “date that the loan was acquired by the plaintiff,” according to attorneys who have been following the guideline adjustments.
SO- Exactly what you were referring to!! Things are indeed getting more complicated!!
Tom Koziol
May 3rd, 2008 at 5:00 pm
9Thanks to James Connery for his insight. I especially loved his remark:
“I also do not know many lawyers that would risk their reputation …”
(shortened on purpose)
Superbly stated as many people believe lawyers only have one reputation anyway.
My sense of humor got the best of me. Sorry. However, to put a perspective into this conversation let me remind you that the Twinkie defense won in court, lawyers not having to know the law is an actual decision made by a judge, lawyers can have sex with their clients, etc. etc. etc. I could go on with examples but I think the point is clear.
If I was a betting man, I would bet these tactics will be with us for years given the consequences behind them.
Judges also have the power to sanction an attorney for violating FRCP 11 in these foreclosure cases but don’t. Judges have all kinds of authority so to say the Note and Deed is recorded and therefore answers the question is not totally true. If it was, there would not exist the number of cases already filed and won by the homeowners.
As for the homeowners not having the money to pay attorney fees is merely an assumption and you know what happens when you assume. In one of the cases a consumer group filed the case for the homeowners which means the homeowners did not come out of pocket. I believe they would be called pro bono recipients.
As an aside, I know a lawyer who represents clients against debt collectors and doesn’t charge the client a dime. He gets paid from the losing debt collector. If he exists, wouldn’t it stand to reason there is at least one lawyer in the US of A who would file suit pro bono on behalf of homeowners?
Also, if member serves correctly, a person can still file pro se or is it pro per. If that is still true, then why can’t Joe and Mary Homeowner file their own suits? If they do, don’t the courts give them a larger leeway?
It would seem to me the law libraries in the counties aren’t closed to the citizen so there exists an educational center. If I remember right from my days in one, they even have the proper styled forms a person would file. And, to boot, there are books that show a person how to style the brief, motion, request, etc.
Imagine if the citizenry took Shakespeare serious - what a wonderful world this would be .
Rudolph Sohm in talking about German law on page 6, section 3, of The Institutes sums up our (the US of A) quandary as we know it today:
“The territory of codified private law was the territory where the formal validity of Roman private law had been set aside in favour of exhaustive local codes governing the entire private law of the land.”
So, to say the homeowners don’t have a chance is, more than likely, to misspeak. In other words, to paraphrase Sohm, a whole set of laws could be set aside. If it was done before might it not be done today?
There are other examples, civil rights probably the best known, that reinforce this thinking. But that’s my interpretation.
None of the above is meant to be anything but another perspective to think about. Until such time as this issue is stare decisis, our opinions will be of equal value as we express what we believe will be the eventual outcome in the foreclosure arena.
Tom Koziol
May 3rd, 2008 at 5:05 pm
10James Connery you are a research machine. Thank you for your valuable input into this discussion. I love it when people start talking and discussing and dissecting an issue that has as much potential impact as this one.
James Connery
May 3rd, 2008 at 5:48 pm
11Opinion:
Judge Boyko’s opinion is a NO BRAINER. Deutche rushed the”batch” of foreclosure filings prior to the filing of substitution of trustee and relied on a laxed judicial system. The opinion is from Oct 0f 07, about the time foreclosure filings really picked up pace.
I see no major impact on federal or state foreclosure laws in the findings of this case as there is no major complicated case law, points of authority, or conclusion and ruling in the matter.
Thats was a very simple matter:
Deutche was lazy and I am am sure they are no longer! They were avoiding a technical issue that is very easy to overcome. Recording and filing an affidavit identifying they were in possession of either:
Original holder of Note
Assignee
Trustee
Successor in interest
James Connery
May 3rd, 2008 at 6:11 pm
12“James Connery you are a research machine”
Talk to our friend Josh Dorkin about that statement!!
I am his research analyst and spy! LOL
Tom Koziol
May 3rd, 2008 at 7:36 pm
13Well sir, I’m glad you are at least in from the cold . Regardless of how the current actors on the stage are playing the unwritten script it would appear this matter will continue. Being a “for the little guy” type, I’m rooting for the homeowner.
I guess that last statement brings me in from the cold as well. I feel certain both of us will be watching this issue unfold. At the tender age of 63, I hope I get to see the final curtain.
Ann Cummings
May 4th, 2008 at 6:02 am
14I saw this post over on RE Voices, and followed the link. This is pretty interesting information, and the comments are as well. I’ll be re-reading this and the links included to make sure I’ve got all my facts on this. I’m sure that judge’s finding will be a wake-up call to all those involved in foreclosure proceedings!
Thanks for the research and all these details.
Tom Koziol
May 4th, 2008 at 6:27 am
15Ann, we all look forward to anything you have or may find on this issue. The better informed we all are, the better life is for everybody.
James Connery
May 4th, 2008 at 10:14 am
16So far that I know of only TWO Federal Laws pertaining to foreclosure temporary relief exist at present and as follows:
Bankruptcy
The filing of any bankruptcy action automatically stays a foreclosure proceeding, regardless of type. At that point, whether the stay will be lifted depends on whether the mortgagor has equity in the mortgagedproperty. If the bankruptcy has been filed under a Chapter 11 petition, the bankruptcy court may “terminate, annul, modify or condition such stay” for cause, including the lack of adequate protection of an interest in property of the mortgage holder, or if the mortgagor does not have equity in the property and the property is not necessary for an effective reorganization. If it has been filed as a straight bankruptcy petition, asking for discharge of all debts, the mortgage holder will be allowed to foreclose if the bankrupt debtor has no equity in the property. If there is equity in the property, the property can be sold by the bankruptcy court.
Soldier and Sailors Relief Act
The Soldiers and Sailors Relief Act of 1940 gives special protection to mortgagors on active duty in the armed forces for mortgage loans executed prior to when they went into service. The Act provides that a service person can apply to a court to set aside a default judgment leading to a foreclosure action. Because of this provision, a mortgage holder initiating a foreclosure action against a mortgagor who fails to answer the foreclosure complaint must file an affidavit with the court stating the mortgagor is not on active duty in the armed services. If the mortgagor is in the armed services, the individual must be present or represented at the foreclosure hearing, meaning foreclosure by power of sale is not available. If a court finds that the mortgagor’s ability to meet the terms of the mortgage has been affected by their service in the armed forces, they can stay the foreclosure action as long as the person is in the service.
Note:
State Statutes still prevail until some other federal law would be enacted. Here are some really good resources for the long winded reader…
Cornell Law (Mortgage Law) - A must read:
http://topics.law.cornell.edu/wex/mortgage
Foreclosure Moves Open Gray Area in Preemption - Articles - On Wall Street
http://www.onwallstreet.com/asset/article/574241/foreclosure-moves-open-gray-area-preemption.html
Click on “Federal Laws affecting foreclosure”
http://www.enotes.com/everyday-law-encyclopedia/foreclosure#federal-laws-affecting-foreclosure
James Connery
May 4th, 2008 at 10:29 am
17Tom- Questions:
You wrote:
“If it was, there would not exist the number of cases already filed and won by the homeowners.
As for the homeowners not having the money to pay attorney fees is merely an assumption and you know what happens when you assume. In one of the cases a consumer group filed the case for the homeowners which means the homeowners did not come out of pocket. I believe they would be called pro bono recipients.
As an aside, I know a lawyer who represents clients against debt collectors and doesn’t charge the client a dime. He gets paid from the losing debt collector. If he exists, wouldn’t it stand to reason there is at least one lawyer in the US of A who would file suit pro bono on behalf of homeowners?
Also, if member serves correctly, a person can still file pro se or is it pro per. If that is still true, then why can’t Joe and Mary Homeowner file their own suits? If they do, don’t the courts give them a larger leeway?”
_______________________________________________-
Being closely associated with several default servicing and loan servicing firms as well as Law Firms in this arena, I have not been aware of any substantial number of defaulted home owners in foreclosure winning cases and keeping their homes, other than temporarily stalling the foreclosure. They are in foreclosure because these failed to pay on the debt, can not afford the payments in most cases on an ARM that has adjusted and can NOT qualify for a re fi as they NEVER qualified for the original loan in reality! MOST banks these days are MORE than happy to do a forbearance and hold off foreclosure filing for MONTHS if there exists ANY chance of curing the default, re writing the loan, modifying terms or any other means. They don’t want these homes back.
Can you point to some articles that refer to folks fighting and keeping their home in the long haul via legal intervention?
Tom Koziol
May 4th, 2008 at 1:23 pm
18James:
Just walked in the door and lo and behold, James Connery is in my email. Good to see you again.
I think I will sum up my thought theology in this arena by referencing a The Georgetown Law Journal article by Judith A. Shapiro titled:
“The Shetar’s Effect on English Law - A Law of the Jews Becomes the Law of the Land”
In her published work (Vol 71:1179), Shapiro explains the law as it existed before the “Jewish Gage” (her term) filtered into English law. Summarily speaking, English law did not allow liens to attach to a person’s land. His cattle, plow, etc, yes, but not his land.
Shapiro explains how the lien (Jewish Gage) became the “source of the modern mortgage” when she quotes Rabinowitz in his work titled:
“The Common Law and the Conditional Bond”
published in a 1943 University of Pennsylvania Law Review.
Basically I believe people are attempting to revert back to the old English law of no attachment to land. They are attempting to do it through the courts which is the wrong vehicle in my opinion. I believe the courts are the vehicle of last, and not first, resort.
More on that in a moment.
Shapiro closes her article with:
“A small but significant principle in Jewish Law, wherein personal debt superseded rights in real property, had become the law of the land.”
It became that way in the manner Sohm described in his The Institutes. Since it became part of the law, everyone has assumed it can’t be changed. If I am correct about what I think you are saying in your posts, you believe that way too.
The people fighting foreclosure through the courts, and here is where you and I agree, won’t win because the black robed administrator can only administrate the law as written.
Rogue judges, as you called Boyko, probably have the same mentality as the people fighting the foreclosure. They know something is wrong and may even know what it is, but they are paycheck bound not to disclose that wrong. They are simply administrators. They are not advocates. Advocates like Franklin, Jefferson, Madison et al get chased by the king’s soldiers and hanged.
Now whether this is correct or not is another story and fodder for a different part of the blog.
Suffice it to say Shapiro has done all of us a great service by explaining how we got here from there. Let me give you my opinion on how we can back from here to there by quoting her once again.
On page 1200, she says:
“Creditors had the statutory right to execute against the debtor’s land. No longer were personal obligations and rights in land rigidly separate.”
I believe the current foreclosure crusaders have liberation thought theology squarely at the forefront of their battle. I believe they want to relegate personal obligations and rights in land to as they existed in English law.
Hence, in my opinion, the only reason to even go to court is to draw attention to the problem. Get this situation in the media and give it as much dissemination as possible.
Once it hits the public realm, you now introduce the personal obligations and rights in land separation modality and you won’t encounter much dissension from the people since they too are currently being oppressed by bad faith lenders. The published numbers tell us over 2 million people are in foreclosure.
I’ve even read (can’t remember where) that by the end of 2009, 18 million people will have lost their home to foreclosure. That is a formidable army for social change.
Social change comes about first through legislation. The courts only pass on the legislation if it is challenged. Otherwise it stands as law. That is correct, isn’t it?
Now I will segue into part of your last post where it says:
“MOST banks these days are MORE than happy to do a forbearance and hold off foreclosure filing for MONTHS if there exists ANY chance of curing the default, re writing the loan, modifying terms or any other means. They don’t want these homes back.”
Since I don’t operate all over the United States, I can’t speak for most banks. However I can speak for the lenders with which I’ve dealt. NONE of them were willing to do a forbearance or workout or modification.
It would be easy to say all of my clients couldn’t qualify and that would be the end of the story. However, the truth is, the lenders were steadfast in their denial of a workout package. One lender I spoke with told me point blank they don’t have to do anything they don’t want to do.
As far as getting the property back, that is a no brainer as well. They simply bundle them and sell them off to bulk investors. It is a mirror, to a degree, of the original bulk loan sale process.
Regardless of how the lender disposes of the REO, one cannot make the blanket statement that they don’t want these homes back. From what I see in the field, I believe they do want them back.
Real estate makes wonderful collateral and allows the Bear Stearns of the world to spin it in a different direction. After all, even non performing assets are listed on a balance sheet as having value.
Again, this is only from my part of the world and what I have personally encountered. Oh, I was even told by one lender that they no longer do short sales. They would rather have the property.
That my friend speaks volumes.
Anyway, I have rambled for a good while so I will now close up shop and have lunch. I look forward to speaking with you again.
By the way, Shapiro’s article is her title not mine. Her words are her words unaltered by me. If anyone wants a copy of her article, I will be happy to send it to them. You only have to pay the postage and copy charges as it is about 20 pages long. If it is online, all the better.
Las Vegas Real Estate Guy
May 4th, 2008 at 2:49 pm
19You know what they say, just when you think you’ve seen it all…put up a post with a trackback to this story. Unbelievable. I thought the foreclosure mess couldn’t get more complicated.
Tom Koziol
May 4th, 2008 at 2:57 pm
20Hello Las Vegas Real Estate Guy,
Thanks for the post. Yeah, IMHO, this is just the beginning. Social policy being what it is never lets the pot stay unstirred. BTW, I hope you are doing well in Las Vegas given the number of foreclosures and transient population.
Good luck!
Zach
May 4th, 2008 at 3:14 pm
21what i’m surprised in is how much $300,000 can get you throughout different locations. In one lacation it could get you a mantion, and in another location it can only get you something very small. I’ve never been able to figure that out.
Tom Koziol
May 4th, 2008 at 3:36 pm
22Zach,
Thanks for the post. BTW, I looked at your link and liked what I saw. The exhaust jack is one fantastic idea. When I had to travel between here and California I could have used it. I had a flat and was stuck on the rising side of the mountain highway.
Regardless, what makes the American dream the American dream is the pricing. Everyone has a shot because of the different pricing levels. The beauty, to boot, is each region knows its inherent value.
Joshua Dorkin
May 5th, 2008 at 8:03 am
23Zach -
I also checked out your blog and LOVE IT! Very cool stuff . . .
Sorry about changing the topic all . . . back to Tom’s post:
jaxsonsmith
May 9th, 2008 at 3:04 pm
24Wow, great post. I had no idea of these ideas.
James Connery
May 9th, 2008 at 7:34 pm
25Jax-which ideas?
James Connery
May 9th, 2008 at 9:20 pm
26Tom- Doing some informal legal research in regard to your original input about homeowners winning suits against banks and I came across this very interesting blog post. The author is a N.Y. RE Attorney.
http://realestatelaw.typepad.com/where_is_blackacre_anyway/2008/04/a-major-bank-br.html
Tom Koziol
May 10th, 2008 at 7:00 am
27James - Thanks for the case cite. Great reading. I would believe most of these loans could fall into the predatory category given the lender made them to people who couldn’t afford them. But, we’ll have to wait and see how others will attack their foreclosures.
James Connery
May 10th, 2008 at 9:27 am
28Hi Tom,
First I want to say that your post on:
Tom Koziol May 4th, 2008 at 1:23 pm
Was OVER the TOP! Some of the best writing I have seen in a while. I even commented to Josh on the phone, ask him! Still trying to wrap my brain around that!
I need to say that I have been involved in the “profit” side of foreclosures, BUT not jaded to the fact that hard working families are loosing their homes, even though one would wonder in reading some of what I write.
I spent some more time looking at some of the proposed legislature more closely as well as some of the legal stuff going on behind the scenes and I am quite blown away! Especially in regard to some of the “remedies” for home owners to include the cited case law which includes the LOAN to be wiped out in some cases!!! My GOD!
We are really just in the beginning (Part ONE) phase of the sum total to come I think!
I am thinking of a combination of Enron and Monopoly (the game) !!
Thoughts?
Tom Koziol
May 10th, 2008 at 10:21 am
29James,
Thank you for the compliment on my May 4th post. I share your opinion of us being in Part ONE of this thing called foreclosure. When I was a front line lender, the guy doing the paperwork, it amazed me that so many lenders seem to only care about the fee amount they could generate. I also was amazed at the number of people who looked at the lending arena like they look at the insurance arena.
It seemed to be OK to rip off a lender in the same manner you would rip off an insurance company. Ethics was lacking on both sides. As the front line guy, I wasn’t allowed to question anything. One episode stands out clearly.
I had a non citizen from south of the border apply for a loan. When his credit came back, he had 3 SSANs. My processor called social security and was told we couldn’t discriminate and to use the SS# he was using currently.
Mind you, we weren’t discriminating at all. We simply wanted to comply with the law as we were told it existed. All I’m saying with this example is the blame is far wider than one would expect.
So, knowing all that, one still asks, how is all this gonna shake out? My answer is, I don’t honestly know but I do know we have to have a set of WORKABLE laws and procedures that apply across the board that can’t be bent or broken.
Also, being on the profit side of foreclosure is the best all around remedy at this time because the profit siders are the ones keeping the houses occupied and the money circulating. I am proud to be on that side of the fence given it helps even those who call us names.
As for Monopoly read Modern Money Mechanics by the Chicago Fed and you will see that it is the only kind of money we’ve had in existence for almost 100 years. If you know anything at all about full faith and credit, you’ll know why gas is $4 a gallon and butter is $2+ a pound.
By the way, if you aren’t doing anything, include 12USC95(a) and (b) in your reading and you will see why your opinion doesn’t matter. Unless they’ve changed 28USC535 it should still tell you the authority of the federal police. However that’s been stretched out of shape. Waco is probably the best example of its skewered application.
Most people don’t understand the intertwineability of these events. They all leave their fingerprints on future acts and generations. The foreclosure suits and pending lawsuits are reactionary to the sores created by unlawful acts of public servants.
The real answer, in my opinion, lies in two documents. One is our Declaration of Independence. It outlines a way of life we are living today and two is the Communist Manifesto. It outlines how we are living that life.
We are the only “free” Communist government in the world. Mr. Bush has pushed us closer to reflect a Soviet style but it hasn’t been fully implemented as of yet. The groundwork is in place through Executive Orders and government agency creations.
I will stop here as this is more than you may have wished to hear on my thoughts. Having been actively involved in what was called a protest movement, I was forced to study the conditions, laws and procedures as they existed and not as we wished them to be. It is amazing what one learns when one reads the law as written and witness its application. Read footnote 14 in Brown vs. Chrysler for a mind blower.
Anyway, private property ownership is still with us for a limited time so we should enjoy it while we can. If you aren’t doing anything, research the Al Gore BS machine and you’ll see how private property rights will be usurped, at least according to me.
As always, thanks for your participation as you bring some good stuff to the table. It is refreshing to speak with someone who can think and express himself at the same time.
James Connery
May 10th, 2008 at 11:12 am
30Tom,
I will read the material you suggested and digest your comments here!!
All good stuff and NO it’s NOT more than I wish to hear!
“Having been actively involved in what was called a protest movement, I was forced to study the conditions, laws and procedures as they existed and not as we wished them to be.” Me Too!
While I am looking at the suggested reading, do take a peek at some of Mr. Mortgage Video’s here. I am sure you are aware of him. I am hoping this includes the video in which he holds up Bear Strearns underwriting criteria and reads this crap out loud! Bizzare!
DARN, I copied my favorite Mr. Mortgage videos to a word doc and just lost them in transit to post here????
Anyways, DO GOOGLE: Mr. Mortgage and enjoy some of the Video’s.
James Connery
May 10th, 2008 at 11:16 am
31BTW- I was just thinking here. Considering the banks have an average total loss by the time a foreclosure becomes REO, of 50%, why don’t these FOOLS just focus on short refi’s?
Although many never really qualified, so I guess theres no proper way to re write the loans anyways??
Tom Koziol
May 10th, 2008 at 12:28 pm
32James - I will look at Mr. Mortgage later today and for the answer to the 50% question it goes lilke this: They have a better way out. I don’t know what it is at the moment but I guarantee it exists. My guess is it is in the legislation Bush is circulating in Congress. It contains a bail out for all of the big boys.
Bear Stearns was the trial balloon and it passed with flying colors. Everyone else is next. As for the so called borrowers not qualifying for a refi, well, that just isn’t so. The qualifications are determined by the lender according to the loan applied for.
On a refi of the current loans, it would be easy to refi the person in trouble because the loans can be reworked in a number of ways. The easiest being to refi the balance over 40 years w/o a prepayment penalty.
The refi could even be in parts with the payments geared to the borrower’s current income. With no prepayment, the borrower could sell the house and get out from under the loan.
It would also (probably) entail forgiving some of the penalties and maybe all of the accrued intererst that was generated during the default. As I look at different loans and attendant charges of the people who call me, the lender wouldn’t really be eating a lot of money. In actuality, they would be getting more if they reworked the loan.
But, as I stated above, they aren’t doing it because there is a plan B. We don’t know what it is, but it is alive and well. There is no other explanation given the current foreclosure spree.
James Connery
May 10th, 2008 at 1:33 pm
33Tom-
Here is a very typical scenario here in the MOST HARD hit areas of N. CA, the Central Valley bedroom communities. Sac-Stockton, Modesto, Tracy etc. (Foreclosure Capital)
Borrowers purchased with ZERO down on an option ARM with a 1% teaser rate or similar loan. Stated income (or fudged documents-common) with a 550 fico. Income 30-40k and purchase 350k… There was NO qualifying other than a heart beat!
House went up to 550k value within a couple of years and the couple took a second with even more crazy terms and more fudged documentation.
House is NOW encumbered for 550k and value is 290K!! Along with the refi’s (using the house as a bank-traveling-new cars etc.) there are also a lot of cases where a HELOC is in the mix! ADD a BUNCH of credit cards, often used to live even larger than life and or help with the mounting loan payments.
ARMS adjusted, balloons due, anxiety and divorce imminent, burried in consumer credit debt the disease in well on coarse. MANY just leave the keys in the door and boogie!
Many of these couples total income barely covers just the mortgage now, let alone their consumer credit payments, utilities and living expenses.
The property is worth 65% of what is owed and the fico is now around 400!
I know this sounds drastic but I personally know a BUNCH of couple in which this is a reality! We lived out there for 10 years.
HOW DO YOU see a solution for these cases.
BTW- A little about my REI career… Not knowing that I was even investing at the time.. LOL
I bought several properties in the NOW IMPLODED Central Valley, from 98-02 at around 55-70% of market value with a lot down and did rehab and or upgrades at COST being a contractor. I never refinanced any of the properties. By mid 05 the properties had in some cases tripled in value as compared to my cost.
By sheer fluke, we decided to liquidate and move back to the East Bay Area. Cash in hand, I was able to purchase our humble “cottage” in Pleasanton at around 65% of market value and the value has only dropped 5% since 05. BTW- one of the only deals of that nature I have seen here in Pleasanton since then. A very small mortgage payment, a TON of equity and as I see it the home was virtually free anyway. Caveat: Not being real up on 1031 exchange, I did EAT some serious “bread” by way of capital gains considering the whole scenario. Sitting on the rest of the “bread” that was not used in the purchase of the Pleasanton property. You live, you learn! Anyways in the end, were set pretty well and working on round 3 in our REI projects.
Tom Koziol
May 10th, 2008 at 2:27 pm
34James - Yep, your scenario - Sac-Stockton, Modesto, Tracy - sounds like one that happens in every boom/bust cycle. John Templeton seems to have hit the nail on the head. You my friend are to be congratulated for your superbly lucky timing. I say lucky in the good sense because you could have held on for a few bucks more and lost the whole enchilada. I know people here in Reno who wanted that extra 10 or so K and now are upside down.
A fix for the people you mention is simple and it is the one that has always been available for them. It is called an apartment.
They too had the same opportunity as you did but chose to go head over heels into debt. Their reason makes no difference as they are the only ones responsible for their decisions.
I would like to help everyone but not everyone is helpable. I can say that with confidence. When I was a stock broker I interviewed about 2000 people eyeball to eyeball. That’s all I’ll say in the way of proof.
My wife and I sold our home in Vacaville in ‘04 and made a buck or two. Some of our neighbors were laughing at us for selling low. They all knew for dead certain the market would never stop going up.
Today, they all say they wished they had followed our lead. Amazing how we advanced from fool to brain surgeon…
I could lament about some of the deals I missed but why, there will be more and that’s a God given given. All we can do is all we can do and take care of ourselves. If more of us would concentrate on only us, we’d have far fewer national messes to clean up.
You are a perfect example of what I just said. You took care of you and didn’t create any mess for anyone else to cure. That kind of action will always be wise.
Now, I want to annoint you as the messiah of “no more messes” so people won’t repeat their foolish behavior. I hope you accept I say tongue in cheek.
Your capital gains taxes were not only an important lesson but a clear cut indicator you made money. Making money is always a good thing. I bet if you repeat the process in Pleasanton, you’ll do it smarter and pocket even more money. If you want to invest some of your capital in Reno, let me know.
Good luck to you.
James Connery
May 10th, 2008 at 4:47 pm
35First things first here.. then to your last post. Sorry to bee so brief here, as much of a computer junkie as I am, I have family too. To be exact, a charming 5 year old daughter who seems to be going on 13 all of the sudden! NO KIDDING! Now thats almost up there with the Mortgage Crisis in my opinion! LOL AND, I am not 25, I am 45!! O.K. then…
“My guess is it is in the legislation Bush is circulating in Congress. It contains a bail out for all of the big boys.”
How can the government bail out investment banks that are not federally chartered! EXCEPT the HUGO CHAVEZ style indirect bail out that was plan A
in the Bear Fiasco! Wink-Wink…
James Connery
May 10th, 2008 at 5:06 pm
36Tom,
Short on time, so I will come back in more detail later.
WHOA! Hold your horses!
“I bet if you repeat the process in Pleasanton, you’ll do it smarter and pocket even more money”
NOT going to happen! EXAMPLE: Duplex-875k-rents 2800! NO THANKS!
However, now that I can get a fixer in Modesto at 65K “again” dump in 20k and rent for 800, maybe?
Better yet, my current projects, example:
Kansas City MO! Purchase 10K- dump in 15k- rent 650-!!! All CASH!
Cha ching!
One last thing.. The new “game” is self directed IRA!
O.K. sorry, back on topic…
James Connery
May 10th, 2008 at 5:08 pm
37“”Amazing how we advanced from fool to brain surgeon…”
LOL- I hear ya! Our friends said WE were FOOl’s as well!
Most of them are in foreclosure!! Or, NOW live in apartments just ad YOU said!
James Connery
May 10th, 2008 at 5:56 pm
38Tom-
Trying to e-mail you and your web site e-mail link is getting bounced back??
james@multicorpinc.com
Avoid Foreclosure
May 10th, 2008 at 7:10 pm
39This site may be useful to some of you guys and gals.
It has some practical information on how to avoid foreclosure.
http://www.howtoavoidforeclosure.org/
Good Luck
Tom Koziol
May 10th, 2008 at 8:10 pm
40Jmaes - The legislation I am talking about is the one that is putting all of the investment houses under the federal reserve. Since the banks are already in place, all that remains is the investment houses. That’s how it’ll go down. Everything will be truly federalized.
Avoid Foreclosure - yes, those items mentioned on the referenced site certainly are methods. Unfortunately they are the man’s way of keeping his boot on your neck. He gets everyone running with the same procedures and pretty soon he closes the gate and they are no longer wild, just captive.
In other words, the pablum is simply published and republished and really doesn’t work. Once people see it doesn’t work they look at the savior who happens to be the same wizard who created the problem.
His answer is federalization. And, scary, it seems to be working. After all, there oughta be a law…
Just my 2¢.
Tom Koziol
May 10th, 2008 at 8:24 pm
41Oh, here is another thought on what happens, or will happen to those vacant houses. We have an unprecedented number of illegals in this country. Eisenhower and Hoover each had a program that removed them because of threats to American jobs. This administration hinders their removal and doesn’t give a tinker’s damn about Americans having jobs.
These illegals have to live somewhere. Guess what just became available? Over 2 million homes. If the guvmint takes over the investment houses it takes over their bad loans (read foreclosed and empty properties). The new occupant gets to buy it at a bargain price and with a bargain interest rate.
I would bet if one toured the CA Central Valley and/or the San Diego Valley one would see this program already in place. I have no intention of driving about 6 hours one way to research my opinion so anyone still living there who reads this post please comment.
BTW, I make no apologies at the tender age of 63 for my feeling of Americans first. My ancestors came through Ellis Island and didn’t demand those living here at that time change their customs and laws. They didn’t demand they be given free medical, free schools and free housing. But that’s another story.
James - Self Directed IRA, brilliant as the Guiness boys say in their commercial.
James Connery
May 10th, 2008 at 8:51 pm
42“” The legislation I am talking about is the one that is putting all of the investment houses under the federal reserve. Since the banks are already in place, all that remains is the investment houses. That’s how it’ll go down. Everything will be truly federalized”"
Tom,
Can you point this legislation out? From what I have been told by my “economics guru Wall Street buddies” the GOV can not jump in, as MOST of these bad loans have been securitised and are owned by the investors. Like as in you and I. It would take, again Hugo type martial Law to “take over” the investment banks.
Tom Koziol
May 11th, 2008 at 6:51 am
43James - I first read about the proposal in the news pages of yahoo or msn. The proposal is to align the investment houses under the fed reserve system. As for the gov being able to take over the bad loans, that would be easy to do. They simply tell the investors to “redeem” their loans through the fed. What investor w/a bad loan would say no?
The investment banks already fall under the SEC so they have been “taken over” so to speak. The proposal I mention will either abolish the SEC or move it under the fed as well.
I will have to google Henry Paulsen as he supports this idea. He has made a speech or two about this plan so the proposal should be easy to find.
Here is a point many people don’t understand - if the government created it, they can abolish and/or alter it. All agencies fall under this rule. End of story. I live w/a real life example. My wife is a disabled veteran who uses the VA. I won’t go into specifics but take my word for it, the workings of this agency are a perfect example.
BTW, martial law exists and is codified in 12 USC 95(a) and (b). I believe a simple executive order is all that is needed to bring it to life. The patriot act is another example. Only it is martial law in parts.
James Connery
May 11th, 2008 at 11:22 am
44“The proposal I mention will either abolish the SEC or move it under the fed as well.”
Ah yes-The Department of Homeland Security” which is the “Martial Law” branch in effect! The comment you made about Communist Gov is more and more a reality every day!
For ALL of the Past, current and future Bills and ongoing updates, go to http://www.DSnews.com for a quick overview.
Tom Koziol
May 11th, 2008 at 11:55 am
45BTW, our Homeland Secuirty Dept was patterned after the Third Reich Homeland Security Dept. Prescott Bush was a trading partner of their commander in chief. That too is a whole nuther story.
Here are 2 sites with info about Henry Paulson’s speech in which he talks about the new face of regulation in the investment/bank arena:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/26/AR2008032601140.html?nav=rss_politics
http://berniehund.com/2008/03/31/henry-paulsen-shows-off-his-new-regulatory-plan/
As a secretary he is responsible for floating the trial balloons to see what will and what won’t be acceptable in the legislation that will make it through Congress. Pay attention to the reorganization of the investment sector. Also, don’t be afraid to read between the lines because that is exactly where the real scoop lies.
Just my 2¢. Oh, before I forget, practice saying Comrade in Spanish.
James Connery
May 11th, 2008 at 1:00 pm
46Amigo,
The Department of Homeland Security is a front organization for:
HIS ranch headquarters in Crawford Texas, where he, under Chaney’s command is executing the communist gov and martial law under funky pretense.
“I AM THE DECIDER”
James Connery
May 11th, 2008 at 1:01 pm
47BTW-
Bernie and Paulson are PUPPETS!
Trackbacks
RSS feed for comments on this post · TrackBack URI
Leave a reply
Real Estate Social Network
Visit www.BiggerPockets.com to be a part of the Premiere Real Estate Networking Community!
Real Estate Investing for Real | A BiggerPockets Blog
Want to Contribute?
If you are a mortgage lender, real estate agent, commercial real estate expert, or other professional, and want to be a part of the premiere blog for real estate investors, contact us!• Home Bargains! Sign up for your Free 7-day trial at RealtyTrac.
• Planning to Sell or Buy a Home? Compare REALTORS First. It's Fast and Free!
Categories
Latest Forum Posts
• Buying International land help . . .• Ugliest House in the world at 30B
• Why My Heirs Don't Deserve a Dime
• Small plane cargo
• Real Estate Investing company for tax advantages..?
• Need advice for property investment in Edmonton!!!
• Want to Verify I'm on the Right Track
• Share your Success Stories
• Hello from Surburban Chicago
• Informal Poll
• Hi everyone! New to the forum!
• Hello Ffom a potential REO buyer in Chicago
The Team
Editor:
Joshua Dorkin
Founder/President
BiggerPockets.com
Contributors:
Michael Creel
Realtor / Property Mgr.
creelestate.com
Real Estate Broker
Mike Farmer Realty
Freelance Journalist
theFeldmanBlog.com
Commercial RE Investor
Website
Foreclosure Consultant
Website
Real Estate Attorney
lawmr.com
Lender
Website
Landlord / Rehabber
rehabberseye.com
Real Estate Mentor
dfwmentor.com
Investor / RE Coach
miltonyates.com
Syndication
About Us
Overview Archives Advertising Privacy Policy
Top Blog Commentators
Sponsored Links
Links
Admin:
Recent Entries
Recent Comments
Most Commented
BiggerPockets® is a registered trademark of BiggerPockets, Inc.
By submitting any content to this site, it becomes property of the site and you give us your consent to reproduce such content in any way, publicly or privately, in any form of media, known or unknown, without any compensation to you. BiggerPockets® does not necessarily advocate or agree with the beliefs, expressions or opinions of our writers, commenters, or advertisers.
Real Estate Investing For Real | A BiggerPockets Investment Property Blog is proudly powered by WordPress