All Forum Posts by: Alex Hall

.

I am SURE I misunderstood you and you didn't admit to "fixing his credit." No, I'm sure you didn't, especially on a website monitored by the FBI, FTC and others. I'm SURE you mis-spoke and meant to say, he's a close friend that I am trying to help but it was not my intention to "fix his credit".

Debt Relief and Credit Repair Scams

"The FTC has brought scores of law enforcement actions against these bogus credit-related services, and the agency has partnered with the states to bring hundreds of additional lawsuits"

SOME CASES
https://www.ftc.gov/news-events/topics/consumer-finance/debt...

• Financial Education Services (August 5, 2024 )
• Panda Benefit Services, LLC., FTC v. (June 28, 2024 )
• Apex Processing Center (April 16, 2024 )
• Elegant Solutions, Inc. (Mission Hills Federal) (March 13, 2024 )
• Home Matters USA (February 16, 2024 )
• Lanier Law, LLC (January 17, 2024 )
• SL Finance (October 6, 2023 )
• American Financial Benefits Center, et al. (August 22, 2023 )
• ACRO Services (August 10, 2023 )
• Viceroy Media Solutions (July 18, 2023 )
• Arete Financial Group (June 14, 2023 )
• GDP Network LLC (YF Solution) (May 22, 2023 )
• BCO Consulting (May 8, 2023 )
• Stratics Networks (February 17, 2023 )
• Michael and Valerie Rando, et al., FTC v. (January 10, 2023 )
• Student Advocates Team, LLC, et al. (August 18, 2022 )
• GAFS Group, LLC, et al. (August 4, 2022 )
• ITMedia Solutions LLC (January 6, 2022 )
• Moneta Management Inc. (July 12, 2021 )
• SLAC, Inc. (June 25, 2021 )

 You didn't save him him, you just kicked the can down the road. Now it grew into a larger problem.

Much like others I am hearing about, hope you don't get the loan called due. It does happen, and it's happened a lot in this calendar year. 

The solution would have been to sell this once you got it, and net the difference. Not keep it. You don't have any strength to keep it. Have you passed the tax assessment yet, or is this your first year of owning it?

 When his followers came on here about a year ago and spammed these forums with cult-like nonsense posts, I tried to watch a few videos of his and realized right away that a lot of what he was saying is very questionable. Whenever someone contradicts themselves in the first 30 seconds of a video, it makes me question everything they say after that. 

This is the 2nd thread recently where people espousing his teachings have had issues using sub2 (see the recent one here from someone who was warned about the high risk of the strategies he teaches about a year ago but said he should be trusted "because he had a TV show on A&E": https://www.biggerpockets.com/forums/50/topics/1225630-due-o... can't make this stuff up). I expect there will be many more issues with these transactions moving forward. 

Sub2 is a risky strategy for a long term buy and hold as the longer the deal structure stays in place, the higher the chance that issues will arise (like issues with the loan servicer, insurance, seller filing for bankruptcy, seller dying, seller realizing their DTI ratio and ability to buy their next property is negatively effected and becoming upset about it like in your case, due on sale clause being called, etc.). Much better as a short term acquisition strategy for flips IMO but always a high-risk strategy that should not be practiced by anyone who doesn't have the liquid capital to pay off the loan if needed. Just my opinion.

 When his followers came on here about a year ago and spammed these forums with cult-like nonsense posts, I tried to watch a few videos of his and realized right away that a lot of what he was saying is very questionable. Whenever someone contradicts themselves in the first 30 seconds of a video, it makes me question everything they say after that. 

This is the 2nd thread recently where people espousing his teachings have had issues using sub2 (see the recent one here from someone who was warned about the high risk of the strategies he teaches about a year ago but said he should be trusted "because he had a TV show on A&E": https://www.biggerpockets.com/forums/50/topics/1225630-due-o... can't make this stuff up). I expect there will be many more issues with these transactions moving forward. 

Sub2 is a risky strategy for a long term buy and hold as the longer the deal structure stays in place, the higher the chance that issues will arise (like issues with the loan servicer, insurance, seller filing for bankruptcy, seller dying, seller realizing their DTI ratio and ability to buy their next property is negatively effected and becoming upset about it like in your case, due on sale clause being called, etc.). Much better as a short term acquisition strategy for flips IMO but always a high-risk strategy that should not be practiced by anyone who doesn't have the liquid capital to pay off the loan if needed. Just my opinion.

 Perhaps valid concerns. I don't see how they relate to wanting to educate myself or asking for reading recommendations. 

Hey champ (with 5 total posts, all in this forum). You didn't save him from foreclosure, you delayed another problem by using SubTo in this instance.

.
Now understand, I am not picking on you, I am simply explaining the process you are going  into. Subto is legal, when done legally and I am not saying you've done anything illegal.

Well, let's put two and two together
1. He was in foreclosure with a federally backed FHA loan
2. His name, date and social security number are associated with the loan 
3. The FHA has him in the "naughty" room, yeah I know, you stopped his foreclosure, but that does not erase the information at the FHA
4. The loan has not been paid off
5. Now, he wants to buy another house 
6. He has no money
7. He has no credit

His solutions:
1. Lie on his application for the new loan and do jail time
2. Not lie and be denied on DTI & credit issues
3. Depending on how determined he is, he notifies his "not paid off lender" to remove him from the loan.
4. The lender is surprised he is no longer on the loan. They run a credit check to see what is going on and see the credit checks pulled by other lenders.
5. They ask him about it, he lies to protect you, so that they don't call the Due On Sale (not on your life baby, won't happen) and he faces jail time for lying about a federally backed loan
6. Or, He tells the truth and explains that he sold you the property, and "please remove the loan from his credit report". (not on your life baby, they will not do that either)
7. They contact you, you lie and face jail time (now, you're not going to do that)
8. Or, You tell the truth and they notify you that you have 30 days to pay off the loan in full.
9. You fail to pay off the loan in 30 days and they start a foreclosure proceeding which destroys the previous owner's credit
10. This is not what the seller agreed to, so he sues you for various things.

11. In the alternative, everything seemingly goes well, he has lied on his application (very dumb move) which you don't control and down the road a year or two you get a "knock, knock" on the door from some very stern men who want to talk to you about the transaction. They can visit you up to 10 years after the transaction completes.

Buying houses for "Free" can be very expensive.

Incidentally, it isn't holding two FHA loans simultaneously that is the problem. That can be legally done under the correct situations.

You made some serious mistakes in the purchase, that proper training would have prevented.
Again, Subto is legal, when done legally and I am not saying you've done anything illegal.

The real solution is to sell and pay off the loan. Or, if you are able, you can refinance and pay off the loan.

Seems like his option will be to buy it with a conventional loan with 5% down. And offset the previous FHA loan payment showing that you're making the payments for it so it lowers his DTI. Usually having a servicing company helps the lender to consider that.