All Forum Posts by: Ron S.

Their own note states, "If it isn't in writing, it doesn't exist" (I'm paraphrasing). So, at the end of the day, keep your payments current, give them financials on the back of a bar napkin if they ask and enjoy your life. I shake my head at how they would contradict their own note unless you signed the mortgage or amendment agreeing to this. Still nothing seems that ominous.

From the looks of it, and from what you say, these guys don't seem very sophisticated. I suspect they are flying under the radar of their regulatory agency for now but with the shenanigans you describe, i bet it won't be for long. Not sure who this guy is but looks like some yahoo document someone made up from some divorce attorney. No way LaserPro docs would look that rookie or contain that kind of language.

You are still going to be subject to the 120 day rule unless there is an existing foreclosure action on the subject. That's the only time i can recall where you can start your foreclosure earlier.

If there were financial covenants in the original docs, they are simply reminding you that they aren't waiving them and might enforce them if not now, some day. If they were there from the beginning, and they are reminding you, yeah, they can do this because of "yadda yadda" the fine print. If they aren't in the docs, meaning, there is nothing in your commercial guaranty or promissory note that you signed about providing financials, any unilateral covenants would be voidable and unenforceable. That's not saying they won't default you but they would probably not prevail in the face of litigation. I would be suspicious if you did not have financial covenants. it's so common.

Default interest rates are very common in commercial loans. however, recent huge litigation (Honchariw decision...google it), makes applying any default rate very very difficult and litigious now. We (Banks) have to send like five "pretty please pay your loan or give us financials" letters, escalating in tone and threat before we actually apply any default rate (My covenants at my bank range from adding 4 points to the margin, to a straight 18% bump). 

It would be as difficult and as litigious for the lender to execute a related debt default application of rate (one debt default applies to all debts) on your loan. I suppose they could be geez they would be opening themselves up to a huge lawsuit that most lenders (big and small) don't have the appetite for because this is a small and immaterial violation. Do they really want to go to battle over that immaterial event?

Regarding the "6%..." i think you must be misinterpreting. Ok, yeah, if they apply 3% to each loan, i guess you could say on two loans, with 3% added, its a total of 6% but, that's not how it works. I can't believe they would add 6%". Maybe i'm misunderstanding it.

I'm not giving legal or financial advice but if i was, 

a. - I would not ignore their letter. I'd reply telling them "no, you can't do this, eff off". or something to that effect. It would be better coming from your attorney.

b. - Make sure you don't have a prepayment penalty if you pay them off! also, 8.675% in this market is a good rate. You won't get a commercial loan for SFR's at that rate today.

c. - Read the note yourself. Its not rocket science. If you still aren't clear or don't want to read the fine print, have an attorney confirm the terms. Cheap money for confirmation if you ask me. 

d. - Contact them for what? They aren't going to look into anything until/unless you point out what the lender is doing wrong. They aren't gonna do your homework. Yes, its the government and they are lazy and inept until you put them on the path.

I had a situation this last yaer where I had a simultaneously recorded first and second (in practicality). Fortunately they were both my bank's liens but they were a potential nightmare to fix. 

We did a rate and term refinance (no one would do a rate and term in their right mind today but our loan was a matured balloon) on a Fannie Mae loan and did a HELOC behind it. Or so we thought. The title company that did the closing, had a bunch of recordings that day and unwittingly had the county record the HELOC first, and seconds later time/date stamped the senior. All good, no problems until the loan went into default.

We put the HELOC into foreclosure to avoid it getting wiped out in the sale (The senior would have survived the sale). When we got the trustee sale guarantee back from the foreclosure trustee, it showed the HELOC in first lien position because of the page number and recording time.

Ultimately the borrower sold the property before sale so it was a non issue but had they not, and had we continued with default, if we did not restructure the foreclosure (difficult), we would have more than likely had to wait until sale, suffered a loss, then filed a title claim (Time...time...time...) to hopefully be made whole. 

People like you can put other people in harm's way. Your lack of concern for what your lack of knowledge can do to them, hiding behind the false narrative that you are helping them with your "investment strategy" is going to land you in hot water some day.

You don't need to justify your actions to me but let's just hope you don't get put in front of a judge to justify them to the courts. I can tell you that ignorance won't be a good defense. Do yourself a favor and read up on your state's foreclosure consulting laws. That was the only point I was trying to make before you got all hurt and defensive. If you don't want opinions, you probably shouldn't be asking for them? If you don't want opinions that conflict with your level of understanding, maybe think about getting into a different line of work where you won't be so triggered and upset? Maybe try knitting or gardening? It's therapeutic. 

 I hope that's not your defense...

so I understand...you are going to find leads and have people cold call and solicit them for what...to sell you their home? or...are you planning on "helping them" (adding/transferring title into your name)? Or doing a "subject to"?

Not sure what your goal is but before you start messing with homeowners in default (regardless of what stage), you might want to read up on the foreclosure laws in the state you are trying to do business in. In some states, you must be licensed. In other states, attempting to "help" homeowners in foreclosure (or in imminent danger of default) can put you into the crosshairs of an attorney general or worse, a DA.

I've enjoyed being part of personally exposing scammers that prey on people to strip them of the equity in their homes. Here's a excerpt from one group of scammers brought to justice. I'm sure you only intend on helping people so, this shouldn't apply to you.

Home Matters USA | The Department of Financial Protection and Innovation (ca.gov)

 thanks for clarifying...if they were the players you had to contend with, i can see why the need for suit. They were the trifecta (are?) of bad servicers. I'd add SPS in their too.

 I've never heard of a warranty deed issued at foreclosure sale. Must be something new. In the 30 years I've been doing foreclosure sales, I've only seen a trustee's deed upon sale issued. Would be strange to issue a warranty deed, which covers the period you owned the property (I get "You" means attorney/trustee), when you've never owned the property. Seems like all the more reason a trustee's deed would be issued. Then again, maybe I'm just getting old and not up to the new stuff.

Be careful contacting delinquent borrowers in states where your actions could be construed as foreclosure consulting, which may require a license and may subject you to civil/criminal penalties if you run afoul of the law. California is one example where you have to be a registered foreclosure consultant (there are a couple of exceptions) to have conversations about "preforeclosures". 

Google "Home Matters USA" if there are any questions about the penalties. 

FTC, California DFPI Case Leads to Ban Against Operators of Mortgage Relief Scam Home Matters USA | Federal Trade Commission

Offering to buy their homes and "Save their credit" or "Save them from foreclosure" could innocently put you in the state or federal regulator's crosshairs. Equity stripping is real and i've seen the states go after people.