How Banks and Servicers Play Hide the Ball

Friday, 01/21/2011 - 9:50 am by Thomas A. Cox | One Comment

Foreclosure industry lawyers use every trick in the bag to block the revelation
of important documents.**This is the second part of a three-part series. Read pa
rt 1 here.
Logic suggests that in foreclosure, the homeowner should be able to know who own
s his loan. In the rare circumstance where the homeowner wants to pay off the lo
an rather than lose his or her house, he needs to know who is entitled to receiv
e that payment so that the wrong party is not paid and so that he is protected a
gainst any other party ever claiming a right to payment. Where a homeowner canno
t actually pay off his loan, he still has a real interest in knowing who claims
ownership of it because only that party can respond to requests to work out a ra
tional loan modification.
Logic does not control the foreclosure industry s practices.
Variation Number 1: MERS hides the ball
In the first variation of this tactic, homeowners must face a massive concealmen
t scheme set up in 1995 by the foreclosure industry in the form of Mortgage Elec
tronic Registration Systems, Inc. ( MERS ). Before MERS came along, every mortgage w
as recorded in a registry of deeds for the county where a mortgaged home is loca
ted. When that mortgage was assigned, it was recorded in the registry. Thus, if
a homeowner ever had any doubt as to who owned his mortgage, he had only to chec
k his nearby registry to find that information. MERS unilaterally changed the ru
les of the game (with no permission sought from state legislatures). Under the n
ew regime, while an original mortgage is still filed in the local registry of de
eds, subsequent assignments of that mortgage are not recorded there. Instead, in
formation about them is simply entered into the MERS electronic recording system
. Any homeowner can check the records of his local registry of deeds, but no hom
eowner is permitted to access MERS. Thus, it took away a sure way to identify th
e owners of mortgage loans.
After an outcry against MERS over its concealment of the identity of mortgage ow
ners in its inaccessible system, it claims to have met those complaints by setti
ng up a web site where homeowners can look up this information. The problem is,
the website will not reveal the name of the owner of any mortgage unless the own
er voluntarily allows MERS to disclose that information. My experience with look
-ups on the website is that it repeatedly reports that the owner of the mortgage
has not voluntarily agreed to disclose its identity.
Even when a mortgage owner does allow its identity to be disclosed, there is a
high likelihood that the information will be inaccurate. I am working on a case
right now involving a Deutsche Bank trust created in 2006. Deutsche Bank claims
that it has owned my client s loan since 2006, but until July of 2009 the loan ori
ginator, not Deutsche Bank, was shown on the MERS system as the owner.
Use of the MERS website to look up mortgage ownership information is basically a
waste of time for homeowners and their lawyers. I am working on another case ri
ght now where there were major errors at the inception of the loan that give our
client the right to rescind it under the Truth in Lending Act. We know that the
lender is out of business and that some other entity owns the loan, but we do n
ot know who that is. The MERS website does not disclose the identity of the owne
r of this loan. Under TILA, the rescission letter must be sent to the owner, so
we have to file a request with the servicer for that information. Experience tel
ls us that the servicer may or may not respond and that if it does, the response
may or may not be accurate. In any event, a lot of lawyer time will be wasted i
n seeking out information as to the identity of the owner of the loan, informati
on that should be (and in pre-MERS days was) immediately available.
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Variation Number 2: Fannie and Freddie hide the ball
Fannie Mae and Freddie Mac are also major players in the concealment game. In th
eir agreements with the major loan servicers, they require that the servicers fo
reclose in their own names. In judicial foreclosure states, such as Maine, where
I work, we see this repeatedly even though Maine law permits only the real owne
rs of to be the foreclosing parties. To further this subterfuge, Fannie and Fred
die will actually endorse and deliver mortgage notes to the servicers to hold te
mporarily while the servicers foreclose under the guise of being the true owners
. The same problem arises here as with the MERS concealment game if we, as lawye
rs representing homeowners, do not know who the true owner is, we do not have th
e ability to properly represent our clients as we try to resolve that loan.
I have been unable to determine any legal benefit of this subterfuge to Fannie a
nd Freddie. Rather, I suspect that this game relates to political issues. Fannie
and Freddie do not want to let the country, our political leadership, and the r
egulatory agencies see just how tremendous their roles are in the current waive
of foreclosures. I suspect that they fear the public and political backlash that
might develop if the true scope of their roles in the foreclosure process were
revealed.
The problems created by the concealment game are real. I ran into this problem a
couple of months ago in a foreclosure action brought by GMAC Mortgage, LLC. Mai
ne law requires the foreclosing plaintiff to file a certification showing that i
t owns the loan and including proof of that ownership in the form of note endors
ements and mortgage assignments. In this case, there was a Certification of Mortg
agee signed by none other that GMAC s notorious limited signing officer Jeffrey Steph
an. He certified directly that GMAC Mortgage owned the loan in issue. I attended
a mediation session with my client on this case, devoting about five hours of l
egal time to the effort, while my client took a day off from his hourly pay job
to attend. It turned out that Fannie Mae owns this loan. Thus, my client and I w
ent into the mediation without knowing that only Fannie Mae HAMP loan modificati
on programs would be up for negotiation. Because of GMAC s participation in the co
ncealment game, my time and that of my client were wasted, as was the time of th
e court appointed mediator.
The practical effect of all of this obfuscation is that the foreclosure defense
process becomes unduly expensive for homeowners paying for representation, and t
he very limited resources of legal services and volunteer lawyers are wasted on
searches for basic loan ownership information that should never have been hidden
in the first place. By playing this game on such a massive scale, the foreclosu
re industry depletes the resources that the opposition might use in productive t
asks, such as pursing loan modifications.
Variation Number 3: obstructing homeowners discovery efforts
As foreclosure defense lawyers, we know hide the ball variations 1 and 2 well, s
o we try to compensate by pursing appropriate pre-trial discovery to dig out the
true identity of the owners of the loans. Without fail, every single request fo
r the production of documents that we file is met by massive and frivolous objec
tions by counsel representing foreclosure plaintiffs. Even a simple demand for p
roducing the original note and all endorsements is met by an objection that the
request is overly broad and unduly burdensome, even though the original note must be
produced at trial if the plaintiff is to prevail.
When we ask for information as to the existence of endorsements to the note, we
are met with an objection stating that the information is irrelevant. The servicer
s and their lawyers know that judges hate pre-trial discovery disputes and are n
ot likely to impose sanctions for their abusive conduct. Servicers seem willing
to take the few sanctions orders that we do obtain knowing that, it the vast maj
ority of cases, their obstructive tactics will go unpunished.
When we demand that the servicers produce the pooling and servicing agreements t
hat evidence their claimed right to act on behalf of the loan owners, they refus
e to do so, claiming that the agreements are confidential trade secrets. They ma
ke this claim even though copies of these agreements appear on the SEC Edgar web
site as public records. When confronted with this reality, they fall back on the
ir claims that the documents are irrelevant or that it is unduly burdensome to p
roduce them.
This kind of conduct should be sufficient for a court to simply dismiss the fore
closure outright, but our rules and case law do not allow for such dismissals un
til the violations become even more egregious. Foreclosure industry lawyers know
and take advantage of that fact.
Thomas Cox is a retired bank lawyer in Portland, Maine who serves as the Volunte
er Program Coordinator for the Maine Attorney s Saving Homes (MASH) program. He re
presents homeowners in foreclosure and assists and consults with other volunteer
lawyers in providing pro bono legal services to these Maine homeowners.
Homeowners Get Screwed, Lawyers Get Played, Banks Make Profit: Where s the Outrage
?
Thursday, 01/20/2011 - 10:04 am by Thomas A. Cox | 8 Comments
The foreclosure industry is playing the system while homeowners suffer. **Stay t
uned for the rest of this three-part series.
Two recent reports, read together, should spark outrage in the country at large
and among our political leadership. But no one seems to care anymore. JPMorgan C
hase, the country s third largest mortgage lender, confessed that it has overcharg
ed over 4,000 active duty troops on their mortgages and improperly foreclosed up
on 14 military families. Only three days before that, reports came out that JPMo
rgan had just experienced a 47% jump in profits for the previous quarter and 201
0 profits reached a record level of $17.4 billion.
The story of the violations of the Servicemembers Civil Relief Act was forced in
to the open by a Marine fighter pilot. He kept all of his payments current, but
due solely to the fault of JPMorgan Chase, his mortgage was placed into default
status. His wife reports collection calls (sometimes three a day) coming on Satu
rdays, Sundays, holidays and even at 3:00 in the morning. It took over two years
and the hiring of a lawyer to get JPMorgan to back off and finally admit that h
e had fully paid his mortgage obligations on time. Certainly no member of the mi
litary should have to endure this kind of treatment. But, beyond this, no Americ
an homeowner should have to endure those kinds of collection tactics from Americ
a s second largest bank. Where is the outrage over these kinds of heavy-handed and
abusive tactics?
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The Foreclosure Game
The situation described above fits within a pattern of abuse of American homeown
ers by JPMorgan Chase and the other major loan servicers that I have experienced
in my work as a lawyer representing homeowners in foreclosure. They treat the f
oreclosure process like a game, seeking to win at any cost without regard to the
harm inflicted upon homeowners. Strategic decisions are made, odds of specific
outcomes are calculated and bets based upon those odds are placed. Ways to skirt
the rules are studied and ignored when referees (judges) are not watching, weak
opponents are trampled, cheap shots are taken at opposing parties, and major ef
forts are made to wear out the opposition as the game winds on. Since the forecl
osure industry s pockets are deep, it is more than willing to outspend the opposit
ion to gain an upper hand when it will help win the game.
Lawyers who have the experience and knowledge required to represent homeowners i
n foreclosure cases are in very short supply. The work does not pay well, if at
all, it is very time consuming, and the level of knowledge necessary to do the w
ork well is very high. I have been focusing on this work on a full-time basis fo
r almost three years now. To be competent, I have to be familiar with the Truth
in Lending Act ( TILA ) and its related Regulation Z, the Homeowner Equity Protectio
n Act ( HOEPA ), the Real Estate Settlement Procedures Act ( RESPA ), the Maine Consumer
Credit Code, the Maine Unfair Trade Practices Act, the United States Bankruptcy
Code, the Maine Civil Action Foreclosure Statute, the Maine and Federal Rules o
f Civil Procedure, the constantly changing HAMP loan modification guidelines, an
d the separate and distinct guidelines of Fannie, Freddie, FHA, VA, and Rural De
velopment, each of which has its own variations on HAMP. In addition, I have to
keep current on developing foreclosure case law all over the country on a daily
basis. The number of us willing and able do this work is extremely limited when
measured against the needs of homeowners for legal assistance I hear that fewer
than 5% of homeowners looking for legal help are able to obtain it.
Perhaps the largest frustration for me in this work is to experience on a daily
basis the games that the servicers play in the foreclosure process. I am constan
tly frustrated by how much of my time is spent in dealing with the servicers anti
cs, thus reducing the number of homeowners that I and my colleagues are able to
help. What will follow is a two-part explanation of the game playing that we exp
erience in our dealings with the mortgage loan servicers and their lawyers.
Thomas Cox is a retired bank lawyer in Portland, Maine who serves as the Volunte
er Program Coordinator for the Maine Attorney s Saving Homes (MASH) program. He re
presents homeowners in foreclosure and assists and consults with other volunteer
lawyers in providing pro bono legal services to these Maine homeowners.
Homeowners and their lawyers waste resources while the banks and their lawyers b
ide their time. **This is the final part of a three-part series. Read part 1 her
e and part 2 here.
As we pursue pre-trial discovery efforts, the servicers lawyers hide the ball tact
ics come into full play. In addition to throwing up unjustifiable objections, th
ey stonewall for months on end in producing documents to which homeowners are un
deniably entitled. We recently won a $2,500 sanction award against JPMorgan Chas
e after the bank stalled for almost a year in producing documents that it was ob
ligated to produce within 30 days of our request.
While the lawyers for servicers are usually graded and paid for how fast they ca
n rush a foreclosure case through the legal system, the rules change in that ver
y small percentage of cases where lawyers show up to represent homeowners. At th
at point, the servicer is likely to remove the case from the grading system. The
servicer s lawyer is also likely to start billing the servicer at an hourly rate.
When a case finally gets to a trial list, there are repeated requests from the
servicer s lawyer for continuances and delays so that the servicer can put off sen
ding a witness to testify at trial.
Cut and Run
When we confront a servicer with clear proof that it cannot prove its right to a
foreclosure, it will seldom pull back and take action to correct the problem. I
n one recent case where HSBC Bank was the foreclosing plaintiff, we developed cl
ear proof that the note endorsement it was relying upon was signed by a person w
ho had utterly no authority to endorse on behalf of the party from whom HSBC cla
imed to have acquired the note. Thus there was no proof that HSBC had any right
to foreclose. Nevertheless, it convinced an unknowledgeable trial judge to give
it summary judgment. We appealed the case to the Maine Supreme Court and fully b
riefed it. While I was working as a volunteer lawyer on that case, the value of
the work that I put into that appeal would have been well in excess of $20,000.
On the day that its opposing brief was due, HSBC filed consent to the granting o
f the appeal, finally conceding at that late stage that it could not prove its e
ntitlement to a foreclosure. It did not much care that it had forced that kind o
f legal effort on behalf of the homeowner because it does not have to pay the ho
meowner s fees when it mismanages its cases.
Just a few weeks ago, we saw a similar development from the same servicer law fi
rm, this time representing a Deutsche Bank securitized trust on a loan serviced
by JPMorgan Chase. The trial court granted summary judgment to Deutsche Bank, ev
en though it was clear that JPMorgan had failed to send the homeowner a proper n
otice of default and right to cure. Again, we appealed the case to the Maine Sup
reme Court, and again the foreclosure plaintiff capitulated only after its lawye
rs realized that we were not giving up and that it was about to lose.
In the now notorious FNMA v. Bradbury case, in which I exposed the dishonest aff
idavit practices of GMAC Mortgage s Jeffrey Stephan when I deposed him this past J
une, GMAC recently moved to dismiss the case after two failed motions for summar
y judgment, a failed motion to prevent any sharing of Stephan s deposition with ot
her lawyers, and an imposition of sanctions upon it for its bad faith conduct. I
n moving to dismiss, GMAC admitted that it could not prevail in the action. This
admission came after we invested legal work that, if a private lawyer had been
billing, would have cost well in excess of $40,000.
In the hide the ball variation 2? case described in my previous post, where GMAC
filed a dishonest mortgagee certification signed by Jeffrey Stephan, it moved to
dismiss that case only after we named that client as a plaintiff in the class a
ction that we have brought against it.
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The pattern that emerges from these and similar cases shows the practice of fore
closure industry lawyers to litigate right to the point where they are about to
lose and to then cut and run. In this process, they are usually getting themselv
es off the flat fee charged in unopposed cases and onto an hourly fee arrangemen
t that they like, and they are content to see homeowner s lawyers time diverted fro
m representing other homeowners.
Wear Down the Opposition
Working with homeowners to obtain modifications can be some of the most rewardin
g, and yet most frustrating, work that we do as foreclosure defense lawyers. Unt
il Maine s new foreclosure mediation program began on January 1, 2010, we were alm
ost never able to obtain loan modifications for our clients. We couldn t even get
employees of servicers to talk to us. With the program now fully operational, we
are able to negotiate loan modifications in many cases. It is very satisfying t
o see a homeowner walk away with a loan payment that he or she can afford, exper
iencing the relief from a terminated foreclosure action.
The flip side of this picture is the outrageous abuses of the loan modification
process that we constantly see. The servicer leagues ahead of all others in this
misconduct is Bank of America. We often have Bank of America customers come to
us before foreclosures begin. These homeowners are desperate. They have suffered
diminished or lost incomes for one reason or another and have been attempting t
o work out loan modifications before their reserves are totally gone and they ar
e forced to default. Bank of America often ignores these homeowners or puts them
through endless cycles of financial disclosures (repeated time after time becau
se it routinely loses these papers), or it simply tells homeowners that they mus
t default before it will even talk to them.
It gets worse. Even in the rare cases where a homeowner has obtained entry into
the HAMP modification process from Bank of America, which is supposed to involv
e a three-month trial payment period, it strings them along in the temporary pay
ment for nine or 12 months or longer, only to finally, and without any justifica
tion, deny a permanent modification. By the time these homeowners get to us, the
y are angry, discouraged, depressed and exhausted. They are often ready to just
give up and to walk away from their homes to bring an end to the tortuous proces
s. I suspect that this is exactly the result that Bank of America wants.
Even when we come into these cases as lawyers, the same exhausting process conti
nues. Agreements that we reach in mediation are not kept. Our efforts to obtain
conversions of temporary payment plans to permanent modifications become an effo
rt of guerilla legal warfare. Over the past few months, there have been abundant
reports of the perverse incentives that motivate loan servicers to pursue forec
losures and avoid loan modifications. In the line of foreclosure defense on a da
ily basis, we see directly the suffering inflicted on homeowners who hope for no
thing more than a fair chance to stay in their homes.
Where is the outrage?
Certainly the military families who have been abused by JPMorgan Chase must be o
utraged. Homeowners all over the country experiencing these abusive tactics are
outraged. Overworked and tireless foreclosure defense lawyers are outraged by th
e abuses that we see on a daily basis. Very few judges, like Judge Arthur Shack
in New York, have become outraged. But I do not see the outrage at out largest (
and taxpayer bailed-out) financial institutions coming to a boiling point. When
I testified in front of the House Judiciary Committee in December, I did not com
e away with any sense of outrage there. When I saw the report about the abuse of
American military families, I thought that would become a tipping point, but I
has not even made headlines in the nation s print and television media. What is it
going to take?
Thomas Cox is a retired bank lawyer in Portland, Maine who serves as the Volunte
er Program Coordinator for the Maine Attorney s Saving Homes (MASH) program. He re
presents homeowners in foreclosure and assists and consults with other volunteer
lawyers in providing pro bono legal services to these Maine homeowners.
deceptive and short-term strategy. Use it at your own risk. €I am
on the war path and very alarmed about many real estate information
marketing gurus who are promoting this strategy. € These €so called
real estate gurus are glossing over the real risks to the buyer,
seller, and broker inherent in this strategy, I am appalled!!!
Before you attempt to do one of these so-called mortgage assignment
deals, €Before you use this strategy, you better look long and hard at
the below:
What is a € Typical Mortgage Assignment,
Suppose Sam Seller borrowed a hundred thousand dollars from Bank of
America five years ago to buy a house, and today he needs to sell.
But he s having a hard time in this market because he has a real
problem the house is worth less than the $100,000 he borrowed. How
much less? It s only worth $90,000 today, making it upside down by
$10,000.
But wait! Ivan Investor comes along and makes Sam an offer he can t
refuse. Ivan says he ll buy the house for the full $100,000 Sam owes,
and as you probably guessed, Sam is thrilled. The only catch? Sam must
agree to sell subject to his existing mortgage. (More on that
below )
(and those associated with NARS and the EHTrust know this is no problem)
Overpaying For Mortgage Assignments?
Who d pay $100,000 for a $90,000 house? Good question, why would they?
The fact is they wouldn't, at least not "Today". Ivan Investor would,
and you ll see why in a moment. €Smart sellers know it s a bad idea to
sell your house subject to the mortgage. And that s why sub to
sellers are nearly always sellers in some form of distress. At the
very least, they re desperate to sell.
Sam Seller knows sub to deals are high risk and should be avoided,
(true, unless you are using the NARS EHTrust Transfer) but he also
knows he needs to get the house sold and get out from under those
payments so it s a risk he s willing to take. € So, he contracts with
Ivan Investor to sell the house for the full mortgage balance and
knows that from here on out, whomever Ivan sells the property to gets
to make the payments.
Ivan, it turns out, never actually buys Sam s house and has no
intention of buying it. Instead, he markets it on Craigslist by
advertising No Qualifying Take Over Payments where Barry Buyer
sees it and makes a call. Barry can t get a loan because he s got
terrible credit. But what he does have is $10,000 in cash and that s
all it takes to qualify in Ivan Investor s eyes. They quickly put
together a deal that has Ivan agreeing to sell the house for $110,000
(therein lies Barry's first and biggest mistake) with Barry agreeing
to buy it at that price, paying $10,000 down and taking over payments
on the $100,000 loan. That price is $10,000 more than what s owed to
Bank of America and $20,000 more than the house is worth, but it s the
only way Barry can get into a house with his poor credit.
So, no credit Barry Buyer purchases desperation Sam Seller s
over-encumbered €home and pays Ivan Investor a cool $10,000 down
(this is Ivan's and Barry's second mistake) for the privilege.
Everyone involved is happy with their win-win-win deal!
 Sam Seller is finally free of that upside down house.
Barry Buyer is the proud new owner (third mistake) of his very own home.
And best of all, Ivan Investor just banked $10k!
What could possibly go wrong now? Let me tell you what
Mortgage assignments have nothing to do with assigning mortgages The
term mortgage assignment refers to a document commonly used in the
mortgage industry to transfer a note and mortgage from one mortgage
company to another (or from one borrower to another with an assumable
mortgage, but that s only done on rare occasions today).

An Assignment of Mortgage is the legal document used for the

transfer, and it s signed, notarized and recorded with the county
whenever a mortgage assignment takes place.

There are two ways to transfer title to property, one by "deed" and
one by "trust".

No one can assign a mortgage, or sell it, or even hypothecate it

(offer it as security) or any of the things typically done with
mortgages without having physical possession of the instrument itself.

BULL$hit, what do you think the damn Banksters have been doing for at
last the last decade.
So, Ivan Investor can t really assign the mortgage to anyone. Not
unless he's a Bankster And since he doesn t even own it, how could he
possibly assign it? The simple answer is he can t. €It s a Misnomer.
But the really strange thing about this whole Mortgage Assignment
strategy is that it has nothing whatsoever to do with assigning
mortgages. Using the misnomer mortgage assignment to describe this
strategy indicates a lack of understanding by the program s creators
concerning the most basic Real Estate 101 concepts.
They know exactly what it is and what it isn't. €The term sounds good
so they choose to use it.

In reality, Sam Seller remains on the hook for the loan because
nothing Ivan Investor does changes the fact that there is a signed
note in the lender s vault with Sam s signature on it.

There is not a signed note in the lenders fault and I challenge you to
find it. The lender themselves can't even find it. Why? €Because it's
already been copied, digitized and shredded right before it was
fractionalized and sold to five other very stupid investors for the
full amount of the loan. But, that's besides the point and has nothing
to do with this subject.
Unless his loan is paid off or formally assumed by a new, qualified
borrower, Sam will remain liable for the life of that loan because in
this mortgage, the mortgage was never actually touched, much less
assigned. True
ARE MORTGAGE ASSIGNMENTS €LEGAL?
The gurus like to point to that misunderstood subject to section on
the standard form settlement statement and say, if it s illegal, why
is there a spot for it on the HUD-1?
The HUD-1 settlement statement is an accounting statement showing the
debits and credits in the transaction and nothing more. €A €place on
the statement to list existing loans is there merely for the sake of
convenience and in no way sanctions sub to deals.
Some loans, particularly existing owner-financed loans, may not have a
due-on- sale clause and having a place to list them on the settlement
statement is appropriate.
There s nothing illegal about buying or selling a house subject to
in most states (though not all), so why wouldn t you have a spot to
list them? In reality, violation of the due-on-sale clause is a
default of a non-monetary covenant, whether there s a spot on the
HUD-1 settlement statement to list it, or not.
WHO S TO BLAME WHEN THE DEAL GOES BAD ( WHICH 80% OF THEM DO)?
TRUE, UNLESS IT'S A NARS EHTRUST TRANSFER WHERE THE EXACT OPPOSITE IS TRUE.
When foreclosure does happen, you can be sure there will be lots of
people looking for €someone to blame.
Who?
People like Sam Seller. You remember Sam. He only did this Mortgage
Assignment deal because he was desperate, and Ivan Investor convinced
him everything would turn out okay. Except it didn t, and now Sam s
credit shows a foreclosure and is ruined for years to come. €Worse,
the lender didn t just take back the house, he also received a
judgment against Sam Seller for everything they lost and can now
garnish his wages, levy his bank accounts and seize whatever else Sam
happens to own.
And you can be sure Barry Buyer isn t happy either. He put up $10,000,
made all the payments as agreed, and the lender took the home from him
anyway. Do you suppose he wants his €$10,000 back, not to mention
every last nickel he s put into the property since? € Yes, he does,
and so today he s out filing complaints with the Attorney General and
the Better Business Bureau and every other agency he can think of,
asking them to help get his house or money back.
Doesn't this remind you of the Guy who walked in to the Doctor's
office and said, "Doc, it hurts when I do that". €And the Doctor
replies, "then don't do that".
Yet another reason to use the NARS EHTrust Transfer.
Once those agencies take on Barry Buyer s case and get copies of files
and see the problems these Mortgage Assignment deals created for
buyers and sellers and lenders and everyone else, who do you think
they re going to blame? Sam Seller? Nope, he was desperate,
unsophisticated, and convinced it would all turn out okay. He did
whatever he was told, signed whatever papers put in front of him, and
he thought that was the end of it. €Besides, he didn t get a nickel
from the sale. He can be called dumb, but that s about it. He s not to
be blamed.
Then how about Barry Buyer? Nope, he thought he was doing a deal that
made sense, considering his credit situation, and he was willing to
pay a premium price to get into a home of his own without having to
qualify. That s all he knew about buying a house. Besides, he paid
$10,000 in cash to make it happen. He s not to blame for this mess,
either.
No Defense
In a three-party deal transaction that goes horribly bad, where two of
the parties are unsophisticated and lose everything, the odds are
pretty good that third party is the one who screwed it up or got all
the money or both.
And if that third party happens to be an investor who had no interest
in the property he sold, who acted as an unlicensed agent in the
process, and who walked away with all of the money on the table, odds
are pretty good he gets fingered as the one to blame.
That is of course, unless Mr. Seller, Ivan and Barry were all
co-beneficiaries of a NARS EHTrust.
His defense?
But I did these Mortgage Assignment deals just like they told me to do them!
Yep, Ivan bought the Mortgage Assignment BS, hook line and sinker. €He
should have come to a NARS Workshop and learned how to do the same
transaction legally and with little if any risk to all the parties.
Let s just hope our friend Ivan Investor hasn t been really good at
them because if he s done a bunch, he ll have a lot of explaining to
do the kind of explaining that happens under (1) oath, (2) the
penalty of perjury, and (3) a very bright light.
Wrapping Up
The Mortgage Assignment strategy has a fundamental problem that cannot
be easily fixed there s an investor in the middle of things where no
investor should be. He s an opportunist, providing little real value
and extracting whatever profit he can from the unsophisticated sellers
and buyers involved. Providing little or no value is the real problem.
To make $10k in any transaction, be it real estate or anything else,
you first need to deliver at least €$10k in value. You won t find that
value anywhere in this type of deal.
What you will find is the tired old sub to strategy that brings
together all the usual suspects found in the kinds of real deals
experienced investors won t touch.
Doing Deals That Bite Back
We recognize that deals involving desperate sellers, bad credit
buyers, and upside down properties almost always end badly. €Add to it
an investor with a total disregard for the outcome of the people he s
supposedly helping and you have disaster waiting to happen. €Right,
wrong or somewhere in the middle, these deals are indefensible. Worse,
when one goes bad they all tend to go bad. The Mortgage Assignments
strategy is risky for sellers and buyers, but most of all it s risky
for investors. I would never do one of these deals no matter how much
money I thought I could make.
Better Things to Do
And do you know why? I wouldn t do one because I know that any money I
make won t be mine to keep, at least not in the long run. These are
deals that bite back nearly every time. Maybe it doesn t happen
tomorrow, or next month, or maybe not even next year, but bite back it
will. €And I know whatever money I make today on one of these deals
will get snapped up down the road when it comes time to pay an
attorney to defend it, or worse defend me. €And, I m pretty sure I ll
have much better things to do.
DO YOU WANT THE REAL SHOCKING TRUTH ???
An €audio of €JACK STERNBERG interviewing a retired HUD Investigator
and current Mortgage Compliance Training Officer and an attorney (Jeff
Watson). € €READ €the report below and GET €the audio interview..
The only problem is, the interview has been removed. €Hmmm, wonder why?
My advice , €Do NOT do Mortgage Assignments! Lease Options are a
better way to go!
BULL$HIT, the only difference between a Lease Option and a Mortgage
Assignment is what you're calling it. €And, if anything, a Lease
Option is even MORE Dangerous. *See "My Personal Lease Option Horror
Story".
They may not be sexy and lease option courses are not expensive to
buy. €Until you get sued like I did. Yes, there are going to be some
real estate information marketing gurus mad at me once again for
exposing their crap.. BUT I DO NOT CARE! €I am telling you the truth,
and I am looking out for you. €I don t need your money. I will do the
right thing and rather have a good name then put you at risk for
losing big time with this strategy.
And I thank you for telling€