We view the auction as an "exit strategy."
I’d like to talk about the April 10, 2006 “Ask the AG” column, “Be Cautious of Mortgage Foreclosure “Rescues,”
As you can imagine, I have a few problems with it since it’s written during the time period I was under your office’s investigation and presumably, is about me.
Let’s look at just this one paragraph from the column . . .
“We’ve also seen instances of schemers preying on homeowners who have fallen behind on their property taxes. Washington laws only allow someone who has a legal interest in the property to pay property taxes. The fraudster offers to pay outstanding taxes so the homeowner can avoid foreclosure and convinces the homeowner to turn over the property title. But the con never pays the taxes. Consequently, the home is foreclosed on, sold at auction and tax debts are paid. The con then claims the leftover money from the sale is his – despite state law that indicates it should be paid to the person who owned the property at the time the court authorized the foreclosure.”— Robert M. McKenna
what I do
I do buy properties from people who are “behind on their property taxes,” so this is something I can really talk about.
Rob, I am neither a “schemer,” a “fraudster” nor a “con.” I’m simply an investor who buys property from people in tax foreclosure. But I don’t “offer to pay outstanding taxes so the homeowner can avoid foreclosure,” nor do I “convince the homeowner to turn over the property title.”
What I do is buy their properties, and yes, I sometimes let those properties continue on to tax foreclosure auction.
We view the auction as an “exit strategy” and like investors have done for years, we often choose to dispose of our properties at the sale.
Since the county prosecutor was kind enough to schedule an auction and advertise it for us, and since there will likely be 300 people showing up to buy (most with cashier’s checks in their pockets), selling our properties at the tax foreclosure auction is a sound business strategy.
There is nothing remotely improper with selling your properties at a tax sale. You even suggest doing so on your website.
we agree to a number that works
So, Rob, let’s for instance say you’ve got a property in an upcoming sale and I contact you to see what you plan to do with it. If you tell me, “I’m just letting it go back to the county; you want it, you can have it,” I’ll offer you a couple hundred bucks for your time and trouble and take it off your hands.
Is that a scam? Hardly.
You don’t want it, know it has little or no value, and know you aren’t about to pay another nickel in property taxes. I offer to buy it from you, we agree to a number that “works” for the both of us and we do the deal.
Again, a scam?
If so, I’d really like to hear why you believe that, because here’s a willing seller and a willing buyer freely contracting and participating in a sale they both want to see happen.
There is no scheme, no scam and no con. It’s a silly notion to put forth and the very fact you’re calling this sort of transaction a scam demonstrates how out-of-control this investigation has become.
This is a simple real estate transaction, the likes of which happen every day. Calling it a scam borders on ridiculous.
So, the question becomes, what part of the above transaction do you consider improper?
Certainly, it’s not the deal itself; that’s just the two of us transacting.
paying the back taxes is your argument?
But to do that deal and then not pay the taxes? That’s the only thing you’ve got to argue the “scam” notion, and that’s just as silly. Let’s look at it again.
You’ve decided to walk away from a property and we’ve hooked up, done our deal, and now I own it.
How does my paying or not paying the outstanding property taxes impact you?
It doesn’t. No, not in the least.
Or better yet, what purpose would I have in your claim that “The fraudster offers to pay outstanding taxes so the homeowner can avoid foreclosure . . . ”, as mentioned on your website?
Which, by the way, never happened, either.
Rob, paying or not paying delinquent property taxes has no impact on you as the seller.
You don’t own that property anymore, there are no credit issues with tax foreclosures, and there’s no possibility of a monetary judgment owed against you or me or anyone else if and when foreclosure finally takes place.
We don’t tell people we’ll save their credit when credit isn’t even an issue, nor do we tell people we can help them avoid foreclosure when, again, there are no foreclosure issues in a tax sale matter.
Nor do we tell them we’ll pay the property taxes when doing so has no impact on them in any manner. Once it’s our property, the decision to pay or not pay taxes will be based on what makes the most sense ($) and frankly, is none of the previous owner’s business.
What we do tell people is “would $200 help?” And when they say “sounds good to me,” we do that deal and they get paid.
my call, not yours
As the property owner, it’s 100% my call to do whatever I deem maximizes my profits. That can be paying the taxes and keeping or selling the property, or I can decide to let it go to sale and take my chances that overage will happen.
In any event, there is no scam taking place. And, lacking any evidence to the contrary, your office should be embarrassed for even suggesting it.
Publicly associating me with a real estate scam, Rob, is a big deal. Since doing so can only destroy my reputation and severely impact my livelihood as an investor, author, and information marketer, proceeding cautiously should have been your course of action.
But it was not.
Apparently, press releases and headlines are more important than the truth, and if in the process destroying me and my family is what it takes to score a few points, so be it?