Absurdity, Again

Posted May 8th, 2008 by Joe Kaiser

If you choose to consider that bit of thuggery as having "nailed" us, congratulations, because you did just that.

Dear Rob,

Well, I was wrong.

Yesterday’s post mentioned the audio on your website describing how 82% of the seller’s equity in a rescue deal belongs to the seller.

I suggested what you’d intended wasn’t 82% of the equity, but 82% of the property’s market value.

My bad, and once again the lunacy of this thing rises to the surface and is in plain view for all to see.


Press Conference

It’s clear you wanted the 82% provision in the new law to be calculated against the seller’s equity. I described that as “absurd,” thinking there’s no way your office could get things that out of whack.

Well, you did, and here’s the video where you talk about it . . .

Get the Flash Player to see this content.

So, in other words, if you have a mortgage for a hundred thousand dollars, but you’re in foreclosure and you sign an agreement with a rescuer, so called, and they let the property go to sale anyway, and they sell it for two-hundred thousand, you would get at least eighty-two thousand of the hundred thousand in equity. — Rob McKenna
WA State Attorney General

Again, Rob, this is completely nuts.


Whacky

Sellers listing their $200k properties and getting full price offers do not net $182k from the sale. Closing costs alone are roughly 10%, meaning a net of approximately $180k, at best.

And on that same $200k house, with the owner owing $150k, investors according to your logic would be required to pay $191k?

Are investors now required to pay a premium whenever dealing with folks in foreclosure?


An embarrassment

It’s embarrassing to see you and your office promoting this fuzzy reality of yours. It shows you have no concept of even the most basic real estate fundamentals and exposes you as nothing less than inept.

Who comes up with this stuff?

If it was your “think tank,” you need to rethink that think tank.


No sense

There are more than a few other things wrong with your press conference.

Much of it makes no sense. You’ve got concepts jumbled up and so confused it’s clear you have no idea, more often than not, what you’re talking about.

But rather than get into all of that, I’d rather focus on just this one particular bit of nonsense . . .

Already, in 2007, we’ve gone after three companies and associated individuals in King County and Pierce County who were running these kinds of mortgage foreclosure scams. We were able to nail them under our state’s consumer protection act statute . . . — Rob McKenna
WA State Attorney General

Not true, as you well know.


Facts distorted

You didn’t really go after three companies. These were all my companies or my partners’, so in actuality it was just us. You make it sound like a bunch when it fact there was only the one investigation and one lawsuit.

And, you said we’re running “mortgage foreclosure scams.” The “scams” thing is bad enough, but how do you not know by now that we’re not even in the mortgage foreclosure business?

We dealt exclusively with tax foreclosures. Again, you’ve tried to stuff us into the tiny foreclosure rescue scam box your office understands, and we don’t fit.

We never will.


Nailed

And, you claim you’ve nailed us. That’s outrageous.

Under the threat of total financial ruin you sufficiently terrorized my partner into settling. Having done nothing wrong and admitting no wrong-doing, he paid your office nearly $300k just to get his life back.

If you choose to consider that bit of thuggery as having “nailed” us, congratulations, because you did just that. You extracted $300k from my partners. Whoopee. I hope that makes all of you in the Consumer Protection Division proud, as I’m sure it does.


Not over

I noticed you didn’t mention I still have my day in court scheduled with you for later this year.

It’ll be interesting to hear how you spin things when I prove this entire foreclosure rescue scam case of yours to be the complete farce we all know it is. What then?

At some point, sooner than later, Rob, you’re going to have some explaining to do. The free ride ends, as will the foreclosure rescue scam your office is running.

And, btw, I’d rather be a hammer than a nail . . .

In the arena,

Joe Kaiser


7 Responses to: “Absurdity, Again”

  1. DaveD responds:
    Posted: May 8th, 2008 at 5:36 am

    I’m confused. If there is a five day “cooling off” period, how does that square with a drop-dead date for stopping the foreclosure?

    If the deal has to be done on a Friday, to stop an auction on Monday, at this point you (the investor) is likely to have paid out $10,000 to stop the foreclosure and pay/bring current the loan. That means you have some real skin in the game. So now (Tuesday) the seller elects to cancel his sale to you. How exactly do you put the toothpaste back into the tube?

    The business dynamics have completely changed. All the pressure is now off the seller… because you did the rescue. Who wouldn’t take the free pass, cancel and stay? So then there is that matter of how you get your ten grand back? Guess that is your problem, huh?

    The seller, the last time I looked was still broke… but he now bought himself a lot more time, thanks to your generous contribution. So who would be scamming who? I’m starting to see what you mean when you decline to do any more “rescues” by saying “the AG made me do it.”

  2. Joe Kaiser responds:
    Posted: May 8th, 2008 at 8:44 am

    Under the new law, if there’s less than five days remaining, the seller is entitled to cancel the deal on the morning of the last day to cure.

    Here’s the code . . .

    In addition to any other right of rescission, a distressed homeowner has the right to cancel any contract with a distressed home purchaser until midnight of the fifth business day following the day on which the distressed homeowner signs a contract that complies with this chapter or until 8:00 a.m. on the last day of the period during which the distressed homeowner has a right of redemption, whichever occurs first.

    So, in your scenario, with redemption likely ending at 5:00 pm on Friday, he’d have until 8:00 am Friday morning to cancel.

    Joe

  3. Chris responds:
    Posted: May 8th, 2008 at 6:45 pm

    How can this legislation be consitutional?

    It clearly places overly burdensome regulations on an individuals property rights. These artificial constraints on the ability to negotiate can only harm the property owner by restricting their market options.

    Only the free market can determine the true value of real property. It is the government’s pretense of knowledge of a mythical “market value” that seems to me to be the absurd foundation of this bill.

  4. Vlad responds:
    Posted: May 8th, 2008 at 9:19 pm

    So,

    If someone in foreclosure is, say, 10K upside down (how unlikely is that :-), what happens? They get -82% of that “equity” and bring $8,200 to the table?

    Yo, Dunn, are you going to help them pony up the cash? They may need some “green” paper. Your white one won’t cut it….

  5. anemonehead responds:
    Posted: May 9th, 2008 at 8:19 pm

    Hey Joe,

    Just noticed this on Washington Realtors site in the faqs section regarding the new law.

    http://www.warealtor.org/distressed_properties.asp

    What properties are considered to be “distressed homes?”
    A distressed home is owned by a person who falls into any of the following categories:

    1. the homeowner is at risk of losing the home due to nonpayment of taxes;

    2. the homeowner is at least 30 days late on a mortgage payment;

    3. the homeowner is in default of any mortgage term such that the lender could accelerate the balance owing; or

    4. the homeowner believes they are likely to default on the mortgage within 4 months and tells this to, among others, a real estate agent.

    In my opinion, they wouldn’t make very good poker players. Their tell is in the first condition of a distressed seller. If I were you, I’d be honored they were thinking of you first.

  6. DaveD responds:
    Posted: May 10th, 2008 at 8:04 am

    Anemonehead,
    My favorite is the 4th one. Basically, “If you think you are distressed, or might become distressed, you are in fact distressed… better call a realtor!” Good thing they found a seat for themselves at the table, huh?

  7. SpyBoy responds:
    Posted: May 24th, 2008 at 8:02 pm

    Greetings,

    Chris asks; ” How can this legislation be constitutional ? ”

    Well, it may not be. Nevertheless, legislative power/control machinations at work. All legislation, properly passed/duly enacted, is granted a “presumption of constitutionality”.

    A bit of historical research will reveal that that presumption is a powerful tool used to maximum advantage by all legislatures.

    My question, regarding this biil, and the magic # of 82 % of ” market value ” is, could that be construed to be, in a particular circumstance, ” distressed sale value ” ?

    Thank you.
    SpyBoy


Post a Comment

Enter Your Details:


You may write the following basic XHTML Strict in your comments:
<a href="" title=""></a> · <acronym title=""></acronym> · <abbr title=""></abbr>
<blockquote cite=""></blockquote> · <code></code> · <strong></strong> · <em></em>

  • If you’re a first-time commenter, your response will be moderated.
  • If your response includes a link, it will require moderator approval.
Enter Your Comments:



Note: This is the end of the usable page. The image(s) below are preloaded for performance only.