Please get it right

Posted May 7th, 2008 by Joe Kaiser

That's more than those sellers net if they list and get a full price offer.

Dear Rob,

The audio on your website describing the new foreclosure rescue scam laws is flat-out wrong . . .

badhairday.jpg

Our bill to prevent rescue scams passed, it requires . . . that homeowners must receive at least 82% of the difference between the property’s fair market value and the underlying mortgage in the event they transfer their property to a third party who supposedly is going to keep them out of foreclosure.— Attorney General Robert M. McKenna
Press Release, March 14, 2008

The 82% has to do with the market value of the property itself, NOT the equity. Can you imagine the absurdity if it was based on equity?


The Math

Here’s an example . . .

On a $100k house, where $50k is owed, investors according to you are now required to pay $91k ($50k x .82 = $41k, plus $50k owed = $91k).

$91k?

That’s more than those sellers net if they list and get a full price offer.

On that same home, only this time with $75k owed, investors would be required to pay $95.5k ($25k x .82 = $20.5k, plus $75k owed = $95.5k).

Or, maybe that’s what you really believe to be fair?


Third Party

You’ve also said, “. . . in the event they transfer their property to a third party who supposedly is going to keep them out of foreclosure.”

When I saw this originally, I assumed it was designed to be an “anti-flipping” statute, because if I’m transacting with John and Mary, it’s just me and them, two parties.

Who’s the third party if there’s just the two of us?

Or, does the 82% requirement, as you seem to suggest in this audio, only apply when an investor ties up a property on a distressed property conveyance type deal and flips to some other investor?

That can’t be right, either.


A Very Simple Bill

Perhaps it doesn’t matter because that third party language no longer shows up and apparently, was rejected in the rewriting.

Or, maybe it shows up in one of the other ancillary bills?

If so, I didn’t see it.

Again, if it’s so very simple, how is it no one seems to be able to figure out what it says, including you?


Inappropriate

And one final point . . . the language is particularly offensive.

“Supposedly?”

Give us a break. Do you seriously think we investors deserve that sort of treatment from your office?

We don’t.

And by the way . . . they’re already in foreclosure. What we do is not “supposedly . . . keep them out of foreclosure.”

What we do is stop the damn thing.

In the arena,

Joe Kaiser


6 Responses to: “Please get it right”

  1. BikerJim responds:
    Posted: May 7th, 2008 at 10:19 am

    Joe,
    I’ve noticed folks who seem to agree with, or believe Rob’s take on his fancy schmancy new law, use certain words and phrases that THEY seem to think make them superior beings…………..elitists.

    “supposed”, “So called”, and “Apparent”.

    It’s APPARENT, that the SO CALLED Attny General has come up with a SUPPOSED solution, for a problem, that never really was.

    I wonder……….when all these foreclosures happen and the defaulted barrowers lose their homes, and do not get even close to the 82% at auction (Rob seems to think they will be better off allowing the foreclosure to proceed, aside from magically having money fall out of their posterior to reinstate, there is no better solutio…..right Rob et al)……….can they then go after the person who gave them the advise that ‘foreclosure is SUPPOSEDLY better”?

    As always, interesting read here…………thanks,
    BikerJim

  2. Jason responds:
    Posted: May 7th, 2008 at 2:43 pm

    Joe,

    A fun little project might be:

    You take 5 profiles you would be interested in based on your normal criteria.

    Seal your offer, have it sealed by a notary.

    Follow all 5 through auction.
    See what happens, simple dollars only.
    How much cash would the owner have walked away with with your deal vs. what happened at auction because the AG and a “Section 8″ lawyer feel they knew what was best for them.

    Deal vs. Deal
    straight up!

    Not even considering the fact that they wouldn’t have to move and several other pluses with your deal.
    Simply straight up!!

    Best wishes,
    Jason

  3. anemonehead responds:
    Posted: May 9th, 2008 at 7:54 pm

    Joe,

    As I’ve said before about all this nonsense…follow the money. The only people this bill protects is Realtors and attorneys, protects their commissions and billable hours that is. They’re afraid that the small amount of deals that investors do, takes money out of their pockets. Both groups have very large and organized lobbying groups and throw millions at the people who wrote the legislation. The scarey thing is it’s happening all over the U.S..

    The sad thing is, even they don’t understand the new statute. Here’s the first paragraph form Washington Realtors regarding the new law from http://www.warealtor.org/distressed_properties.asp :

    DISTRESSED PROPERTY LAW FAQs
    Last updated: May 9 at 9:30am

    “The information provided in these FAQs was developed by the Washington REALTORS┬« and NWMLS. Because the law is new and in some cases, ambiguous, it must be interpreted before it can be applied. Different lawyers and judges will interpret this statute differently. You are encouraged to seek the advice of your own lawyer in determining your approach to compliance with the law. The following are recommendations by the Washington REALTORS┬« and NWMLS for compliance with the new law.

    The following are the most commonly asked questions regarding the Distressed Properties Law. If you have additional questions, please call 1-888-222-8843 and leave a detailed message including your question and call back information. We will have someone who has expertise in that field return your call.

    NOTE: This document will change often. To prevent confusion, the print function has been DISABLED! ”

    I really got a giggle out of the NOTE.

    The legislators, realtors and attorneys, don’t have a clue as to the damage they are causing.

  4. Joe Kaiser responds:
    Posted: May 9th, 2008 at 8:17 pm

    “To prevent confusion, the print function has been DISABLED!”

    LOL!!! (I have never, to my recollection, written LOL, btw). That’s the funniest thing I’ve ever seen.

    Haven’t they heard . . . it’s a very simple bill? Heck, it’s the most sophisticated foreclosure law in the country.

    What’s wrong with these MLS people?

    Joe

  5. Todd (CO) responds:
    Posted: May 21st, 2008 at 7:06 pm

    The really sad part about this new law in your state and the new law in mine………. is that they are muddying the water with contradicting opinions and convoluted text that the lawyers THEMSELVES can’t even read this crap…… And they think as investors, “WE” are trying to confuse the poor victims of foreclosure, hell…… this law will make their heads spin!!!!

    If the attorney you are supposed to hire can’t make out what it means or how it is supposed to be applied, then how is the everyday layperson supposed to understand it!!!!

    The more important issue is the 82% cap…….. errrr crap. In my opinion this just kills the free enterprise system. How about we create legislation that says “if you can’t afford a house and prevent it from going into foreclosure, it would be unlawful to proceed with the transaction!!!!” Or to even more prove the point……. “It would be unlawful to have a death, divorce, or any other financial matter during the course of home ownership!!!”

    I am kidding of course, but it just goes to show how our current system operates. “Lets allow freedom to make choices but take away the consequences of those actions……. thus strangling free enterprise and personal responsibility.”

    Just my opinion

    Todd

  6. Micha-el responds:
    Posted: May 30th, 2008 at 10:09 am

    I have shared your LOL moment…

    Nothing like preventing it from being in writing to clear all confusion from the air…

    Well, if it was as suggested a path to eliminate the investor types from the Realtor arena… boy did we get bucked off!

    The dis-immination was also sensored at the NWMLS preventing it from going to the unwashed “salespersons” mail boxes and Discovery sites… ONLY to the Brokers.

    About the 82% is that gross or net equity ?


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.