Merry Christmas

Posted August 28th, 2008 by Joe Kaiser

I have just one question, Rob . . . could your office possibly get it any more wrong?

Dear Rob,

For the sake of argument, you’re in foreclosure, with 24 hours to get it brought current or you lose your home.

Are you with me?

In 24 hours, if you don’t get this thing squared away, your home is sold at auction.

And then I show up and make you the following proposal . . .


The Proposal

I’ll stop your foreclosure by curing the default, and ultimately, all you’ll have to do is pay me 50% of the future profits.

I’ll even let this thing run four years, so you don’t have to be concerned about paying me any time soon. In fact, you don’t have to pay me a penny for that entire time. And, if any problems come up that require funds, I’ll be glad to step in and get them handled.

And when that four years is up, I’ll even finance my profits so you don’t have to get a loan from a bank or risk not being able to get a loan at all. Just start making payments at 10% and we’ll call that good enough.

And, I’ll advance all your closing costs so you don’t have to bring a penny to escrow when it comes time to settle up.

Even better, if you’re short of funds and need some operating capital at that time, I’ll loan you an additional $10,000 (we’ll just add it into the loan) so you can walk out of escrow with a check in hand.

You interested?

Of course you are. You, along with everyone else on the planet at risk of losing his home takes this deal in a heartbeat.


Insane?

Who’d ever offer anyone that deal?

Me.

It’s a real deal, and it worked out exactly like that (and in case you’re wondering, we did just fine ourselves).

Four years later, the fellow is still in his home, and when AAG Jim Sugarman and ace investigator Renee Shadel met with him last month, they made it clear he’d been scammed.

He told them my deal felt like a Christmas present.

Not to be deterred, Sugarman told him he “screwed up,” saying he’d have been better off letting it go to the foreclosure sale in hopes an overage was created.

I kid you not.

Sugarman actually suggested passing on my “Merry Christmas” deal and instead losing his home to foreclose made more sense.

It leaves us with only one possible conclusion, Rob . . . your people are idiots.


Reality

Today, the fellow is paying us with the equity the house created. It doubled in value during those four years and had we not been around, that appreciation never happens for him.

Had we not been around, he’s foreclosed on, evicted, and homeless, hoping bidding activity creates an overage. That’s absurd. Suggesting it’s a better solution than my deal only makes sense if you enjoy living in your car.

He doesn’t.


Mucked up

And thinking he’d be able to collect the overage, if any, was equally absurd because if your people had a clue they’d have known title was mucked up as well, with his deceased grandmother showing up as a part owner.

Any overage created would not have been collectible without an attorney opening probate, a process requiring funds he did not have and more than a few months he could not have afforded to wait.

I have just one question, Rob . . . could your office possibly get it any more wrong?

Truly, I cannot imagine how.

In the arena,

Joe Kaiser


6 Responses to: “Merry Christmas”

  1. DaveD responds:
    Posted: August 29th, 2008 at 1:37 pm

    The image that comes to mind is Jim stuffing the Christmas tree up the chimney, while explaining to the Whos of Whoville (your owners) that it’s for their own good.

    Better for them to lose their Christmas, and subsequently their house, than to get scammed by Santa! After all, they can always buy another house, along with a new tree, when they cash their overage check. They’ll probably need a new car as well, after living in it for a few months.

  2. DaveD responds:
    Posted: August 30th, 2008 at 8:14 am

    Oops! Just noticed something with my above post. Once they cash their phantom overage check they will still need to get a new loan to buy another house. Impossible, of course with that foreclosure on their credit. Just another pesky detail for guys like Jim to sort out, but I’m thinking he’ll ignore it. Kinda messes up the academic/fictional template these guys delusionally subscribe to.

    His answer, no doubt, would be they should be renting because they aren’t smart enough to be owners. Even with Joe’s remarkable rescue service. How incredibly arrogant… the only explanation for your owners being talked down to.

  3. Chris responds:
    Posted: September 12th, 2008 at 1:30 pm

    Writes Steve Berger:

    “The idea of a foreclosure freeze is gaining lots of momentum in the senate. Nice magic bullet. Marginal borrowers will now have an incentive to default earlier than otherwise, mortgage lenders will see their cash flow reduced and the value of their collateral sink, which in turn will impair their ability to lend. That, of course, will put more downward pressure on housing prices and prolong the agony and market readjustment process. A housing recession will become a housing depression.

    The impairment of contractual rights will make prospective lenders wary of lending or induce them to charge a higher rate to compensate for the uncertainty of their contractual rights being upheld putting yet further downward pressure on home prices.

    A foreclosure freeze will also put Fannie and Freddie in even worse financial shape, if that is possible. Now that they are backstopped by the federal government this, of course, means that the cost to the taxpayer will be that much higher either through greater taxes or currency debasement if more money is printed to fill the gaping black financial hole. “

  4. Loya responds:
    Posted: September 20th, 2008 at 12:21 am

    With a State Budget shortfall of over 3 Billion dollars, Rob where are your priorities??????????? Go after the real scammers Rob……
    There are real bad guys out there right now that your office is not going after because you are spending so much time on a guy that has sued and won cases against county prosecutors not a guy that has scammed anyone……………. The county attys have made you go off target……..Joe has done nothing to warrant your efforts—–settle with him now and go after the real scammers! My tax dollars are being wasted by you!

  5. Bui responds:
    Posted: October 24th, 2008 at 2:51 pm

    I have one question:

    When you said “pay me 50% of future profit”, what are you talking about here? For instance, if the house is worth 200k as-is and the owner owes 50k plus 10k in arrears, would the 50% future profit = about 70k (current equity divided by 2), minus selling costs, plus 50% of possible 4-year appreciation? Or would it be just 50% of the possible 4-year appreciation plus the 10k you put out to pay the arrears?

    Bui

  6. Joe Kaiser responds:
    Posted: October 24th, 2008 at 5:42 pm

    Bui,

    The way the particular deal worked out, the fellow payed us back by essentially giving us 50% of the appreciation we created for him. Today, he has more equity than he did the day we rescued him.

    And yet the AG’s office told him my deal was took advantage of him and the law didn’t permit it, essentially telling him he was scammed.

    Joe


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