I recently reviewed our foreclosure rescue deals and came away wondering what the heck you guys were thinking when you claimed we were scam artists.

And what was AAG David Huey thinking when he said he’s not aware of any foreclosure rescues that have worked?

Assistant Attorney General David W. Huey

Of the 30 or so rescues we did, every one of them worked.

Granted, a couple didn’t go exactly according to plan, but we did all we could to be sure things turned out more than fair for all concerned, and without exception, they did.

Without exception, Rob, all 30 of them, 100% successful.

Blinders

I hear Melissa Huelsman saying she’s never seen a single rescue that’s worked. Well, I’ve got 30 of them and she’s welcome to look at one or all to learn how it’s done.

She’s not returning my emails, so that probably means she won’t, but it’s disingenuous of her to stand before a group of attorneys, as she did last Friday, and say, “I’ve never seen one that worked.”

Again, I’ve offered to show her 30 of them.

Still in their homes

And, that tells me something else.

If successful foreclosure rescues really are as rare as hen’s teeth, then my track record is nothing short of remarkable.

And if foreclosure rescues are so hard to pull off that neither your office nor any other consumer advocates can honestly say they’ve never come across one that actually worked, then I demand a monument.

Okay, a medal then, at least.

Not aware

And that’s how, apparently, AAG David Huey, after looking at all 30 of those deals, can stand in front of a video camera and say . . .

Anybody who contacts you with a scheme to save your house, I’d would be very very skeptical about it, because I’m just not aware of anybody out there who is aggressively marketing anything that works.— Assistant Attorney General David W. Huey
Tacoma, WA

Remarkable, Rob.

It’s not that successful foreclosure rescues don’t happen.

It’s that your office is unwilling to consider ANY foreclosure rescue where an investor stands to make a profit as one that works.

And once again, it comes down to nothing more than the twisted view your office has of the role we investors play.

30 for 30

Like Melissa, it’s disingenuous for David Huey to say he’s not aware of any foreclosure rescue program that works, especially considering he’s spent the last three years with 30 successful foreclosure rescue files in the box in the corner of his office.

Someone from your office should have been able to recognize them as the art form they are . . . foreclosure rescue at its finest.

Without exception, Rob, all 30 of them, 100% successful.

In the arena,

Joe Kaiser

Having attended the Foreclosure for the Rest of Us seminar last week, I’ve learned our only role as investors in the foreclosure marketplace is to bid on properties at foreclosure sales.

That’s it, and nothing more.

Attorney Melissa Huelsman, in her presentation, stated that owners letting their homes go to the foreclosure auction are pretty much guaranteed to receive most if not all their equity, with the average selling price being “80 to 82 percent” of fair market value.

Well, no.

Huelsman

She talked about a foreclosure rescue case she had where another attorney testified the property would most certainly have been bid up at the sale and her client would have been significantly better off losing it in foreclosure than dealing with the scam artists.

I guess she just doesn’t get it.

Pssst . . . IT’S A CRAP SHOOT.

There’s no way to know what a property in foreclosure will sell for at the sale. All kinds of things can and do happen, and suggesting someone in foreclosure is better off rolling the dice at the sale than dealing with an investor is, frankly, absurd.

Believe me, only an attorney who’s never lost his or her home in foreclosure would suggest something so completely ridiculous. Well, maybe a certain legislator or two might as well.

$1.2 Million

Earlier this year the Tapps Island waterfront home pictured above sold on the courthouse steps at a trustees sale. And, although it’s assessed at $870k, it last sold on the open market for just shy of a million dollars.

I don’t know why the owners couldn’t pay their mortgage or didn’t respond to investors offering to buy it before the sale (or perhaps even do a sale-leaseback deal), but I do know what happened at the foreclosure auction . . .

It sold for just over $390k, a dollar more than the lender’s opening bid.

A DOLLAR.

The investors I talked to agreed it was worth about 1.2 million, but for whatever reason, when it came time to bid, only one fellow did and that equity went “poof.”

You just never know

What would it have sold for?

Well, we don’t have to wonder, do we? We know exactly what it sold for . . . one dollar over the opening bid.

Except that, had an investor done a foreclosure rescue deal and had Melissa Huelsman subsequently represented the seller, she’d likely have an attorney on the witness stand saying the property would have sold for something closer to $800k or even $900k.

Ugh, no.

It sold for a dollar more, period, which is the nature of the foreclosure auction . . . you just never know.

And that’s why, Rob, you don’t suggest to people they gamble their home at a trustees sale as if it were a $2 lotto ticket.

My bad?

So what do you say to that owner now?

What do you tell him when he says, “Hey! I thought you said I’d be better off letting it go to sale,” or “I thought the legislature knew what it was doing when it effectively banned sale-leaseback transactions,” or “What happened to my 82%?”

Oops?

My bad?

Seemed like a good idea at the time?

Welcome to WA

Don’t you find it odd that the law abhors forfeitures but the Office of the Washington State Attorney General actually recommends it and created laws to make sure owners choose that route rather than risk dealing with an investor?

I know I, and virtually every other thinking person with any real estate experience, does.

abhorrent
detestable, hateful, loathsome, despicable, abominable, execrable, repellent, repugnant, repulsive, revolting, disgusting, distasteful, horrible, horrid, horrifying, awful, heinous, reprehensible, obnoxious, odious, nauseating, offensive, contemptible. — Apple Thesaurus

Please stop misinforming people in foreclosure by suggesting letting their homes go to sale is something to be considered. It’s not. It should be avoided no matter what.

NO MATTER WHAT.

Foreclosure, Rob, and the suggestion it is a solution in and of itself, is abhorrent.

In the arena,

Joe Kaiser

We talked yesterday about why someone in foreclosure would do a leaseback type deal, receiving “no money.”

Does this type of deal really make no sense, compared to losing one’s home to foreclosure?

What if foreclosure is in 48 hours or less?

“No sense”

AAG Jim Sugarman suggested the leaseback deal only makes sense because of the opportunity to rebuy the property at a later date.

The only reason someone would sell their house for no money is because they were promised the opportunity to buy it back . . . because otherwise, it makes no sense at all. — Jim Sugarman

Has he really taken a long hard look at the alternative (losing your home), particularly with foreclosure 48 hours away?

Irrational behavior

Northwest Justice Project Attorney Eric Dunn, HB 2791 co-author, in his letter to the editor to the Seattle Post Intelligencer, says . . .

. . . no rational homeowner would knowingly enter into one of these transactions . . .— Eric Dunn

Not true.

Plenty of rational homeowners would love the opportunity to enter into one of these transactions if the alternative is they lose their home tomorrow. With 48 hours or less to solve their foreclosure problem, there’s nothing remotely unfair about this sort of deal.

What’s unfair, frankly, is telling them you know what’s best for them and in your opinion, this option to save their home isn’t a viable solution to foreclosure so you’ve decided to ban it.

They’re not rational for considering it?

Says who?

Certainly not the people facing the loss of their homes. And, even more certainly, those same people three weeks later when the sheriff shows up to toss them out on the street.

Foreclosure is better

Or, is Eric suggesting, as Representative Patricia Lantz has, that losing one’s home to foreclosure is somehow a better choice?

. . . foreclosure would be preferable to the distressed property conveyance. — Patricia Lantz

Good grief, Rob, your bill’s prime sponsor is operating under the delusion that foreclosure is better. That’s her solution?

Is it any wonder this thing has gotten so far off-track?

Workouts work?

So what do you suggest someone do with 48 hours or less to save their home?

The other approach that we can be taking is the one that we are taking which is to set up a a program so that people who are ugh, you know, behind in their payments and maybe about to go into foreclosure or actually are in foreclosure can call and seek some counseling, some advice. — Attorney General Robert M. McKenna
KUOW Radio, March 9, 2008

Okay, except that . . .

Workouts don’t work

Attorney Melissa Huelsman argues that contacting lenders and attempting to put together foreclosure workouts is often a complete waste of time and a “very false notion”, saying . . .

. . . most lenders, not all, but most lenders and most servicers are not actually working with homeowners, they are not doing workouts, and people are going to lose their homes . . . — Attorney Melissa A. Huelsman
LegalTalkNetwork.com

And Huey confirms . . .

Don’t bother

In the recent Seattle Weekly article Sold Out, AAG David Huey suggests you should contact a U.S. Department of Housing and Urban Development–approved counseling agency before things get too bad, except that . . .

You can’t call two days before foreclosure. — Assistant Attorney General David Huey

What to do?

So, at least according to the usual suspects, with 48 hours or less until one’s home is lost to foreclosure. . .

• Doing a leaseback type deal, the very deal targeted by HB 2791, makes “no sense,” unless you’re guaranteed you can afford to buy it back, according to Jim Sugarman.
• That type of deal is inherently “unfair” and any homeowner choosing a leaseback solution is irrational, according to Eric Dunn.
• The better alternative is to lose your home to foreclosure, according to Pat Lantz, because that type of deal can only be a scam.
• You should get consulting and learn how to work things out with your lender, according to Rob McKenna.
• Trying to work things out with your lender is pretty much a waste of time, according to Melissa Huelsman.
• With only two days left, you can’t call the lender, according to David Huey.

Confused?

Me too.

I suggest sorting out the confusion prior to creating new legislation to address the very problem you’re confused about might have been something to consider.

No meaningful solution

Notice anything missing?

With 48 hours remaining until foreclosure happens, your office can offer no real solution to people in foreclosure. None.

Well, none, that is, unless we accept Pat’s crazy notion that foreclosure itself is a viable solution to foreclosure. No rational person believes foreclosure is the solution to foreclosure, Rob.

And, while it would be great to be able to get people to take action much sooner in the process, they won’t. It’s a basic foreclosure dynamic your office either doesn’t understand or refuses to acknowledge.

Reality, though, is difficult to avoid, and in the end people will still be hanging with 48 hours left to go until some lender takes their home away.

Solutions o’ plenty

Since you can offer no solution, Rob, might I make a suggestion?

Maybe they could just call me?

Because we all know what happens when they give the Real Estate Equalizer a call, don’t we?

We all know those families today are snug as a bug in a rug. Yes, all 24 of them, saved from foreclosure.

I’d like to be able to help people facing foreclosure, they’d like my help, and collectively, we wish you’d get out of our way so I can save their homes.

In the arena,

Joe Kaiser

Consumer advocate attorney Melissa A. Huelsman posted the following challenge on www.businessweek.com:

I . . . request for people . . . who are conducting this business “honestly” to show us how it works. I would LOVE you to show me satisfied customers who got their house back at a reasonable price that they could afford. PLEASE!— Foreclosure Rescue-Rescue Attorney
Melissa A. Huelsman

Melissa A. Huelsman

I accept her challenge.

Hello?

Some ten days ago I sent the following email to Melissa . . .

Hi Melissa,

Joe Kaiser

Hello?

So far, no response.

If you happen to see her in the hallway, would you let her know to get in touch with me so we can get her up to speed on this thing? Thanks.

In the arena,

Joe Kaiser

I see you’re a big proponent of borrowers and lenders working things out so that foreclosure can be avoided and homes spared from the auction block.

My question to you and anyone in your office . . . have you ever attempted one?

Probably not.

where my money at?

Because if you had, you’d know lenders require the one thing borrowers in foreclosure don’t typically have, money. And do you have any idea how uninformed you sound when you suggest foreclosure can be avoided by simply picking up the phone and talking to the lender?

It doesn’t work like that, Rob, and it never did.

Solving difficult foreclosure problems takes more than a brochure and a phone call . . . it takes someone writing a check for thousands and thousands of dollars.

Patronizing at best

Or, does your office really think loss mitigation departments hand out extensions simply for the asking? This is embarrassing, Rob.

A word of advise . . . unless that HUD certified consultant you recommend also makes loans on the side, suggesting a solution can be found by talking to him is little more than lip-service. In the real world, this isn’t a solution at all.

In fact, it’s downright misleading and offers false hope, a terrible thing to do to people in foreclosure.

Yet another program?

Here are your comments on KUOW Radio about this very subject . . .

The other approach that we can be taking is the one that we are taking which is to set up a a program so that people who are ugh, you know, behind in their payments and maybe about to go into foreclosure or actually are in foreclosure can call and seek some counseling, some advice.

What motivates us to put this program in place is that, ahhh, national studies show that over half of people who go into foreclosure haven’t talked to the lender ahhh, and what we want to do is get the borrower and the lender together to see if a workout might be possible. It won’t be possible in every case, but in many cases it might be . . .— Attorney General Robert M. McKenna
KUOW Radio, March 9, 2008

Emphasis goes on “might be,” because what your lack of experience in this arena doesn’t allow you to realize is that talking to lenders without money in hand is a complete waste of time.

People get to call and seek counseling and advice?

That’s your program?

Good grief.

They don’t want counseling and advice, Rob. They want someone to write the big check that ends foreclosure and saves their home. Anything else is meaningless.

False Notions

Foreclosure rescue-rescue attorney Melissa Huelsman has a completely different view of the lender workout strategy . . .

. . . and the fact of the matter is all of this activity (the new proposed federal legislation) is premised upon the very false notion that lenders and their servicers are actively engaging in loss mitigation right now and are doing workout programs with borrowers when in fact all evidence that we have is to the contrary.

It’s been published in the New York Times and Wall Street Journal in the last few weeks demonstrates that most lenders, not all, but most lenders and most servicers are not actually working with homeowners, they are not doing workouts, and people are going to lose their homes . . . — Attorney Melissa A. Huelsman
LegalTalkNetwork.com

How can it be?

I’m told the first rule of logic is that something cannot both exist and not exist at the same time. With that in mind, please explain how . . .

(1) Your office contends foreclosure can often be solved through loss mitigation and encourages homeowners in trouble to contact their lenders and work something out, and

(2) Melissa Huelsman contents the lender workout is nothing more than a false notion that, in reality, happens infrequently if at all, and from her tone, sounds like a waste of time.

These assertions cannot both be accurate. If your office and Ms. Huelsman completely disagree on what is essentially the core “how to stop foreclosure” premise, one of you has to be 100% in error.

Pssst . . . it’s not Melissa.

HB2791

Do you see the problem, Rob?

You’re suggesting workouts as the way to stop foreclosure, and attorney Melissa Huelsman, someone whose opinion your office values, someone who’s actually in the foreclosure trenches and ought to know, summarizes your approach by saying, “people are going to lose their homes.”

I tend to agree.

Rob?

You took investors out of play with HB2791, and workouts, if we’re telling the truth here, don’t work out often enough to be considered a viable option.

So now what?

Rob?

Please tell us you have a Plan B and that this simplistic, uninformed solution isn’t the only thing your office is bringing to the table.

In the arena,

Joe Kaiser

I asked your office for copies of all complaints you’ve received regarding foreclosure rescue scams.

You know, cases where someone “handed over” his home, to use your words, to an investor with the understanding he’d be able to lease it and later buy it back, but ultimately couldn’t make the rent payments and was evicted.

Those are the cases said to be on the rise, so much so your office asked for new legislation to address the so-called problem.

Sorry, getting ahead of myself here.

Public Records Delayed

Yes, you successfully created the hype needed to get legislators to fall in line and support HB2791, and the Governor ended up signing it into law March 31, 2008.

I found it interesting your office, after nearly a two month wait, sent a letter dated March 31, 2008 to let me know the records I’d requested under the Public Records Act were finally ready.

Why the two month wait, and why let me know the very day it was signed into law?

Me thinks your office purposely waited until after your legislation was signed because you knew those records would expose it for the hoax it is.

Grand total?

It doesn’t surprise me, but I’m certain it will surprise the Governor (as well as the legislators conned into believing there was a need for this sort of legislation).

In the last five years, the Office of the Washington State Attorney General, including all 12 offices located throughout the state, has received a grand total of exactly four (yes, 4) actual foreclosure rescue scam complaints.

Sure, I see there’s a dozen or so complaints in the package of docs, but most have nothing to do with sale/leasebacks.

Four?

Not a misprint.

Throughout the entire state, just four complaints have been registered with the your office from people supposedly “scammed” out of their homes doing foreclosure sale/leaseback rescues.

And, of the four complaints, from my review, at least three appear to be bogus.

“All of the Abuse”

More Huey . . .

AAG David W. Huey

The leaseback rescue deal . . . is the only one targeted under this legislation because that’s the one where we’re seeing all of the abuse. — AAG David W. Huey
Sold Out
Seattle Weekly.com

All of the abuse?

What?!?!?

Is there anything coming out of your office that’s genuine or has at least some semblance of reality?

Apparently, no.

We don’t know

From the recent article, Sold Out, in the Seattle Weekly, we’ve learned . . .

The attorney general’s office doesn’t have numbers on how widely used the schemes are. — The Seattle Weekly

Well, shouldn’t someone have taken the time to check before telling the legislature this “problem” meant a massive overhaul of our foreclosure laws was needed without delay?

Wouldn’t that have been the prudent thing to do?

Again, apparently, no.

Good grief

I took the time to get it sorted out for you, Rob, and you’ll be happy to know “all of the abuse” David mentioned comes from just four complaints having what appear to be little merit, if that.

And the foreclosure rescue scam “epidemic” sweeping the state of Washington and putting homeowners in foreclosure out on the street?

It’s a hoax.

You just made it all up, exactly as predicted . . .

Please tell me this new legislation isn’t just some cockamamie scheme to garner political juice for Rob “The Scambuster” McKenna.

Which, btw, I’m confident is the real story here. — Joe Kaiser
I doubt it, Rob
January 17th, 2008

Psych!

Now, I’m certain there are foreclosure rescue scams happening that don’t get reported to you (I read about them in the paper every now and then), and your office may have missed one or a dozen when gathering the records I requested.

That’s to be expected.

But to come to the legislature with nothing more than a trumped up story about the business we did (which the new law doesn’t even address) and the hokum from Melissa Huelsman (she’s “swamped” like I’m thin), is reprehensible.

We now have the worst, most onerous foreclosure laws on the books. Laws, I’m certain, will cost people their homes.

And why?

Because it’s an election year.

Thankfully, from your perspective, Rob, the Governor signed off on it before she had the facts that would have shown it’s a problem only in the minds of you and your staff.

Four?

It’s a hoax.

You fooled her good.

In the arena,

Joe Kaiser