For the last few years you’ve been calling me a scam artist, saying the overage funds we claimed actually belong to former owners who sold us their properties because the law, RCW 84.64.080, says so.

You even sued me over it and won, obtaining a judgment that included nearly $650k in restitution to these same owners in repayment of the overage funds we collected.

I beg to differ

Of course, we’ve said time and time again the law says no such thing and could not possibly say such a thing. We bought properties and, as owners, any profits we created were ours to keep.

Who’s right?

The Court of Appeals ruled on your interpretation of RCW 84.64.080 today, forever answering the question, “Who gets the money?”

In this corner

Put succinctly, (and straight from the horse’s mouth), here’s your position . . .

After taxes are paid from the sale price, there may be substantial money left over. State law says that such a surplus rightfully belongs to the person who owned the property (when the suit to foreclosure was filed).— Assistant Attorney General David Huey

And here is mine . . .

A property owner in tax foreclosure is free to sell me his property, including any claim to future overage funds that may materialize at the tax sale. And once sold, his rights become my rights.Joseph M. Kaiser

The ruling

But who cares what I think? Here’s what the Court of Appeals, Division II, State of Washington has ruled . . .

Because RCW 84.64.080 was intended to protect the treasurer in paying out tax sale proceedings and not to determine ownership or prevent a tax-delinquent property owner from selling his or her interests, we reverse and remand for the trial court to determine who actually owned the property at the time of the sale.

Who owned the property at the time of the sale?

That would be me, and, as such, I am the rightful owner of the overage funds in question. The ruling continues . . .

. . . the trial court erred in finding the assignment void under RCW 84.64.080 because the procedural nature of RCW 84.64.080 has no impact on determining the rightful owner of the proceeds. –Authored by Judge David H. Armstrong,
Concurring Judge J. Robin Hunt and
Judge Marywave Van Deren

Here’s the complete Court of Appeals Opinion.

The State v. Kaiser

We can now be certain RCW 84.64.080 has “no impact” on the ownership of overage funds. None, and it never did, in spite of the ridiculous claims your office made to the Court and in the press suggesting it did.

Likewise, we can now be certain that contrary to your office’s farcical contentions, the law does not unconstitutionally reinvest former owners with rights to claim proceeds from properties they’ve long since sold.

The Damage is done

With zero consumer complaints, this investigation started because Pierce County Prosecuting Attorney Bob Dick, upset about paying us overage funds (the County prefers to keep the funds), told your office we were violating RCW 84.64.080.

We weren’t, and Bob Dick was 100% in error.

As were all the county treasurers who told former owners “the law says it’s your money.” It doesn’t. Yes, Lisa and Barbara and Steve and Rose and Phil and McGoon and all the rest of you who said we’d scammed sellers by simply buying their properties (and paying them in full), we didn’t.

Also 100% in error was former AAG Cheryl Kringle, as are AAG David Huey and AAG James Sugarman today.

As are you and your office, Rob, about what we investors do. 100% wrong. Buying properties in tax foreclosure and using the sale as an exit strategy is not a scam and never was.

Overage Plays

And yes, it’s really that simple . . .

We bought junk properties in tax foreclosure, let them continue on to sale in hopes there’d be an overage, and the Court of Appeals has now confirmed any overages those sales created are ours to keep.

100% ours, in fact, and EXACTLY what I’ve been saying all along.

It begs the question, “How could the Attorney General of the State of Washington be so completely wrong regarding basic, fundamental property rights?”

I shuddered at the very thought.

In the arena,

Joe Kaiser

Although I’ve never met attorney David Leen, he has been a hero of mine for many years.

Way back in the 80’s, he sued on behalf of an owner in foreclosure who’d been mistreated and forever ensured foreclosure trustees in Washington State play fair.

After Cox v. Helenius, there was no question that foreclosure trustees owed fiduciary duties to both lender and borrower.

David Leen, no doubt, is a good guy and, apparently, a foreclosure rescue scam artist (no, not really).

Misleading Website?

David, it seems, has a website, as do many attorneys in this state.

I’ve reviewed his site and note one damning inequity shines above all: Leen represents himself to the property owners as an expert who will use his superior knowledge of foreclosure and real estate to help the property owner during their ‘difficult time.’

Unconscionability, if not outright fraud, should be presumed in these instances because Leen and his associates so obviously misrepresent their intentions to the property owners by asserting that they are going to help them out while instead helping themselves to enormous profits to the substantial detriment of property owners.

The Help Word

Mr. Leen misleads by mentioning “help” no less than four times on his website, and as you know your office makes it clear you can’t both help and charge for your foreclosure rescue services.

As such, according to AAG David Huey, there can be no other conclusion . . . it’s a scam.

“You gotta help or make money,” Huey says. “If you’re in it to make money, then you shouldn’t be telling people that you’re gonna help them because our experience is they don’t get help in this type of transaction.” — The Seattle Weekly

I’m sure everyone visiting Mr. Leen’s site assumes he stops foreclosure out of the goodness of his heart and his services are provided at no charge, especially since he makes no mention of costs or fees.

Imagine the hundreds of thousands of dollars, if not millions, he’s taken from deceived homeowners faced with the loss of their homes (again, no, not really).

More “Help” Words

Here’s a couple of the deceptive passages on his site . . .

At Leen & O’Sullivan, PLLC, we will make every effort to help you keep your home and get you back on the track toward financial recovery.

We will clearly explain all of your options and help you find a creative solution to stop foreclosure.

Think of the people who, believing they’d be rescued from foreclosure at no cost, hired Mr. Leen to represent them and were subsequently forced to pay thousands of dollars for his services, becoming victims of his foreclosure rescue scheme in the process (again, no, not really).

Other perps

I was shocked to learn Mr. Leen and his associates aren’t the only Washington attorneys with deceptive websites (again, no, not really). Here are just a few I quickly located who are using the “help” ruse:

At the Law Office of Jason Anderson in Seattle, Washington, we are committed to helping our clients avoid foreclosure and holding mortgage companies accountable. Attorney Jason E. Anderson

Are you worried that the bank might foreclose on your home? . . . Don’t worry, I can help.Attorney David Fuller

Contact a Seattle real estate litigation attorney to learn how we can help protect your interests in any real estate dispute.Barrett & Gilman
Attorneys at Law

If you need expert help with a real estate matter in Seattle, Washington, please contact William Snell for a personal consultation regarding your situation. Attorney William N. Snell

Let’s get ‘em

I’m glad you’re on to them now because they’re doing exactly what your office has been warning us about . . .

AAG David W. Huey

They’re trying to make money off someone’s foreclosure.
AAG David W. Huey

Maybe it’s time we round up these scammers and spend a million dollars suing each and every one of them to end the “outright fraud” in which they are so obviously engaged (again, no, not really).

Help AND get paid . . . sheeez!

In the arena,

Joe Kaiser

You may recall my post earlier this month when I suggested . . .

The next thing you will do is attempt to distance yourself from this ridiculous new foreclosure law, and you’ll do that by saying the bill as passed wasn’t the bill you’d intended.

You’ll say it got hijacked in committee and the folks who got in there and screwed it up are to blame, not you.

And you’ll be pointing the finger at Brian Weinstein to name just one. — June 2, 2008 Pushed to Shove.com
HB 2791 – What Happens Next?

New HB 2971 Article

Today’s Spokesmans Review has an article about the new law, and it’s not what you’d call favorable. But of interest to me are David Huey’s comments.

Here’s part of the article . . .

The Washington attorney general’s office, which proposed the legislation to protect consumers but watched as it was amended, says the law is unnecessarily broad. The office will advocate during the next legislative session to exempt Realtors, and likely won’t enforce the law against real estate agents except for “substantive” violations, said Assistant Attorney General David Huey.

While the original shorter version of the bill passed the House unedited, it was amended in the Senate to include the concept of foreclosure consultants.

So close.

The leaseback deal

It continues . . .

Huey drafted what became House Bill 2791 at the request of Attorney General Rob McKenna. It was intended to strictly regulate “distressed home conveyances” – when an owner relinquishes control of a home under the premise he or she can stay in the property and lease it with an option to buy or receive a portion of sale proceeds. About 18 states have similar protections, he said.

Such schemes might let the owner keep a house for six months or a year, but owners typically lose, Huey said.

Seduced

And the article continues . . .

It is a particularly seductive representation to tell somebody who’s facing foreclosure that you’re going to save them, that you’re going to keep them in that house,” Huey said. “For these transactions to turn out economically positive for both parties is just so difficult as to be beyond probability.— SpokesmanReview.com Article
June 12, 2008

Come again, Dave?

For these transactions to turn out economically positive for both parties is just so difficult as to be beyond probability.AAG David W. Huey

Did he really just say that, Rob?

Improbable

As Dave suggests, it is difficult to create the sort of foreclosure transactions that “turn out positive for both parties.” Inordinately difficult, (and best left to the pros).

But beyond probability?

We did something like 30 of them . . . and have a couple dozen going right now. An unbiased observer would look at our track record and conclude pretty much 100% of our partnership deals turned out as planned . . .

Owners are all still in their homes, they’re all happy, satisfied, and they have more equity today than when we saved them from foreclosure.

Beyond probability?

We made it happen virtually every time we got involved.

Nothing Personal, Dave

So, Rob, having pulled off what even Dave confirms is a near impossibility (dozens of successful foreclosure rescues), your office has sued me, calling these transactions foreclosure rescue scams.

Huh?

After all these years you still can’t appreciate the art and beauty of the foreclosure rescue deals we do?

Good grief.

In the arena,

Joe Kaiser

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

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

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

Your guy David Huey is in the press again, this time demonstrating what little he knows about the foreclosure business . . .

AAG David W. Huey

You gotta help or make money . . .— AAG David W. Huey
Sold Out
Seattle Weekly.com

It’s an either/or thing?

the “or” word

I thought I recalled seeing David Huey’s salary posted on some Washington State Employee Salaries website, but I must have been mistaken.

Somehow, though, I don’t think he’s leaving the office without picking up a check, and I’m wondering how that fits with his “either/or” philosophy of making money or providing help.

Royally screwed

My attorney just sent me another bill, the bastard. I thought he was here to help. I guess not.

I didn’t realize attorneys weren’t allowed to both help and get paid for providing their services. Should I file a bar complaint or perhaps a consumer protection complaint with your office?

If help may only be provided freely, then I’ve been getting royally screwed for years.

Help or make money?

Or, as I suspect, does the Huey rule only apply to real estate investors working the foreclosure market?

And as an investor, am I really barred from providing help and getting paid for doing so?

Apparently so . . .

“You gotta help or make money,” Huey says. “If you’re in it to make money, then you shouldn’t be telling people that you’re gonna help them because our experience is they don’t get help in this type of transaction.” — The Seattle Weekly

Nonsense, and more huey.

Extraordinary value

I’ve belabored the point long enough, in part, because it’s so ludicrous. But, that doesn’t stop Assistant Attorney General David Huey. The article continues . . .

The underlying problem, Huey says, is the purchaser’s philosophy: They’re trying to make money off someone’s foreclosure.

Trying to make money off someone’s foreclosure?

Can he possibly be this obtuse?

I provide a service. It’s a “for pay” service. It’s a helpful service. People in foreclosure find my service to be an extraordinary value and gladly put me to work.

They have a big problem – they’re about to lose their home to foreclosure. I have an equally big solution – I can save their home from foreclosure.

See the possibilities?

Twisted

Suggesting I’m trying to make money off someone’s foreclosure, as if that’s a bad thing, is nothing different than suggesting your office is trying to make money off consumers’ problems.

Or divorce attorneys are making money off failed marriages or bankruptcy attorneys are making money off people in dire financial straits.

Only someone with a completely twisted view of the foreclosure business would suggest saving someone’s home is not a valuable service for which investors should be compensated.

Either/or?

David couldn’t possibly be more confused.

Gratis, not

Yes, I know this is news to David, but I can, in fact, both help and get paid for providing a service.

Telling people I can help doesn’t mean I don’t expect to be paid. Sending letters saying I can stop foreclosure doesn’t presuppose I’m willing to do so gratis or out of my own pocket.

And by the way, suggesting, as your office has, that people assume our services are free because we’re offering help is just as ridiculous. I’ve done hundreds of deals with people in foreclosure and I can’t think of a single person who at any time believed my services didn’t come at a price.

Who do you know, in a million years, would assume I’m there on his porch to do anything other than make a profit?

No one, obviously.

People aren’t stupid, Rob, and I wish your office would stop characterizing them as such.

Distorted reality

It’s not an either/or proposition, Rob. Would you mind letting David know?

David has yet again exposed the distorted, “investors: bad,” reality your staffers bring to the table. Clearly, they just don’t get it and they don’t because they don’t want to get it.

If they did, they’d have to admit their “either/or” contention is pure huey and nothing but.

In the arena,

Joe Kaiser

We foreclosure investors have one simple rule we absolutely cannot break. It’s so important to those of us serious about the foreclosure business we consider it nothing short of sacred.

It’s our “golden rule,” and it goes like this . . .

Don’t f*ck it up!— The Foreclosure Golden Rule

While there are lots of other rules investors must follow to insure their success, this one is head and shoulders about all others.

Why?

Investors know that when dealing in foreclosures, you f*ck it up and someone loses a home.

There are consequences

AAG David Huey recalls when Hector and his wife were at foreclosure’s doorstep in December, 2006, and how she called to ask your staff to get out of our way so I could save their home.

David and former AAG Cheryl Kringle and their supervisor all decided Hector’s family was better off losing the home and refused to help.

In doing so, your staff broke the golden rule. They f*cked it up, and someone almost lost their home (almost being the key word here . . . put it on my tab).

There are consequences

The Golden Rule is based on the principle of “cause and effect.”

What your office does has consequences, and doing anything to the foreclosure ecosystem where homes are in the balance must be carefully considered before being acted upon.

HB2791 is anything but “carefuly considered.”

This isn’t something we can afford to have your office get wrong, Rob. You do, and people lose their homes.

The at risk owner

As an investor, it’s vital I’m able to help save homes from foreclosure, especially when the sale is only a day or two away. But, with the passage of HB2791, I’d have to tell the owner my hands are tied.

Here’s how that conversation goes . . .

Me: I’m sorry, but the new foreclosure law the Office of the Washington State Attorney General created says I can’t help you and you’ll probably have to lose your home to foreclosure.

He: What? I have to lose my home? No way, have plenty of equity.

Me: I know you do, and I’d love to be able to partner up, pay off the foreclosure, and together you and I co-own the property so your family can stay.

He: Well, that sounds good to me, let’s do it.

Me: Here’s the problem. According to the new law, I have to pay you 82% of its value once the dust settles.

He: But I’m not asking you to pay that much. Heck, if you’re willing to let me stay, I’d take half and call it good.

Me: Doesn’t matter, the law says I have no choice.

He: But don’t I have some say in what works for me?

Me: Not in this state you don’t.

He: You know, with the current market, the declining values, and typical closing costs and commissions, I don’t think I’d net 82% if I list it and get a full price offer.

Me: I don’t think the AG’s office thought that deep on it, and I’m guessing math isn’t their strong suit, anyway.

He: Okay, if we can figure out a fair price, can we do a deal?

Me: Maybe, we’d have to get the property appraised first.

He: But we don’t need an appraisal. We know it’s got plenty of equity!

Me: Yeah, I’m sure it does, but it’s now a requirement.

He: There’s no time for that sort of thing. I have till 4:30 tomorrow to get this thing paid.

Me: We’d better hustle then.

He: Okay, I can get it appraised. I know a guy who owes me a favor and I’ll have an appraisal in my hands by noon tomorrow. Can you loan me the $425 he charges?

Me: Sorry, but the new law forbids me to give you any money in advance as an inducement to get you to take my deal.

He: But I’m not asking for an inducement, I’m asking for a loan so I can pay the appraiser.

Me: In court they’ll call that an inducement, I promise you.

He: Never mind, I’ll figure something out and get it done.

Me: Great, that’s a good start. Now, I’ll need to get you qualified and check your credit, bill paying history, assets, debts, and your current income. Just to be on the safe side, I should probably get a couple year’s worth of tax returns, too.

He: WFT for?!?!? I’m not asking you for a loan. I’m selling you my property.

Me: Again, it’s the new law. It says if you’re going to stay and rent the place or possibly buy it back from me down the road, I have to first prove you can afford it.

He: But I’m in foreclosure now. I have no credit and my debts are out of this world.

Me: So, I guess you don’t qualify, huh?

He: No, no, no. With this new job I’m back on my feet. In another year or two, tops, I’ll be looking good. I’ve got an idea . . . how about I just write you a letter that states I can afford to pay whatever we agree to.

Me: Sorry, the law says we can’t do that. It says if I haven’t checked you out using the actual documents needed to do a legitimate qualification, I’ve broken the law.

He: Well, that’s great if we had the time, but we don’t. I lose my home tomorrow!

Me: Like I said, we’d better hustle. Get me what you can, we’ll do our best, I guess.

He: Geez! This is nuts. Anything else I need to know?

Me: Yeah, we’ll have to open escrow, and now.

He: Can’t I just give you a deed and we go down and record it? That’ll save us time and escrow fees.

Me: No, unfortunately, with the new law I can’t accept a deed from you. “Kitchen table” closing aren’t possible any more, even if it’s the only way to save your home.

He: That’s the craziest thing I’ve ever heard.

Me: Don’t sweat it. I have an escrow gal who can get it done quickly, maybe. I’ll set it up for noon tomorrow since we only have the afternoon.

He: Noon works for me, but I’ll need you to run a notary out to my job site because my crew is jammed up and I’ve got to be there all day.

Me: Ugh, small problem. The new law says you have to personally show up at the escrow office. Mobile notaries are no longer permitted.

He: What? Why the hell not?!?!?

Me: They’re afraid investors will close their own transactions and homeowners will get tricked into signing deeds when they think they’re signing loans.

He: Hasn’t that been a problem forever, anyway, and don’t they have the right to turn around and sue dishonest investors like that?

Me: Sure, I guess, but this law is supposed to curb that sort of transacting. I suspect dishonest investors, being dishonest investors, will just ignore the new law as they’ve ignored the old ones and keep right on doing what they’ve always done.

He: You’re right about that. Okay, I’ll get the appraisal done and my financials together as best I can. You get the paperwork put together and get escrow set up for noon. I’ll figure out a way to get away from the job and be there to sign, no matter what. I cannot lose my home!

Me: Just make sure your wife comes with you to sign.

He: Errrr, she’s been in California for the last week or so, helping out. Some sort of flu that’s knocked her mom off her feet. But, not to worry, I’ve got her power-of-attorney and will sign for her.

Me: Ugh, minor detail. The new law says powers-of-attorney may not be used to close foreclosure transactions.

He: You’re kidding, right?

Me: Hey, we’re the government and we’re here to protect you.

He: I can’t use a valid power-of-attorney and now I lose my home?

Me: What can I say?

He: Could we email the docs to her today? That way, she’d be able to overnight the originals back and we’d have them in the morning.

Me: Makes sense to me. Unfortunately, the new law doesn’t allow for that. She has to be physically present at the closing. No exceptions allowed.

He: Screw all of this! Let’s just meet at my attorney’s office tomorrow and let him take care of it. I don’t need the new law looking out for me. I’ll have my attorney put together a waiver that says you and I are free to deal directly and we’ll get it done that way.

Me: That sounds good, but it’s not possible. The new law says you’re not free to opt out of it, even if you and your attorney say you want to. It’s what they call a “violation of public policy.” Apparently, that’s more important than you being able to save your home.

He: This can’t be happening, Joe. You cannot be serious about all this new law stuff.

Me: I kid you not.

He: So, since my wife isn’t here to sign and since the law won’t let me use her power-of-attorney, and since even my lawyer can’t get me out of this, we’re sunk?

Me: Pretty much screwed.

He: Joe, on my word, I promise if you do this deal for me and save our home, I won’t turn around and sue you, no matter what, and I’ll put that in writing.

Me: We do this deal and you put that in writing and when it hits the fan and some rescue-rescue attorney shows up, she’ll be asking for triple damages as well as the $100k bonus damages the new law gives you, and that agreement becomes “bad faith” Exhibit A.

He: This is crazy . . . I just want to save my home . . . I have plenty of equity . . . and now because of this stupid law I can’t?

Me: I’m sorry, but no, you can’t. The Office of the Washington State Attorney General has made certain of that. But, if it makes you feel any better, they’re convinced it’s for your own good.

He: Gee, I feel much better now knowing they’re looking out for me. Hey, isn’t there some kind of federal law that prevents them from doing this to me?

Me: Yeah, it’s called the Constitution.

Cause and effect

Causes?

• Requiring an arbitrary “82% of value” purchase price in any market, much less one as uncertain as the current market, means you’ve f*cked it up.
• Requiring an expensive, time-wasting appraisal where none is otherwise needed means you’ve f*cked it up.
• Requiring the owner to be proven creditworthy where it is impossible to make such a determination that satisfies any meaningful criteria means you’ve f*cked it up.
• Requiring a costly, slow escrow process and not allowing fast, efficient kitchen table closings or mobile notary signings, even when there’s no viable alternative, means you’ve f*cked it up.
• Requiring owners to physically attend closings and not allowing them to use email or overnight mail or faxes or whatever else to take care of the signing means you’ve f*cked it up.
• Banning the use of valid powers-of-attorney, especially when no other manner will suffice, means you’ve f*cked it up.

Effect?

This new law gets in the way of people trying to save their homes. With foreclosure bearing down, the last thing they need is a law that makes the task of saving their home that much more difficult.

Does Washington State really need a law that says people in foreclosure lose their right to freely contract?

No, it does not.

Yet that’s exactly what you’ve done. You haven’t helped these people at all. You haven’t protected them or saved their equity. In reality, all you’ve done is strip them of their rights.

And the effect?

Someone loses a home. No, make that thousands of someones lose their homes.

Minnesota 2.0

You don’t casually lob mortar shells into the foreclosure ecosystem and hope that’ll somehow fix the problem (which, frankly, I remain unconvinced is a problem).

Before making any changes, the foreclosure system should be looked at with careful consideration. The dynamics that come into play should be thoroughly understood before taking even a single step forward.

Any changes impacting that ecosystem should then be applied thoughtfully and deftly, with only the lightest possible touches. These changes, once engaged, should be regularly reviewed to confirm the law is effective and is delivering the hoped for results.

Or, you could do what your office did and just drop a big bomb on it.

These draconian, anti-investor measures will have a huge impact on folks in foreclosure who no longer are free to contract. They will pay the price of your office’s ill-conceived rush to get a foreclosure law with your name on it on the books.

Rob, your office broke the only rule that really matters in the foreclosure business, the golden rule . . . you f*cked it up.

In the arena,

Joe Kaiser

Looks like I missed Dave’s earlier comments regarding what he knows about the foreclosure rescue business and what it’s like to be in foreclosure.

I tend to disagree with much of it, but it’s close enough, I suppose, to let it go for now.

This sweet talking, nice guy comes to their door with, ah, ah, ah, what ah, sounds like a solution . . .— Assistant Attorney General David W. Huey
Tacoma, WA

Moi?

Will probably add a comment or two of my own here.

In the arena,

Joe Kaiser

I met with a fellow last week who’s a foreclosure rescue scam victim and is just days away from being evicted from his family’s home.

Of course, I told him to call your office immediately and see what you could do to help, letting him know this sort of thing is now a top priority within your firm.

He called, and someone from Consumer Protection listened to his story and then politely told him, “I’m sorry, but we can’t help you.”

Huh?

lip service

We can’t help you?

Good grief.

The office of the Attorney General of the State of Washington can’t help a family on the brink of losing their home to a scamster?

Rob, he’s a real, honest-to-goodness foreclosure rescue scam victim about to lose everything. Both he and his wife are disabled, as is a third member of their family.

They have no money, nowhere to go, were likely cheated out of their $150k equity, are about to be tossed out onto the street, and you can’t help them?

Whatever happened to . . .

We’ve sort of shifted our focus to foreclosure rescue fraud, because that’s where con artists can make a living.— AAG David Huey
He’s Got Your Back
The News Tribune.com

He’s got your back?

He ain’t got Randy’s back, that’s for sure.

Do the Hustle

I’ve sent him over to Melissa Hueslman in hopes she’ll be able to throw a monkey wrench into the eviction and keep them in their home for at least a little while longer or until things can get sorted out.

And if she can’t?

It won’t be pretty.

Time to get busy?

But then I had a crazy thought . . . do you think maybe it’s time the Real Estate Equalizer saves another homeowner in trouble?

You know, keeps them in their home when all hope is lost and when no one else, including the Office of the Washington State Attorney General, is willing to step forward to save the day?

Got a Problem? Odds against you? Call the Equalizer.— Robert McCall, The Equalizer (1985-1989)

Maybe I should help?

And if I do, will you now add this family to the list of people I’ve cheated?

Or maybe try to convince them they’ve been had once I do?

Whatever I can do, I will

I don’t know enough at the moment to guarantee I can help, but if anyone can, it’s me. You know, that “I am the Tiger Woods of foreclosure rescue” thing, and all?

In any case, whether I’m able to help or not, one thing is for certain: your office has failed him.

He can really use a hand and the best your office can do is tell him to go find an attorney?

And he should pay for this attorney with what?

I told him to give me a call if Melissa can’t help and I’ll do whatever I can to save his home.

And if I’m successful, it will be another foreclosure rescue for the books, done in spite of the Office of the Washington State Attorney General.

An actual complaint

So, yet again it becomes obvious that what’s going on here has nothing to do with consumer protection.

Because if it was, here is someone who should be helped. He’s called, he’s complained about the way he’s been scammed, and all your office did was tell him was to go away.

He’s a real victim, losing his real home to a real scam artist, and you’re not interested in helping?

Yet in my case, where no one was scammed, where no one complained, where no one lost his or her home, you’ve spent three years and hundreds of thousands of dollars of taxpayer funds to come after me?

What gives, Rob?

Disgorge This!

Could it have something to do with, I don’t know, the millions in overages you mistakenly believed we’d pocketed and your office’s “disgorgement of profits” agenda?

Or the fact your office is now entitled to keep unclaimed consumer restitution funds instead of turning them over to the state?

Here’s what I think . . .

Some little investor scamming a family here and there just isn’t a big enough payday to interest your office.

He’s not worth your time and trouble.

Nor, apparently, is helping Randy, the fellow who called and asked you to give his family a hand to prevent them from being cheated out of their home and tossed onto the street.

“I’m sorry, but we can’t help you?”

Good grief, Rob.

In the arena,

Joe Kaiser