Click here to view the press release that went out today.

In the arena,

Joe Kaiser

I’ve asked your friend Steven N. Oliver, Whatcom County Treasurer, for an apology.

You may remember he sent you that ridiculous email about us having cheated residents of his county.

Steven N. Oliver
Whatcom County Treasurer

He’s probably already provided you with a copy of my email, but just in case you didn’t get it, here’s one for your files.

Lies and half truths

My letter to the Whatcom County Treasurer . . .

Steve,

I’m done waiting for you and your public records “search.”

Your March, 2007 email to McKenna was 100% bogus. You knew it would validate and fuel the bogus investigation and future lawsuit his office brought against me. As such, it is malicious by definition.

You’ve provided me with records from two so-called “scam” deals to support your email, but it’s obvious there was nothing whatsoever inappropriate with either of those transactions (neither of which dealt with owners, btw).

The only other transaction we did in Whatcom County was the Arthur Villalon sale, a fellow we rescued (your office attempted to foreclose even after we’d paid his back taxes). He’s bought us out and that transaction, by any stretch of the imagination, could not be considered anything other than an absolute success for all concerned.

Please be advised you now have one opportunity to resolve this debacle without legal action.

Kindly provide a written apology, on Whatcom County letterhead, stating unequivocally that: (1) you were wrong, (2) the email you sent McKenna in March, 2007, was completely untrue, (3) no Whatcom County property owner was scammed in any deal in which I participated, and (4) you regret the harm your email has caused me.

I’ll expect it by the end of next week. Upon receipt and confirmation it comports with the above, this matter will be considered resolved and no further action will be taken (although I will not soon forget it).

If you decline to provide an apology, you can be 100% certain a defamation case is filed against Whatcom County and you, personally, wherein I will seek no less than $1,000,000.00 for your reckless behavior and the grief it has caused me.

I’m advised this is a classic case of defamation, that there is little doubt your actions were malicious, and that the evidence here is overwhelming. I tend to agree.

Please confirm receipt. Thank you.

Joe Kaiser

No more

Steve completely lied about me, and I’m done letting this sort of thing go unaddressed.

And come this Friday, if that apology isn’t on my desk, you can add one more to my lawsuits total.

In the arena,

Joe Kaiser

Does the truth actually matter?

We’ve seen how, time and again, AAG Jim Sugarman just makes up whatever he deems appropriate, and if that means lying about me or his involvment in the foreclosure rescue law debacle, well, not a problem.

I suggest the truth does matters. Radical, I know, but still. Which brings me to Steve Oliver, Whatcom County Treasurer.

Steven N. Oliver
Whatcom County Treasurer

Seems like a nice fella.

The email

Your office issued it’s slanderous press release about me back in March, 2007, describing with incredible inaccuracy what had taken place, and Whatcom County Treasurer (then Chief Deputy Treasurer) Steve Oliver saw fit to send you this email . . .

Dear Mr. McKenna,

I saw the report about foreclosure rescue scam operators on KOMO yesterday and wanted to take a brief moment to personally thank you and your staff for pursuing some of the most predatory foreclosure rescue operators in this state.

I know many county treasurers across the state have voiced strong concern over these types of practices since you took office and I greatly appreciate your actions and follow through. Having had direct experience with Kaiser, and Fiscal Dynamics, I have seen first hand how they have taken advantage of local property owners in Whatcom County through lies, half truths, and worse. We work very hard in our office to inform property owners of the foreclosure process and their rights under state foreclosure statute so that they can make informed decisions in their best interest. As the Chief Deputy Treasurer and a Ferndale City councilperson, I comment your office for your work to continue to protect Washington consumers. Thank you.

-Steve Oliver
Chief Deputy Treasurer
Whatcome County Treasurer’s Office

WTF?

Now, nothing surprises me anymore regarding this case, and whenever a public record request results in a document like this turning up, I’m pretty much numb to it.

But this one bothered me, and so I called Steve to ask him about it. It was one of those WTF? calls where Steve, after hearing me suggest his email was 100% untrue, said he knew how I must feel. Uh, no, he doesn’t.

And so I requested the public record from Steve so he could document he hadn’t simply made it all up.

Here’s my request . . .

Dear Mr. Steve Oliver,

On Friday, March 16, 2007, you sent AG Rob McKenna an email containing the following language:

Dear Mr. McKenna,

I saw the report about foreclosure rescue operators on KOMO yesterday and wanted to take a brief moment to personally thank you and your staff for pursuing some of the most predatory foreclosure rescue operators in the state.

I know many county treasurers across the state have voiced strong concern over these types of practices since you took office and I greatly appreciate your action and follow-through. Having direct experiences with Scamehorn, Kaiser and Fiscal Dynamics, I have seen first hand how they have taken advantage of local property owners in Whatcom County through lies, half truths and worse . . .”

The email continues, but the rest of it is unimportant for our purposes here today. Pursuant to the Public Records Act of the State of Washington, please provide:

1. Any and all records involving any “direct” or even indirect “experiences” you’ve had with Scamehorn, Kaiser, or Fiscal Dynamics, where any of them has, IN ANY WAY, “taken advantage of local property owners in Whatcom County through lies, half truths, and worse.”

2. Copies of any consumer complaints involving Scamehorn, Kaiser, or Fiscal Dynamics your office received from anyone with a property in tax foreclosure in Whatcom County.

3. Copies of any records that allow you to claim that Scamehorn, Kaiser, or Fiscal Dynamics are some of the most predatory foreclosure rescue operators in the state.

Finally, please confirm receipt of this email and advise, pursuant to the PRA, when these records will be available. I, of course, will be delighted to pay the appropriate costs for the production of these records.

Joe Kaiser
P. O. Box 64700
Tacoma, WA 98464

Public Records

So, what documents did Steve provide in response?

Few, would be putting it kindly.

There were, of course, no complaints, per item #2. And there was nothing regarding evidence we were “some of the most predatory foreclosure rescue operators in the state,” per item #3.

There were, however, documents involving two transactions from 2003 where we’d purchased notes from two different lien holders, and though we attempted to pay to stop the tax sale, the then treasurer Barbara Cory rejected our payment and foreclosed on the properties anyway.

We sued, lost, appealed and lost, and decided to just scratch our heads at the utter ridiculousness of the decision and move on.

In any case, there was never any claim we’d acted inappropriately in these transactions. We’d simply bought out two creditors, paid them in full, and attempted to pay taxes to protect our interest in the property.

How Steve could make the leap to us having “taken advantage of local property owners in Whatcom County through lies, half truths, and worse,” boggles the mind.

And, as I knew would happen, those are the only documents Whatcom County Treasurer Steve Oliver could provide us.

Here’s my response . . .

Steve Oliver,

Once again the absurdity of this comes to light.

Your “taken advantage of local property owners in Whatcom County through lies, half truths, and worse,” email to AG McKenna is absolute nonsense, as proven by your complete inability to document your claims (there could not have been any other result, btw).

You provided the public record for only the Amundson & Webb transactions where we bought liens from judgment creditors. There was nothing whatsoever inappropriate in having done so, as you well know.

Please explain how that is, in any way, an example of us having taking advantage of “property owners,” and further, please explain how that, in your mind, translated into us having lied to anyone.

Your email to McKenna was nothing short of reprehensible.

=Joe Kaiser

Charade

You know, Rob, at some point it would be nice for the truth to actually matter. County Treasurer Steve Oliver sending you a reckless, inflammatory and 100% untrue email having absolutely no basis in reality is just plain contemptible.

“Lies, half truths, and worse?”

Uh, Steve, that description certainly applies here, but only to you my friend . . . only to you.

In the arena,

Joe Kaiser

You’re upset John Ladenburg didn’t do his homework?

And, that he issued a press release about you and your work as Attorney General that isn’t particularly flattering?

I am surprised he failed to do any research before launching these baseless attacks. — Attorney General Rob McKenna
Discussing John Ladenburg’s announcement he
intends to run for the office of Attorney General

Well, join the crowd.

Error Filled

You called it an “error-filled press release consisting primarily of ad hominem attacks.”

Ad hominem?

ad hominem |ˈad ˈhämənəm|
adverb & adjective
1 (of an argument or reaction) arising from or appealing to the emotions and not reason or logic.
• attacking an opponent’s motives or character rather than the policy or position they maintain : vicious ad hominem attacks.
2 relating to or associated with a particular person : [as adv. ] the office was created ad hominem for Fenton. | [as adj. ] an ad hominem response.
ORIGIN late 16th cent.: Latin, literally ‘to the person.’ — The Dictionary

Hello?

Rebut This

So, error-filled, ad hominemized press releases bother you?

Imagine that.

Apparently, they don’t bother you when your office issues them – March 14, 2007 Press Release.

Rebut This

In your spirit and style, Rob, I give you this . . .

IT’S OFFICIAL: ROB MCKENNA DOESN’T FACT CHECK

Here is the list of problems in the “error-filled press release consisting primarily of ad hominem attacks” YOU issued about me:

1. The Headline

MCKENNA CLAIM: Attorney General McKenna Sues, Settles with Real Estate Investors for Mortgage Foreclosure “Rescue” Violations

REALITY: “Mortgage Foreclosure?” We are tax sale investors and are not even involved with “mortgage” foreclosures. Are you telling me you can’t even get the headline right? I suggest it matters. You’re trying to pigeon hole us in with what little your office understands about foreclosure rescue scams, and we don’t fit.

2. The Big Lie

MCKENNA CLAIM: “They told property owners that they would solve their foreclosure problems. But often, their real intent was to let the property go to auction and take any excess proceeds from the sale – money that would have gone to the property owner if the defendants hadn’t “helped” them.”

REALITY: Anyone we said we’d “rescue,” we rescued. You’re confused here, Rob. Some properties we simply bought outright. These aren’t “rescues” at all. They are properties we own and could do anything with them, including keeping them in the tax sale.

3. Number of People Involved

MCKENNA CLAIM: “. . . Based on the current information, more than 100 consumers may be entitled to received restitution”

REALITY: The total number of transactions involving overage plays (sellers your office deems are entitled to restitution) was eight. Eight, btw, is not 100, even in your world, Rob.

4. Our Negotiating Tactics

MCKENNA CLAIM: ” . . . the defendant told property owners they would pay off the delinquent taxes so that foreclosure could be avoided.”

REALITY: Rob, you’re again confused. We in fact paid taxes and stopped foreclosure on any properties where we partnered up with owners in what the AG is calling a “rescue.” No one disputes this.

We did NOT pay the taxes or stop foreclosure on some properties we bought outright. Instead, as owners with no further obligation to the sellers, we decided to sell those properties at auction, the tax sale, as is our right.

5. Price Paid

MCKENNA CLAIM: “They offered property owners money, sometimes as little as $200, in exchange for the transfer of a title or interest in the property.”

REALITY: We made offers. Those offers were based on many factors, including the property, the seller’s equity, the sellers wants, etc. If the seller accepted (and most did), we purchased their property and paid them, in full. Nothing whatsoever unfair or remarkable about it.

Since in some cases $200 was even too much and we lost money, what is your point, Rob? If it was to demonstrate your office is incapable of determining value or equity, you’ve accomplished that. If it was merely to mislead people into thinking we were paying less than what was fair, you’ve accomplished that as well.

6. Receive Nothing

MCKENNA CLAIM: “Property owners were sometimes told that if they did not take the fee, they would receive no money after the foreclosure sale.”

REALITY: Rob is referring to a letter we sent to creditors who get wiped out at the sale and receive nothing. At no time did we offer a “fee” or tell owners they would receive nothing.

Again, Rob has no clue what we do and assumes everything foreclosure investors think, say, write, or do is somehow a scam. It’s not. And since Rob and his staff never bothered to ask, they assumed, incorrectly, the letter stating “nothing” is sent to owners. It’s not.

7. Overage

MCKENNA CLAIM: “After taxes are paid from the sale price, there may be substantial money left over. State law says that such a surplus rightly belongs to the person who owner the property.

REALITY: Any properties we let go to sale, in an overage play situation, were properties we owned and as such, were entitled to profit from. 84.64.080 in no way gives our profits to the former owner.

8. Inundated with Paperwork

MCKENNA CLAIM: “Huey said property owners who agreed to received “help” from the defendants were inundated with paperwork . . .”

REALITY: We have always used the absolute minimum of paperwork. We’d prefer to use a deed and little else, but county treasurers have made doing so impossible. In order to fully document our transaction so dishonest sellers don’t attempt to unwind it later, we have no choice but to require disclosures and acknowledgments.

9. Control of the Property

MCKENNA CLAIM: “In other situations, the property was placed in a trust and the defendants acted as trustees. Most property owners believed they still owned the the property, but the defendants actually had control.”

REALITY: By agreement, sellers put properties in land trusts and assigned us a beneficial interest, 25% – 50% typically. As trustees, we have control, a requirement in order for us to get involved. Sellers prefer us in control since when the property was in their control, they brought it to the brink of foreclosure. With control, we can now handle all the issues that come up (and there are plenty).

10. Timing of Signing

MCKENNA CLAIM: “the Attorney General’s suit also alleged documents used for these details (sic) were signed days, or even hours, before the pending foreclosure auction.

REALITY: A common occurrence in foreclosure investing, known to everyone but the AG, apparently, is sellers calling with little time to spare. Getting deals done quickly is a skill, not a scam.

11. Notarizing Documents

MCKENNA CLAIM: ” . . . the defendants sometimes notarized documents themselves.”

REALITY: There is no problem notarizing anyone’s signature other than your own, even in transactions where the notary is a party to that transaction. If it’s perfectly legal to do so, why mention it as though it’s somehow evidence of a scam? It’s not. We’re all notaries. We have to be to be effective, given the time constraints we deal with.

Ad Hominemized

Rob, don’t you just hate it when some clown issues a press release so error-filled and ad hominemized you wonder what he was smoking when he wrote it?

Well, me too.

But you know what’s worse?

It’s when that arrogant clown KNOWS his press release is error-filled and fails to do anything about it other than attempt to optimize it.

Then, it becomes malicious. Then, qualified immunity comes into play.

In the arena,

Joe Kaiser

P.S. I’ve read Ladenburg’s release . . . you got off easy.

As real estate investors dealing in foreclosures, it’s important we get all our ducks in a row because we know if we don’t, some sellers will lie.

Whenever the stakes are more than a few bucks, sellers who praised us for the help we gave them when they needed it most sometimes turn around and say they were cheated.

Or lied to.

Or didn’t understand.

Or whatever.

And their attorneys have them sign legal affidavits or declarations we all know are filled with lies, but they figure it’s okay. After all, they are dealing with foreclosure investors.

Blame Us, Amos in the House

This was discussed in my post, The Blame Us, Amos Effect. And though I have no real understanding of the psychology behind it, I know it happens.

I received just such an affidavit last week in a case where we’re suing to collect overage funds we’re due. We bought this couple’s property, having sat down with them and negotiated a deal we all deemed fair.

There was no deception or lies or anything close to that. It was a simple transaction where a price was agreed upon and paid in full.

Done deal.

THE BIG @$^*%!* LIE

Except, it’s not done. Today, she says we lied to her.

She’s told THE BIG @$^*%!* LIE.

I hate BIG @$^*%!* LIES.

Foreclosure investors stand there and tell the truth about what took place, and then watch sellers lie through their teeth because they know they can get away with it.

They figure we’re bad guys anyway and lying isn’t such a big deal, really, because hey, we probably deserve it. Investors get that.

Reality is fairly simple in this game. The ugly but indisputable truth is that there are people who will not hesitate to lie whenever it suits them or furthers their cause.

And when pushed to shove they’ll tell THE BIG @$^*%!* LIE.

Get Joe, Inc.

Speaking of which, here’s one such BIG @$^*%!* LIE . . .

They told property owners that they would solve their foreclosure problems. But often, their real intent was to let the property go to auction and take any excess proceeds from the sale – money that would have gone to the property owner if the defendants hadn’t ‘helped’ them.— Attorney General Robert McKenna
March 14, 2007 Press Release

When you tell that lie, Rob, the only thing anyone reading it can possibly take away is . . .

1. Joe Kaiser told owners in foreclosure he’d save them, even though he had no intention of doing so.




2. Instead of stopping their foreclosures as promised, he intentionally let their properties get foreclosed on,
   costing the owners their homes.




3. After letting them go to foreclosure, he stole the proceeds that rightfully should have gone to the owners, leaving them penniless and on the street.

I just have one question, Rob . . .

Are you people over there at Get Joe, Inc. COMPLETELY OUT OF YOUR MINDS?

Or, have we yet again demonstrated just how out-of-control your staff has acted and how malicious that press release really is?

The Actual Truth is a bit Different

THE BIG @$^*%!* TRUTH, for anyone interested, is . . .

1. Anyone whose home I promised to save from foreclosure, I saved. The odds are better than 12 to 1 that each owner at this exact moment is sitting in his or her home, probably eating Nacho-flavored Doritos™.




2. Yes, I intentionally let properties go to tax sales. In every case, it was my right to do so. These were ALL properties where letting them go to sale was the plan. These were not properties I was “rescuing” for anyone in foreclosure.

   More often than not, these were junk lots I’d bought from sellers walking away. They’d been paid in full and had no further interest in the properties.




3. Any overage profits created at the tax sale are profits I created.

   The law DOES NOT say the former owners is somehow magically re-vested with the right to profit at the tax sale. The law IS NOT and NEVER WAS intended to do such a thing (and could not even if so intended).

   Its purpose as we all know is to facilitate the escheatment of funds to county treasurers (Operation: Who’s Escheating Who) by stripping away the interests of the rightful owners of those funds: creditors with liens on those properties.

Confusion Reigns

What your office has done, intentionally or out of sheer ignorance, is somehow combined mutually exclusive investment strategies and wrongly assigned characteristics of each to the other.

It don’t work that way, Rob.

Again . . .

If I agreed to rescue someone, he was rescued.

And if I agreed to buy someone’s property instead, I paid him for it and did whatever I deemed appropriate thereafter, Yes, even letting it go to foreclosure sale sometimes. They were my own properties and the last time I checked, I am free to do whatever I want with them.

I do not do the “RESCUE” thing and the “LET GO TO SALE” thing with the same property. They are two completely different strategies having NOTHING TO DO WITH EACH OTHER.

The Story You Tell is a Lie

It’s contemptible what you’ve done here, Rob.

You’ve told THE BIG @$^*%!* LIE and have led people to believe that I was out scamming desperate homeowners, promising them I’d save their homes and instead allowing those homes to be lost at foreclosure sales, stealing all their equity and putting them out on the street in the process.

And that’s horrific.

I took great pride in helping people save their homes (which I did). Or in giving them a few bucks for their junker property and guaranteeing them their profits (which I also did).

And what did you do?

You told THE BIG @$^*%!* LIE , Rob, and in doing so proclaimed to the world that I am a monster.

Don’t believe me?

Check it out for yourself by Googling my name.

Wait, let me check . . .

@$^* me.

In the arena,

Joe Kaiser

I’ve been told time and time again that I need to make sure I don’t let this blog get out of hand by making things personal.

And while that’s solid advice, I’ve got to tell you, it isn’t easy, particularly when I discover what you’re up to . . .

I find it remarkable.

Malicious Optimization

Clicking the image above takes you to the exploded view and is much more readable, but here’s the text itself . . .

Cheryl called last week and reminded me that we should use both Joe and Joseph in our press re: Kaiser so that when people google his name, our complaint/press will come up. I’ve googled his name both ways and it’s odd, but nothing about our case comes up.

Kristen, do you know if we have a link to our complaint on our website, would Kaiser’s name come up in a google search?— Renee Shadel

It’s apparent among Cheryl “No Complaints, No Problem” Kringle and Renee “Just Walk Away” Shadel, at least, it is personal.

Why else would they be so determined my name attaches to your office’s bogus press release?

Malicious Optimization

Kristen Alexander responds to Renee’s email with a possible explanation . . .

Here’s that text . . .

Google probably hasn’t crawled that page or our site yet. I will add both names to the meta tags.— Kristin Alexander
Public Information Officer

So, Kristin goes about the process of Search Engine Optimization to make sure your press release pops up any time someone Googles my name.

Lovely.

Malicious Optimization

Apparently, that wasn’t good enough because minutes later, Renee responds . . .

And that text looks like this . . .

When we searched today with Joe Kaiser and Joseph Kaiser, the press release did not come up. Kim put in “Joseph Kaiser” investor and it came up. Were both of his names added? Can you think of anything else we can do so when a consumer types in Joe Kaiser, our press release comes up?— Renee Shadel

Huh?

“Can you think of anything else we can do so when a consumer types in Joe Kaiser, our press release comes up?”

I’m just glad it’s not anything personal, Rob.

Malicious Optimization

You posted a press release you know is so error-filled that when I pointed out its many defects you rushed to modify it and finally, take it down like it never happened.

It happened, and that’s bad enough.

But when you put it back up once you’d realized taking it down confirmed your culpability, you showed the world that the facts don’t matter and your office will do or say whatever it wants to make its case.

And that is disgusting.

Malicious Optimization

Wait . . . it gets better, because now it’s not just libelous. Heck no. Now it’s been optimized for vilification purposes as well.

Now consumers can more easily discover the Office of the Washington State Attorney General’s scandalous statements about me stealing homes from people in foreclosure. Statements you know, with absolute certainty, are completely untrue.

I’m no attorney, Rob, but that’s the textbook definition of libel.

Personal?

You’d better believe it is.

In the arena,

Joe Kaiser

The information I requested last week from county treasurers under the Public Records Act is beginning to trickle in.

So far, with less than a quarter of the counties reporting, we’re up to about 50 overages that went unclaimed and were irrevocably transferred to county treasurers.

“Five-O”.

A little low

That’s about where I’d guessed we’d be, maybe a little low (but close enough at this stage). A lot of the bigger counties have yet to provide any information, so perhaps they will bump it up a bit.

Now, I’m wondering if it’s beginning to sink in?

To date, 50 instances of counties receiving windfalls, essentially free money, simply because the rightful owners of those funds failed to claim them.

Upon Application

Your office alleges that the people with whom I did do business would have been better off had I never contacted them . . .

. . . their real intent was to let the property go to auction and take any excess proceeds from the sale – money that would have gone to the property owner if the defendants hadn’t ‘helped’ them.— AG Robert M. McKenna
March 14th, 2007 AG press release

What about the 50 who never showed up to claim their funds? Are they better off, too, with me not having “helped?”

forever lost

When I work an overage play with someone who’s long since walked away, he’s guaranteed a profit.

To make that happen, I had to find him. Had I not, there’s a real possibility he’s now #51 on my list of folks who never knew their overage funds existed and never showed up to claim them.

Instead, his funds are forever lost to the county.

Questions and more questions

So, my questions . . .

How can you possibly know who’s going to show up and who isn’t?

And in light of that, my follow-up questions . . .

How can you say folks who sold me their properties would have been better off had they not?

Or is your office willing to (1) guarantee an overage will be created and if so, will you also (2) guarantee county treasurers will do whatever it takes to find them to (3) guarnantee they’ll let them know their funds are waiting to be picked up?

My PRA request info would seem to indicate, no, no, and no, respectively.

Which brings us to my last questions . . .

Rob, of the 50 folks whose funds went unclaimed, do you suppose selling their properties to me would have been a better solution than the $0.00 they ultimately received when the overage clock ran out?

Or, was the alternative (not selling to me) simply a better solution for the county?

The unfound

Windfall profits land in the laps of counties when rightful owners of overage funds don’t know they exist and fail to claim them. So far, my list is up to 50.

Since I track down these kinds of owners and buy their properties, unclaimed overage funds in their situations can’t happen, making it more and more difficult to grow that list to 51 folks who didn’t get their funds.

And more to the point, 51 instances where the county, did.

This is a turf war.

Joe Kaiser

I don’t know if you heard the news, but foreclosures in King County were up 64% in August, compared to the same month in 2006.

In Pierce County alone there were some 300 foreclosures filed last month.

Seems like it’s a good time to be in the foreclosure rescue business.

a big difference

Of course, we’re talking about “trustee’s sales,” not tax foreclosures, and there’s a difference.

I don’t think you get that.

In fact, I’m almost sure you don’t and that’s part of the problem. There’s a big difference between the two, Rob.

Huge Benefits

When you agree to buy someone’s home in a mortgage foreclosure situation (trustee’s sale here in Washington), you’re obligated to do certain things.

And #1 on the list?

Stop foreclosure.

That means bringing the loan current or paying it off outright. Clearing up the defaulted loan is just part of the deal and may be the reason the seller agreed to sell to you in the first place.

When you take care of his foreclosure as promised, the seller receives, at a minimum, the very real benefit of keeping “foreclosure” off his credit report.

There may be other benefits as well, and that’s a good thing.

Huge Problem

Of course, the exact opposite happens when you buy a home from someone in foreclosure and fail to cure his default. That causes the property to be foreclosed on, and you’ve damaged the seller in the process.

Not curing a defaulted loan and letting it go through foreclosure when you’ve promised it won’t creates a serious, long-term credit problem.

Worse, if it’s a mortgage foreclosure, it’s likely the seller now has a civil judgment against him and owes the lender a large amount of money for whatever shortfall is ultimately created.

And that’s not good.

benefits v. problems, we get it

It’s very simple . . .

In a mortgage foreclosure, stopping foreclosure provides benefits to the seller.

On the other hand, failing to stop foreclosure when you’ve promised to do so creates significant problems for him and is not something a legitimate investor would do.

That much we all get.

different animal

I’m not in the mortgage foreclosure business.

I work tax sales where 95% of the properties I see are free and clear (had there been a mortgage, the lender would have insisted the borrower pay the back taxes long ago).

Tax foreclosures are COMPLETELY DIFFERENT from mortgage foreclosures.

How?

In a tax foreclosure, paying the taxes and/or stopping foreclosure has ZERO IMPACT on the seller. Once he’s sold me his property, he’s 100% out of the picture.

Whatever I do with the property from that moment on does not affect him in any way, shape or form.

More to the point, NOT paying the delinquent property taxes has ZERO IMPACT on the seller.

None.

No such problems to solve

In a tax foreclosure, there are NO CREDIT ISSUES, whether taxes are paid or not.

Similarly, in a tax foreclosure, there are NO JUDGMENT ISSUES (as there are in a mortgage foreclosure).

And, if you’d simply check your office’s formal opinion database, you’ll see it was long ago decided that property taxes are not the personal obligation of the owner and NO LIABILITY ISSUES (monetary concerns) exist, either.

What does that all mean?

It means whatever I do with a property AFTER buying it from a seller in tax foreclosure IN NO WAY AFFECTS THE SELLER.

big diff

While your staffers likely had experience with mortgage foreclosures prior to investigating me, it’s clear they had little or no experience with property tax foreclosures. That explains their ignorance and why they mistakenly believe mortgage foreclosure rules apply to what I do.

They don’t.

And clearly, from your statements to the press, you believe stopping or not stopping a tax foreclosure is on par with stopping or not stopping a mortgage foreclosure.

It’s not.

Again, there is nothing remotely similar between mortgage and property tax foreclosures.

That’s how you can say things like . . .

They told property owners that they would solve their foreclosure problems . . . — Robert M. McKenna
March 14, 2007 Press Release

. . . and to this day have no idea how you got it all wrong.

Let me explain . . .

You’re asserting, Rob, that while we’ve purchased properties from sellers in tax foreclosure and paid them in full as agreed, their foreclosure problems were somehow not solved.

And that’s simply not true, not at all the way it works, and demonstrates yet again how little your office knows about the tax foreclosure arena.

Only One Problem

People in tax foreclosure don’t have “foreclosure problems” like damaged credit, civil judgments, and personal liabilities.

What problems do they have?

THEY ARE AT RISK OF LOSING THEIR PROPERTIES.

Understand, Rob, the loss of their property is the ONLY PROBLEM they face.

This “ONLY PROBLEM” matter is THE CRITICAL CONCEPT your office has demonstrated it does not comprehend.

Problem solved

Whenever we purchase a property from someone in tax foreclosure, WE HAVE SOLVED HIS FORECLOSURE PROBLEM.

He was at risk of losing his property and we put an end to that risk (and money in his pocket) when we bought it.

And now, HE HAS NO REMAINING “FORECLOSURE PROBLEMS.”

None.

borrower v. property

It’s very simple . . .

In a mortgage foreclosure, THE BORROWER IS IN FORECLOSURE and is personally impacted by the foreclosure in any number of ways, none of which are good.

But in a property tax foreclosure, THE PROPERTY IS IN FORECLOSURE and the owner is not personally impacted by the foreclosure in any way other than being at risk of losing his property.

See the difference?

No sense

Your office issued a press release that said . . .

According to the state’s complaint, the defendants told property owners they would pay off the delinquent taxes so that foreclosure could be avoided.. . . — March 14, 2007 Press Release

Do you now see how that makes absolutely no sense?

When someone in tax foreclosure is interested in solving his foreclosure problem, I attempt to do the one thing I can to assist him: buy his property.

Since his ONLY “problem” is the possible loss of his property, the ONLY solution I or anyone else can offer is to buy it. And once I do, unlike in a mortgage foreclosure, there are no remaining issues that can (or cannot) be addressed.

His foreclosure problem is 100% solved, whether I pay the delinquent taxes, or not, simply by having sold me his property. Heck, I could even let it continue on to the tax sale (sometimes, I do) and it would in no way be to the seller’s detriment.

Clueless in Seattle

Yet you allege I’ve failed to deliver on my promises?

And worse, you make ludicrous claims about me offering mortgage foreclosure solutions to people with property tax foreclosure problems?

Ridiculous.

Suggesting I did less than agreed or made an issue out of paying or not paying delinquent property taxes confirms your office has no idea how tax sales work.

None.

And sadly, that surprises no one here paying attention.

In the arena,

Joe Kaiser

Interesting reading, that press release of yours.

I looked at it recently and remembered why we’re in this mess today . . . you fudge the facts to fit your story, having little and sometimes no regard for the truth.

As investors, we don’t have the opportunity to fudge facts. We have to play by the rules.

Most of us do.

inundated with paperwork

Case in point?

Your press release where you state . . .

Huey said property owners who agreed to receive “help” from the defendants were inundated with paperwork . . .— March 14th AG press release

“Inundated with paperwork?”

That’s ridiculous.

We’ve always attempted to use the absolute minimum of paperwork to bring about well-documented transactions. Doing so facilitates getting them done quickly (since there’s often no time) and with the least amount of effort.

And, we use simple documents with big print in plain terms so there can be no misunderstandings.

A typical deal involves a purchase and sale agreement (3 pages), a seller acknowledgement addendum (2 pages), and a quit claim deed (1 page).

Where an overage play is considered, add a tax sale addendum (3 pages), an assignment agreement (1 page), a letter to the county (1 page) and a Power of Attorney (1 page).

All total, that’s a dozen pages or so for us to do our typical deal, and in your world, that’s “inundated.”

Nonsense.

Try buying a home today

Bought or sold a house lately? Or looked at an MLS purchase and sale agreement in this century?

That one document alone is more than a dozen pages.

Add all the addendums, disclosures, and forms and a simple real estate transaction today often consists of upwards of 30 or 40 pages of fine print documentation, or more.

My former partner related a story about refinancing and spending nearly a half hour signing all the loan docs (and having time to read almost none of it).

So, my dozen pages of docs is the owner being “inundated,” because no one from your office bothered to notice that a normal loan deal today takes 30 minutes, a dozen signatures, and 50 pages to make happen?

Isn’t anyone but me paying attention here?

Are you really this obtuse, or is it intentional to validate a case that needs all the help it can get?

Partnering Up

We also do partnership deals that require a trust agreement (12 pages) an escrow agreement (5 pages), and a lease agreement (4 pages).

Sure, that’s more docs and more pages, but it’s the minimum required to do that deal and even then, is significantly less than simply refinancing today.

But “inundated” sounds unfair and makes me look like some despicable character hitting poor homeowners over the head with more paperwork than they could ever hope to make sense of.

Pure, unadulterated huey.

If you want to experience inundated, go buy a new home with a new loan and learn what being buried in paperwork is really all about. You’ll see, at a minimum, 100 pages of paperwork in a thick file in front of you.

By comparison, my doc package will feel as inundating as a fried chicken and potato salad picnic on a sunny day in June.

The Minimum Document Set

We’ve always used the minimum of paperwork, with the biggest print, with the clearest, “plain English” clauses, reviewed or created by real estate attorneys who make sure we’re fair to all.

And in your world, this is “inundated?”

Rob, I call BULLSHIT, and please pass me the buttermilk biscuits.

Respectfully,

Joe Kaiser

A few years back Joan called about a home in Seattle and asked if I might help save it from foreclosure.

She and her sister Sally were in a pickle and wanted to know if I could help.

Could I?

You’d better believe it.

Nice area

We talked a bit on the phone so I could learn a little about their home, a “clinker brick” rambler with a bit of view in a nice neighborhood.

That was the good news.

The bad news was they’d let the place get so run down the city was all over them to fix it and had even boarded up the place, declaring it unfit to be lived in.

They’d also been evicted.

More trouble

I knew cleaning it up was something we could handle because that’s what we did back then. To me, it sounded like a good weekend’s project and not much more.

But the bad news didn’t end there.

They’d never probated mom’s will so title was a mess, with the two sisters and a brother inheriting the house. They had no idea where the brother lived, and foreclosure was now only a few days away.

Okay, that, too, we can probably handle.

The deal

So, with the raggedy title and an even more raggedy property, getting invested by partnering up in this deal was a big roll of the dice, and that meant I needed a 50% interest.

Ideally, each sibling deeds me half and we’re golden.

Except in this case the brother is no where to be found.

I was told there would be no math

Solution?

Both sisters drove to Tacoma and deeded me 75% of their interests, giving me 50% overall.

Think of it as a pie with 12 pieces and each sibling owning four of those pieces. When the sisters each sell me three of their four, I end up with six pieces total, or half the pie.

And that’s how we got a 50% interest in the property.

My job now?

Stop the foreclosure.

Making it livable

And so I stopped it, heading over to the county treasurer’s office and ponying up somewhere around $12k, as I recall, to take it out of the tax sale.

First job on the agenda?

Get the darn thing cleaned up and all the garbage hauled to the dump so it was again livable (and sellable).

Why not let the sisters get it cleaned up themselves?

It was a control issue, and having demonstrated they weren’t able to take care of the property themselves, putting them in charge of anything wasn’t an option.

So, after the weekend, my partner and I drove to Seattle to walk through the place and create a punch list for the clean-up crew to get started on.

And we would have done just that, except for one minor detail, no house.

You see, Rob, what happens when you let Joan and Sally be in charge of things?

They had total control of the house, right up until the moment the city came by and knocked it down.

Unqualified

The gals so wanted us to save their home they neglected to mention the city had already scheduled it for demolition.

And no one down at the county thought it important enough to let us know about it when we paid the delinquent taxes to stop the sale.

How do you lose $200k in equity over the weekend?

You neglect to take control and let someone unqualified run the show.

Here, again, from your press release . . .

In other situations, the property was placed in a trust and the defendants acted as trustees. Most property owners believed they still owned the property, but the defendants actually had control.— March 14, 2007 Press Release

I only wish we did have control, Rob.

We’d have $200k more in equity (probably twice that now) and wouldn’t have a $50k demolition bill from the city (probably twice that now).

Joan and Sally in the house?

I only wish there was a house.

Respectfully,

Joe Kaiser