Tag Archives: entitlement

RISK MANAGEMENT TAKES SO MANY FORMS

(OP-ED) — The author of this post is a consultant to attorneys on matters involving chain of title, foreclosure matters and matters involving in “the system of things”.  None of  what you’re reading here is anything but common sense, not legal or financial advice … and a matter of fact explanation about how one manages risk!

PROFESSIONAL LIABILITY IN A LITIGIOUS SOCIETY

If “the system of things” teaches us anything, it would be what the legal costs would be for having to defend a professional negligence suit … anywhere from $66,000 to $250,000.  If you have to retain an expert witness to testify on your behalf, fees could run has high as $10,000 … all this over about a two-year period.  That’s two years of hell for anyone.

A lot of these attorneys representing the banks think just because their firm has E&O insurance, they have nothing to worry about.”   That’s what they think.

Again, we think of professional liability carriers and wonder what exactly is covered under such an event as described above.  Professional liability insurance places the law firm under a microscope.  Insurance companies are by nature risk averse and so they’d be reluctant to insure anyone with a propensity to commit statutory or ethical behavior on an ongoing basis for which the insurance carrier would have to pay a damage claim for harm caused by the attorney.

Remember in previous posts, I mentioned how insurance companies became so filthy, stinking rich?   They avoid paying claims on cases at all costs.  They invest in things that will bring them a maximum rate of return and shelter their profits inside of real estate and other wealth-building mechanisms.  But they will look to shave off dollars paid out in damage claims by settling for a lesser amount to keep more of what they make.  I don’t mean to irritate you with more “facts”, but that’s the nature of the beast.  This is why I wrote the ten-part series on “Gutting the Underbelly of the Beast”.   Professional liability insurance, of which errors and omissions falls under, is there to help manage risk.

IT’S TOO BAD HOMEOWNERS IN THE NEW MILLENNIA WEREN’T RISK AVERSE 

If homeowners (as borrowers) would have taken that to heart long ago, we wouldn’t be in such a mess nationally.  The rate of foreclosures wouldn’t have been so damned high.

It’s sad that we’ve been so conditioned to want everything “sooner than later” and “more of it than less of it”.  We’ve been programmed to have feelings of “entitlement” … to reward ourselves handsomely for a job well done.  Hell, even Presidents of the United States have gone on TV and told us that we deserve the American Dream at a time when credit was plentiful and anyone could virtually buy the home of their dreams.  With the Glass-Steagall Act being repealed, the banks became sponsor-sellers, the MERS® System took root and the end result was bad banking behavior which fueled the 2008 crash.   It fascinates me that Wall Street would assume so much risk without first figuring out how to manage it.  I’m talking about mortgage loans, student loans, car loans, payday loans, installment loans to buy appliances … and we’re not even touching credit card debt yet. Much of this debt has been securitized.

Student loan debt has now replaced mortgage debt as the number one crisis in America!   Student loan debt collectors have become more unscrupulous in dealing with consumers.  Baby boomers over 60 years of age are financially liable for $66.7-billion worth of student loan debt (whether co-signed or originally taken out to finance their own education).

I used to clean up people’s credit for a living.  My success rate was 85% in removing negative trade line items from people’s credit reports.  I decided to write a book about it: The Credit Restoration Primer.  It was the first of many books that explained how the credit system works and how credit bureaus are governed by law to make sure your credit reports are accurate.

WHAT WE LEARNED IN PRINCIPAL ISN’T PRACTICAL

Mom and Dad always told me that if you want something bad enough, you save up and pay cash for it.  Right?  Radio talk show host Dave Ramsey promotes debt-free living.

But wait!  The world won’t wait for me to save up for a house!  Right?

By the time I save up enough money to pay cash for a house, prices would be so inflated I couldn’t afford to pay cash.  Plus, I’ll be a retiring. (the afterthought)

Once health issues set in, it will be too late to take care of a home. It wouldn’t be advantageous to pay cash for a house in the future while I’m throwing away money on rent (paying someone else’s mortgage) while trying to save on my own terms just because mom and dad told me to avoid debt whenever possible. (just looking at semi-rational scenarios)

But wait!  Mom and Dad worked like slaves to put food on the table and seemed to be doing okay.  Or did they?   Look at their outcomes.  Work for the Company Man.  Get a gold watch. Get a kick in the ass (out the door, to old to work when we can find younger people to replace you at less cost) and then retire, get sick and die.   The “get sick” part is where the family again struggles to make ends meet while coping with huge medical bills because of lack of health insurance or high deductibles.

We’ve taken from what we’ve learned and decided that based on current data, we’d be better off in debt.  How crazy is that?  The banks and credit card companies would just love it if you got yourself in head over heels in debt.  They’re rich and you’re broke.  Yes, you may have “stuff”, but you’re broke!

BECOMING RISK AVERSE IN A SOCIETY THAT PROMOTES DEBT

Whether you like it or not, the Age of Entitlement is upon us.  We have nice things because we want them, no matter the risk in obtaining them.  We cannot become financially successful without a plan.  Then again, there are some that are just happy being able to make ends meet.  But it’s never enough, is it?  You always want what your parents had and then some.

The media is guilty of putting ideas in your head.  Ideas that promote debt. We allow it to permeate our thought processes because it expands our comfort zones and makes us feel better.  We have become programmed to make bad decisions because we “want it now, not later”.  Lacking legal and financial education seems to have been a deliberate thing, despite the fact the government keeps telling us it’s budgeted money to educate us in certain financial matters (like the money appropriated for “education” under the new Fair Credit Amendments Act in 2003). Where was that “education”?  I sure didn’t see any of it.

Why didn’t they teach “Checkbook 101”, “Mortgage 101” or “Student Loan 101” in high school?   I personally didn’t learn too much in civics class.   Maybe my teacher really didn’t give a shit whether I learned anything or not.  In high school, it’s all about the annual test scores and nothing else.

In the land of plenty, why are so many people starving?  Why are there still homeless people?  Have our principles simply been ignored?

Being homeless or without food presents a personal safety risk.  Thus, the government steps in and has the answer: Welfare, Section 8  housing, homeless shelters and food stamps!

But wait!  You have to fill out a form, giving Uncle Sam all of whatever personal information you can give, so the government can build a database with you in it.

The ideas that run through your head when it comes to food, water and shelter involve risk management (believe it or not).  If you can’t plan for a rainy day, why take the risk?  There’s always welfare.  Someone has to pay for it.  Let’s all have a pity party while we figure out who.

We have a government that writes checks its body can’t cash.  Our national debt is into the trillions.  Every time a new budget gets passed, a huge chunk of it is “pork”, so politicians will keep getting re-elected to keep the special interest groups that got the “pork” benefits happy.  This is the Congress that is bought and paid for by lobbyists, like those who work for Fannie Mae and Freddie Mac.

Our government has set such a wonderful example for us, hasn’t it?  Congress can’t balance its own budget, so why should we?

Spending makes us feel better. People get all emotional over colors, floor plans and styles, they forget practicality and price. To top that off, many buy over budget because they think they can afford it.  Prior to the 2008 crash, people took out risky loans, most of whom could never repay them. Many folks allowed the lenders to inflate their earnings so they could buy more home, which was a great disservice.  I’m not saying it’s all the homeowner’s fault.  The lenders played right into the game, offering predatory loans which were risky in an already unstable, credit-saturated market.  The teaser rate was merely a game played by unscrupulous lenders on uninformed borrowers who wanted their piece of the American Dream, only to find themselves on the street years later.  Our government promoted all of this and America bought into it.  Congress repealed Glass-Steagall through the Gramm-Leach-Bliley Act. It was a bipartisan effort.  No one but the banks knew how they were going to use securitization to “rig” the economy.  Notice how the government hasn’t put any of them in jail?  Our executive branch is supposed to enforce the laws that Congress makes.  Why did we forget that?  Why wasn’t that drummed into our heads in high school?

Do we chalk up our current system of behaviors due to lack of knowledge?  It’s no wonder insurance companies are rich.  They avoid risk.   Why aren’t we doing that?

CERTAIN WAYS TO AVOID RISK (MY PARTIAL LIST … TAKE IT FOR WHAT IT’S WORTH): 

(1) Research your planned purchases BEFORE you spend money!  See if you can get products that are either more durable or have a longer shelf life.  America has been so conditioned to mass produced products we’ve become a “throw away nation”.  We’re already seeing difficulty in America in disposing of trash.  Spending a little extra for something that has a longer warranty or shelf life is more prudent in the long run. If you have to use credit to buy that item, make sure it fits within your budget and have a time frame set in your mind (and on paper) on when you intend on paying it off.

(2) Investigate all insurance policies BEFORE you invest … and don’t over insure!  Compare policies.  The last policy I got didn’t cover that much in computer replacement in case of a lightning strike, so I upgraded my policy for $204 more to cover replacement of ALL my computers in my home.  Sometimes, not having ENOUGH insurance puts you at risk … and, in the alternative … sit down and total up all of your policies’ annual premiums.  If you’re paying more than 10% of your income on insurance, you’ve bought too much in policy benefits (or you bought a policy that doesn’t fit your current needs).  It’s like buying whole life insurance policy when pure term is cheaper and you can gage your financial position based on your age and what your current needs are and not get killed financially by changing face value amounts.  Having insurance is part of managing risk.  When homeowners default on their loans, hazard insurance is the first thing that gets cancelled for non-payment of premium.  This is why I pay annually.  It’s cheaper and you have a definitive date to plan for, so your risk is calculated.  General liability insurance on the average runs $350 a year!  If you’re going to protect yourself against high-risk situations, it’s a good thing to have.  I’m not a big fan of homeowners’ indemnity policies.  They essentially insure nothing and with MERS around, shit happens.  There’s nothing like buying a piece of real estate with a tainted MERS mortgage somewhere in the chain of title.  You never know what the future holds if your home’s fate is in the hands of some unknown REMIC.

(3) Avoid impulse spending!  I go shopping just to see how informed the clerks are.  I will rarely buy anything unless I absolutely need it.  This type of buying is especially true in grocery stores.  Why do you think they have food samples for you to try?  To get you to buy extra!  If you have a frustrating time buying groceries and stretching your family’s budget at the grocery store, you have no business going out to eat (because you’re frustrated with high grocery prices) and you’ve probably succumbed to the grocery chain’s slick marketing campaigns.  The stuff they WANT YOU to spend extra on is always in the middle of the aisle or on the end caps.  If you have to take your kids shopping with you, make them go into the check-out lane BEFORE YOU and make them watch the clerk load the cart to make sure nothing you bought was missed.  That way, you give them something responsible to do and they’re not basking at the candy racks at the checkout counter and bugging you with “I want! I want! I want!” overtures.  Hey!  They learned this conditioning on television.  It’s called cartoons (advertising targeted at children in between the cartoon segments).

(4) Plan your educational expenditures by properly planning your career move! Many folks went to college and majored in stuff that had no career future.  They went to school and took classes they liked and spent a fortune (in student loan money) over-educating themselves in foolish majors (like forestry or liberal arts, for example).  It’s one thing to double major in horticulture and business if you’re going to manage a food production facility (like a farm, poultry or egg production or similar skill set) or work for a Fortune 500 company with a guaranteed paycheck.  But wait!  There are risks there too!

First, there is no guarantee that you’re not replaceable!  The first time you make a sexist remark in the workplace, you’ll be labeled a target of some political movement that is responsible for polarizing America.  You’ll be shamed.  This is what you have to look forward to in the national workplace now.  Everyone’s got a political opinion. Everyone’s got Twitter.  Everyone’s got Facebook.  Everyone’s got Instagram. Ask Anthony Weiner (who’s getting out of jail soon) what the consequences are of putting sexually explicit pictures on your phone and sending them to someone.

Second, if you’re nearing retirement age, but have great experience factored into your work history, you can bet the company will be looking for someone younger with much less experience that they can pay less of a salary to.  This posits a risk in this day and age.

Third, there are unplanned illnesses.  You know your body better than your doctor does.  If you have health issues, get them fixed FIRST before embarking down the path to a new career.

(5) If you have to retrain to get out of being unemployed or underemployed just to stay afloat … research self-employment FIRST … then the skilled trades! 

Anything involving food, water, shelter and personal welfare (medicine, nursing assistant, dental assistant) are the BEST career moves NOW.  I know for a fact that my kids are not like me.  They do not have the discipline to be self-employed like I am. I always told my kids to work off the “trade side” and go to a short-term facility that offers grants more than student loans.  In the alternative, attempt to get a job in a trade that is willing to train you while you work (OJT).  True, it doesn’t pay much but the gains from improving your learning curve far outweigh the temporary disadvantages. If you’re going to have to take out a student loan, put a limit on what you’re willing to borrow.  The average student loan debt in America at present is $30,000!  That means, if you can stay at the lower end of that curve, say, $10-15,000, you’ll pay it off in less time.  But you’d better have a job lined up (or at least research enough to know there will be a job in that career path for you) when you graduate.   Paralegal certificates are easier to get these days and there are certain parts of the legal field where jobs are plentiful for lower-echelon workers.

Again, I like self-employment better.  I can work from home and be a consultant when I want.  I can do seminars when I want … or not.  I can work as much as I want or as little as I want.  Every day however, I’m up by 6 a.m. doing research for an hour or so!  Old habits die hard.

I had fun as a mobile DJ.  I made good money too and didn’t have to spend a fortune on equipment.  I rented someone else’s gear first.  When I got enough to buy my own gear, I continued to rent the gear for another DJ to use and over time, I was able to put 28 DJ’s to work and make damned near a six-figure income! That was in 1983.  Imagine what self-employment could do for you and research all of the possibilities.  In some trades or skills, you can rent what you need before you have to make a commitment to purchase stuff.

Avoid franchises!  I know … they look attractive, but there’s a hefty price tag and a huge commitment to follow their schools of thought, whether they work or not.  This is why they put ads in entrepreneurial magazines, to snag the ignorant who are attracted by their teasers.  If you don’t have a couple of million bucks lying around, you’re not going to be able to get into a McDonald’s franchise or a Hooters franchise or any other franchise you think is sexy or at best attractive.  A lot of people like to compete with Starbucks and open coffee shops or coffee carts.  Not a bad living.  Any kind of food cart is a cheap date, but you’ll face local licensing issues and potential consumer issues (conflicts on the street, hold-ups, shoplifters, etc.).

My mom had her own news stand inside the Rochester Gas & Electric building for a number of years before she passed.  It was a safe environment (there was a security guard in the lobby near where her stand was set up, inside a rented nook in the lobby) and she made a modest living and did well despite renting a studio apartment (unfortunately, she never had the opportunity to own a home).  She never got a college degree.  Back then, you just applied yourself.  But the work ethic has changed and so has the marketplace we live and work in. People seemingly care less about the end result (doing a good business) so long as they get a benefit from it (a paycheck with no commitments).

Self-employment is the “new shit”!  Set up an LLC or a full C-Corp. I don’t know if you knew this or not, but the IRS audits full corporations and LLCs less than self-employed sole proprietors.  LLC’s (I’m told by several credible CPAs) get up to 75 deductions a year, while sole proprietorships only get 35 deductions annually.  Full C-Corps get up to 350 deductions per year!  Put your personal property and your homestead into separate trusts as part of asset protection to guard your investments.  Being a consultant or an investor is NOT a bad thing, especially with the right training.  I spend a ton of time researching other people’s careers to determine their longevity.  I can look at a credit report and tell a lot about the consumer (how leveraged they are).  They may have a great cash flow and credit that sucks.  That tells a lot about how they manage risk (0r don’t).  When you can get to the point of investing in other people’s projects (with them doing all the work), then you’re really on top of your game!

(6) Learn to construct a financial statement!  There are FREE classes both online and offered by community colleges and libraries that will teach you how!  Once you know HOW to build a financial statement, you can then figure out what kind of a budget makes you more attractive to expand your horizons. It takes less than a day out of your schedule to learn how.

(7) Do NOT buy vacant land unless you intend on a pre-planned build job! There’s nothing worse than buying a vacant lot (and overpaying for it) only to find that you’re about to get hit with high sewer assessments or increased property taxes due to an unforeseen annexation.  Don’t buy land in flood plains!  I don’t care how glamorous the lot is.  If you’re going to buy, buy in secure areas with a home-building plan.   I actually acquired a 3/4-acre tract and put a used mobile home on it from a lot I bought through the Texas Veterans Land Board for $75 down and made payments on both until the timing was right to sell the 12-acre parcel.  I ended up with a $222 a month land payment and a paid off mobile home, which I fixed up and later made a $27,000 profit selling it.  In the process of selling the 12-acre lot, which was soon to be adjacent to a major toll road, I paid off $35,000 worth of debt!  Being mortgage free is wonderful.  I wish everyone in America could experience it.

Land purchases are great if you have a definite plan to build.  Getting suckered into development purchases is penny-wise and pound-foolish!  Avoid HOAs!  Research chain of title to make sure there’s no restrictions on the lot you’re going to buy and that the title is clean.  If you can buy 5+ acres, owner financed, even better.  You can put a used mobile home on it and build as you go.  A lot of people are doing that these days.  I would do it again if I had to (in a heartbeat)!  You can put in a garden, a well and eventually solar panels … and live off the grid.

AVOID buying second or vacation homes! I know this goes against the grain of you overachievers out there that think you deserve everything. Part of the problem is, second homes or vacation homes is nothing but an equity builder and equity is “fake” until realized.  Many people rent out their second homes but with this creativity comes more legal restrictions. I just don’t like tying up money you could use to really build wealth owning a business.  If you’re going to plan your career, look at self-employment and design your home purchase in an area as your principal residence that doesn’t have to support your business in order for it to survive.  Truck farming is another creative way to stay “under the radar”, eat well and have plenty of fresh, healthy fruits and vegetables left over for bartering.  Farm organic (but don’t advertise it … it raises an FDA red flag and subjects you to scrutiny). I’ll write another book about “being invisible” at some point.

From the investor’s perspective, forget the idea of a second home or a vacation home.  Build a rental income portfolio by investing in distressed properties that you can rent out and make a decent return, while making the bank payments.  There are people with money that have crappy credit, so option payment financing puts instant cash in your pocket you can use to buy another property or fix up your own place or pay down debt!

I know a couple that started out with a mobile home on 8 acres. They originally purchased a mobile home.  They put up a garage and pens and she got her veterinary assistant’s certificate (short term skill training) and got a business license to open up a kennel.  They eventually managed to build their mortgage-free home from scratch.  Yes, it took time, but the rewards were realized in the profits they made from their home-based business!  Ah, the peace and quiet of country living along with the security of knowing you’ll have lots of barking dogs to warn you of unwanted intruders!  I know that a lot of you aren’t cut out for that kind of work, so I posit this as a creative example of “putting your mind to something” to have a working investment.  Credit card companies are throwing credit card applications at these folks because they have cash flow.  They are credit resistant though, because they’ve budgeted and saved for a rainy day, mixing old school principals in today’s modern times.

(8) Say “NO!” to MERS mortgages!  Getting a loan that you know is going to be securitized is crazy because with the digital age, you’re putting your whole future at risk.  Your chain of title is going to ride on someone else’s say-so! You don’t want an electronic database involved in your life any more than you’d want your mother-in-law calling every other minute to query where you’re spending your next dime!

(9) Bank with public banks and credit unions!  Only go with banks that portfolio their loans (meaning they hold the loan in their own vault) and don’t sell them to any entity outside of their own bank!  If the bank is a member/subscriber of MERS, go somewhere else.  You don’t need to support these mega corporations any longer!  Generally, the credit unions give you savings accounts and additional protections that the mega-banks take for granted (when they’re taking YOU for granted).  AND … DO keep cash on hand.  I recommend at least $500 for every person in your household.

(10) Consolidate and pay down on credit cards!   Close the ones you hardly use, have high interest rates or hit you with annual fees.  Unless there’s a real purpose for having a department store credit card … those cards should be the FIRST cards you get rid of!  All your other plastic will work in those stores.  I take issue with these low-dollar credit campaigns like Macy’s and JCPenney’s do as a means to get customers. It’s not worth the hassle of applying for a $300 credit limit just to get a deal on buying one item or saving money on your initial purchase.  You’ll have an inquiry on your credit report, which could bring down your overall credit score.  It’s too easy to forget paying on cards with really low balances, which could jack up your credit score when you least expect it. I find keeping a credit card available for travel or emergencies is the most prudent, don’t you?

TEN WAYS TO “CLOCK” YOUR OPPONENTS UP SIDE THE HEAD! 

Read the 10-part series on this blog: “Gutting the Underbelly of the Beast”!

That way, you’ll learn how “the other side” manages risk.

Listen to this author (Dave Krieger) on City Spotlight-Special Edition, every Friday night at 6:00 p.m. Eastern Time on WKDW-FM!  Get the latest financial news and education!

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Filed under OP-ED

TO FIGHT THE GOOD FIGHT … OR NOT!

OP-ED — THIS IS STEP THREE OF A 3-PART SERIES BY DAVE KRIEGER, AUTHOR OF CLOUDED TITLES

I have conducted intense research for over ten years on chain of title issues and what it means for affected homeowners.

Foreclosure mill attorneys could care less about the chain of title, so long as they can come up with a game plan to steal the property, even if it means participating in the manufacturing of title documents that create standing for their client to allow their little “scalping party” to appear in court.

Once the mess of confusion has subsided and the educational process has begun, the average homeowner discovers (over time) that the method by which the alleged “lender” has preyed upon them has imbued them with a combination of guilt, rage, entitlement or empowerment or the combination of one or more of the above.  This is where things get tricky because the average homeowner generally does not know what the chain of title could possibly reveal in their particular foreclosure case.

As the clock ticks, depending on where you live, the process of foreclosure continues.

If you’re in a deed of trust state, you generally get about 45 days prior to the date of the sale to react.  By “react”, I mean file a lawsuit and get a Temporary Restraining Order (TRO) to stop the sale and have your case heard before a tribunal.

If you’re in a mortgage state, you generally get 20 days to file an answer ONCE YOU’RE SERVED with process.  This is key to your understanding. Once a party to a foreclosure action finds out the lender is attempting to serve them through a process server, they hide to avoid service.  This only works for a short time, as the process server will figure out (through skip tracing) what your daily routine consists of and will eventually catch up with you and serve you with the foreclosure complaint when you least expect it.  Avoiding service usually means the attorneys for the bank (or the servicer) could end up going to the judge and requesting what is known as substituted service, which generally means that a relative who knows you can be served with the papers instead.  Then the 20-day clock starts.  By the end of that 20th day, you would have had to file an “Answer” or face default judgment.

Answer #1 … to Run or Not to Run … 

What you’re about to read is NOT all-encompassing, because every homeowner seems to choose a different path.

95% of homeowners who are served with a notice of foreclosure … RUN AWAY from it!  I know that figure is hard to believe … BUT … that is exactly what the lender wants you to do.  The alleged “lender” knows it’s a “numbers game”.  The majority will run away but some will stay and fight.  By avoiding the foreclosure (by running away or doing nothing), you’ve made the lender’s job 95% easier … provided the lender (or the alleged lender) has done their job right.  When the average homeowner gets served they RUN because they lack education or the funds to get educated and fight the foreclosure.  The lenders know that 95% of all homeowners do not have a legal defense fund set up to wage war in the court against the lender to save their homes.  The lenders know that in most cases, they will end up with the house (whether free and clear is debatable here) because the homeowners are scared away from a fight.  Those who do not understand that the court systems in America are motivated in favor of lenders will soon find out that fighting “the good fight” is not the easiest task in the world.

Now let’s look at the 95% of the homeowners who “run away” from the problem.  Many pack up and move out as soon as they are served with notice.  A certain percentage of them will simply “freeze in place” once served.  They don’t know what to do next.  Rather than pack up and move right away (upon service of process), they stay put and either ignore the paperwork (denial) and whatever notice they are served with and simply wait for the county Sheriff or constabulary to evict them and put their belongings to the curb.  I can’t begin to tell you what that feels like, so I’ve included a video clip to refresh your memory in the event you can’t visualize it.

I cringe watching that video, almost to the point of tears.  This is not HOW I planned to peel away at the onion!   I pray to God that no one has to endure this, but sadly, in order to avoid what that video depicts, the homeowners plan their move accordingly, knowing the bank will eventually show up to their doorstep with law enforcement and they are “moved” whether they like it or not.  This does NOT have to be you!  Even if you have a PLAN B in place, the best well-made plans take time.  You do NOT have to run, now or then.

Answer #2 … to Fight the Good Fight … or Not! 

Not fighting “the good fight” manifests itself with bad behavior.

Remember I first discussed guilt, rage, entitlement and empowerment (or any combination thereof) earlier in this post?

Fighting based on guilt is totally inappropriate.  It basically means that you’ve let the lender and/or its henchmen (the servicer’s $9/hour cubicle employees) take over and run your life based on “power over” collection tactics.  The mortgage loan servicer is obviously trying to fleece you for every dime it can get because that’s how it makes money.  You fight the urge to say “no more” based on guilt feelings.  You fight the urge based on guilt because failing will bring on more guilt.  You want to keep your house and so you’re literally “bending over” at every whim of the foes coming against you.  While this appears normal as part of our built-in defense mechanism, letting guilt drive your emotions means making bad decisions (decisions based on emotion rather than common sense and logic).  It’s basically fighting with yourself because the servicer is making your decisions for you and you’re not making them yourself.  You feel guilty because you let them win … and they’re just getting started!  Guilt can fuel the unthinkable, like murder-suicide.  That is not the answer.

Fighting based on rage is also totally inappropriate, unless your rage is channeled into the fight itself.  Walking around being pissed off at the world, being pissed off at your family and friends and whoever you happen to engage in any related financial conversation is not the answer.  Rage, like guilt, is also an emotional element not worth pursuing if you’re going to fight “the good fight”.  Rage will make you do extremist things, like spend money where it doesn’t need to be spent logistically; spending money going on lavish vacations while ignoring the responsibilities of American homeownership; substituting rage for logic in failing to develop a business plan in order to make things happen.  Rage can also fuel the unthinkable, like murder-suicide. That also, is not the answer.

Fighting based on entitlement is understandable based on the political times we live in.  Most of America has been so conditioned to live off the government (via entitlements) and trust it implicitly that most Americans have been conditioned to believe that “the world owes me a living” and that “if I complain to the government, the government will step in and save me”.  This is false conditioning.  Complaining to any government agency about your foreclosure is a colossal waste of time!  This conditioning was by design, based on deceit by some very powerful oligarchs who have made themselves gods, thinking that their rationale is better than the average Americans’ and that they should be entitled (self-entitlement works in strange ways when you have lots of money) to make decisions for everyone else, including letting the banks run America. When you start to believe that the world owes you a living, then you can easily fall into the trap (when seduced into this false belief) of, “the bank screwed me, so I deserve a free house!”  That is not only illogical in thought, but the courts in this country, who feed off of entitlement, can spot an attitude of entitlement a mile away and shut it down!  Entitlement does not fuel the unthinkable, but it does fuel ego and pride … and pride goeth before a fall. Being entitled means you know everything.  That too is dangerous.  Ego has also hurt the banks in playing their “numbers game” too; however, the banks make up for it through the numbers of homes they’ve “stolen”, making them a more powerful legal adversary.

Fighting based on empowerment is the most desired aspect of fighting “the good fight”!  Knowledge is power and wisdom is knowledge applied.  Knowing WHEN to apply knowledge is what wins battles (Sun Tsu, The Art of War).  Knowing WHEN the enemy is weakest and where their weakest points are to begin with puts the homeowner in a condition of empowerment.  Even Tige Johnson, a transactional lawyer out of Chicago who has lectured at my workshops, has even stated that when homeowners are fully aware of the facts in their case and what the law says, they make very empowered clients.  Employing “rage” as a “fuel” to empower you to search is the greatest attribute, because it’s what drives you to succeed no matter what.  Rage alone, without empowerment, spells doom for every homeowner who wants to fight “the good fight”.

Answer #3 … the average homeowner who litigates a foreclosure can delay a foreclosure for up to 2 years! 

Ahhhh!  The naysayers and the gainsayers will chastise me for creating false hope; however, the foreclosure defense attorneys have figured out a gameplan that will delay a foreclosure for 2 years or longer and in doing so, “buys” their client time.  Time for what?  To sit on their laurels and enjoy the scenery?  Those who are embroiled in litigation MUST stay on top of it.  There is no time to dawdle or take a vacation to the Bahamas just because you’ve forced the alleged “lender” to prove its case. By the tone of your response to the foreclosure notice, whether in a deed of trust or mortgage state, the foreclosure mill law firms can measure how much of a fight is necessary to accomplish their mission.  They want to win.  They want to help their client get your home.  Many of them will engage in misleading tactics designed to throw you off point.  Many of them will commit deceitful acts and make false representations to the court.  This is all part of their game.  It also keeps the foreclosure mills in business longer because there’s no more income stream to them once the foreclosure is over and they’ve won.  And you wonder why the foreclosure mills aren’t coming after me?  It’s because through my efforts, they stay in business because I’ve empowered homeowners to fight “the good fight”!  Think about the logistical financial issues posited to the banks and their attorneys.  As Tige Johnson has stated (in my workshops), “I’m here to make the banks bleed green.”  Thus, it costs the banks to fight your “good fight” too!  This is something to consider.

In a deed of trust state, by law, most states do not allow for anything past the taking of the security, which means that once the foreclosure is complete, there is no deficiency judgment.

However, in order to keep the foreclosure hounds at bay, you have to initiate a lawsuit in the proper court, because deed of trust states do not provide for your “day in court”.   You have to “create” your day in court by filing a claim against the lender or its alleged representative.  Once that suit is filed, you also have to ask the court to stop the foreclosure sale by granting a temporary restraining order (TRO).  Simply filing a lis pendens only “gums up the title”.  It does NOT stop a foreclosure.  I had to get that through my head when I started helping homeowners fight “the good fight”.  As I teach in my Foreclosure Defense Workshop (along with attorneys who lecture at them that are well versed in this subject matter), you have to follow rules of civil procedure and rules of evidence to the letter, which means you have your work cut out for you unless you have the resources to retain counsel to represent you.

In a mortgage state, by law, most states provide for deficiency judgments (post-sale) and attorney’s fees, which means this has to be taken into consideration before you fight “the good fight”.

Many times, a straight forward “Answer” that is timely filed with the court and appropriately served on the foreclosure mill law firm representing your alleged “lender” adds an additional 30-60 days to your “fight”.  Simply put, ANSWER the damned complaint, point for point.  However, just because you’ve filed an Answer to their complaint (in a mortgage state) does NOT mean you get to sit back and relax.  Your fight is just beginning.  Many reading this post have kept the lenders at bay for 8 years or longer!  Whatever made you think you can’t do the same?  Would having an extra 8 years of time give you time to get your financial affairs straightened out to the point where you can strategically leave the suit and enter into a new financial realm you created during that time frame?  Many smart homeowners have figured out that if they can “buy time”, they can re-strategize their financial position and move on! Sadly however, most homeowners aren’t that smart when it comes to litigation, which is why I hold workshops.

Answer #4 … opening the door to “empowerment” by doing your homework! 

Over the years, I have learned that every alleged “lender” (generally through its mortgage loan servicer) creates at least one “assignment” and causes it to be recorded in the land records in the county your home is located in.  Many of these assignments are created just prior to a foreclosure action, which becomes suspect as to its legitimacy.  You can bet that the assignment was “designed” to “manufacture standing” so the lender’s representative can complete the foreclosure without question from the court.  It’s like “manufacturing evidence”, which can be used to the lender’s advantage … or in many cases by you … to the lender’s disadvantage.

Starting with evaluating your chain of title may prove to be the key to discovering the strategies you need to fight “the good fight”. Filing bankruptcy to stall the inevitable is the “cheap way out”, that will hurt your credit more than the foreclosure itself (by more than 300 points), which is why I’m not quick to even think that way.  Unless you have a defined strategy involving an adversarial proceeding, along with a huge mountain of unsecured debt with no way to pay it back, I would never consider filing bankruptcy.  Filing bankruptcy is not empowering anything.  Filing bankruptcy is giving up in a feeble attempt to “stop the bleeding”.  Even if you stop the bleeding, the damage has been done and there will still be a scar, a scar you will live with for ten (10) years (even if you are successful in removing the bankruptcy from your credit reports).

In order to become MORE successful in your efforts, you need to plan a strategy,which includes an exit strategy in case things don’t go as planned. These days, I’m seeing a lot more investors using “end game strategies” (which I also teach at workshops) because they are “calculated” and their financial weight can be measured.  The average homeowner however will find themselves in a different scenario because as I stated before, the “war chest” simply doesn’t exist in most cases.

Thus, once you obtain your entire chain of title, you can look for clues as to how to unwind your dilemma or in the alternative, find the most efficient and affordable way to restructure your life and move on.  The “devil is in the details” and most of the time, the evidence found within the promissory note does NOT match up to what the recorded assignment says.  The other side will twist the truth to prove its case; or in the alternative, throw in stumbling blocks to increase the cost of your litigation in an attempt to discourage you from fighting further and to resort to settling when settling may not be an option when you know the truth and have figured out ways to prove it.

I’ve been involved in numerous cases throughout my years of involvement in the world of foreclosures, which is why I’m called in to consult attorneys on various cases and conduct chain of title assessments (COTAs) for homeowners, which saves them time and money because the attorney can get to the real issues faster, which saves the attorney time as a benefit to the homeowner, especially where time is of the essence.  I can genuinely live with myself in what I’ve been doing, which is to educate homeowners using the research I’ve conducted since 2007.  Whether the research pans out for the homeowner depends on how the homeowner chooses to fight “the good fight”, which is why I’ve developed workshops that teach foreclosure defense.

In closing, I also warn of using “rage” as your guide when it comes to picking your litigation strategies.  You have to have a level head in order to evaluate what strategies are going to work best.  Suing everyone over everything is a sure way to stretch your finances to the limit.  While I believe that walking away (strategic default) from a future problem (home foreclosure) has been used not only by myself but by multitudes of others as well, knowing the truth about the matter may have changed the strategy I’d planned as well as the case outcome.  How then can you make an honest decision without a level head, a true set of facts and multiple strategies with which you can cloak yourself in empowerment?

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STOP WALLOWING IN SELF-PITY AND START FIGHTING BACK!

Op-Ed — The author of this blog (Dave Krieger, not the same “Dave Krieger” that got fired from the Boulder Daily Camera for speaking out against the newspaper’s owner, a hedge fund that he claimed was the ruin of his daily newspaper, where he was an editorial columnist, against the orders of the publisher) has written four consumer-related books and four legally-related manuals on debt collection, credit restoration, foreclosure defense and “end game” strategies.  The purpose of this blog is to encourage activity through education and not to render legal advice. 

Woe is NOT me!

I write this post to convey a thought process that had not only entered my mind at a point in time back in late 2002, but I also had to consider that other American homeowners have also had this same thought process under similar circumstances as frequently as the moment you’re reading this post.  My intention here was not to write this in a demeaning way, for we are human and as humans, we make mistakes.  I wrote the book Clouded Titles because I made a mistake and I wanted to learn from it through research.  I self-published my first version of Clouded Titles in December of 2010 after two years worth of research into what in the hell was going on across America, partly because no one else was rising to the occasion and I saw a need for getting this research out there.  Someone had to say something … and no one was. Once I published that book, I was no longer a victim of that mistake.

I have been accused by some of being an opportunist.

If you think that selling copies of a self-published book is a way to get rich or was my only purpose for making money in handing out information … the real reason I did this was because time is money … and over time, I’d lost a lot of money.  Printing copies of the book cost money, which is why self-publishing is so expensive and many times will stop a person from publishing a book.

I further had to reflect on the ways that homeowners (as borrowers) became discouraged and then confused when they further wade out into the “river of cures” for their situations, only to find charlatans and thieves waiting to take their money and run. This includes foreclosure defense attorneys, many of whom have figured out “the delay game” and recklessly charge for that. While it is true that there are many attorneys who continue to educate themselves as to how to fight the banks and are successful in court, they are far and few between. Many of those attorneys who stand up and fight, get knocked down.  Some of them are disbarred for doing the right thing by their homeowner-client.

This is part of the confusion that the banks absolutely love, because they’ve already “gotten ahead of this” legal game they are fighting by having Congress and our state legislatures create laws to help banks and hinder homeowners.  Thus, when the confused homeowner finally realizes he’s been duped, he becomes angry and this is where the real problem begins because all rational logic and common sense about litigation goes out the window.  Now the angered homeowner “knows everything”, even though he didn’t go to law school.

They just want a “free house”, your Honor! 

This statement has been recited in open court tens of thousands of times by foreclosure mill attorneys, while the uneducated homeowner sits there with his thumb up his ass!  Why didn’t you or your attorney object?  Oh … you didn’t know you could do that?

I’ve discovered there were people who became “entitled”, thinking that all of the research I did should simply be handed to them for free because “they deserved it” and that if I really wanted to help homeowners, I would just hand out all my research for free.  THAT mindset is what got me into trouble in the first place.  That is part of the “self-pity” phase that will get you into trouble if you let it.  My first mistake was to put my first version of Clouded Titles out in pdf format, which was available for $19.95, which was subsequently purchased and downloaded all over the internet for free through the homeowner foreclosure networks.  My intention was to use the proceeds from the book to do a national tour, offering free, daily workshops for homeowners in 50 cities, but as a result of this “entitlement”, THAT didn’t happen. I learned NOT to make that same mistake again, because it costs for me to research and publish and my time is worth something. Your time is worth something too. Stop thinking it isn’t.  THAT thinking got YOU into trouble because it was at that point YOU became a victim and became discouraged.

I have been accused by some of giving false hope.

Albeit, God only helps those who helps themselves, but I liken this scenario to being slapped around for trying to do the right thing.  If you are facing foreclosure or are in the middle of it, then I have walked in your shoes and I do not deserve to be treated as if my voice should be silenced because I chose to stand up and fight.  I thought this was America and this is what Americans do when there is a wrong that affects the masses and Congress doesn’t want to listen.  Apparently, there are some out there that think I’m trying to get rich off of the backs of struggling homeowners and that was never my intention.  This is one of the reasons I volunteer at WKDW-FM Radio and have a consumerist show called City Spotlight – Special Edition, where I’ve spent over a year, discussing my research (along with my frequent co-host, R. J. Malloy, who is a retired attorney and former law clerk to a U.S. District Court judge) with listeners (and attorneys who listen to my show).  My show, which is 55 minutes in length, airs every Friday at 6 p.m. EDT and repeats every Monday at 2 p.m. EDT.  I have talked in greater detail about a lot of the stuff I teach at my workshops (chain of title, foreclosures, corruption in the court system, etc.). You can listen live just by going to the website and clicking LISTEN LIVE … for free!  (You get to pay for internet access, as NOTHING is for free!)   

I regularly donate money to keep this radio station going, as it is listener-supported community radio.  If I make anything off of my program, it will be because it may be syndicated in the future.  I will continue to donate part of those proceeds back to the station to keep it running.

BUT!  Why should I continue to do that if you don’t care?

I have had any credibility I sought to build (through my efforts to educate and speak out) attacked by MERS, the banks, law enforcement and the media. 

This goes to show you that in life … no pain, no gain.

Even if you have pain, the first thought entering your mind is to give up and run away.  Others have tried that and failed miserably.

I have learned that when you run … you fail!  Throughout history, Americans who ran from a fight ended up being taken prisoner and we have all been enslaved in debt in this country to one extent or another.

I became aware that as early as 2011, bank attorneys and information technology employees working for the banks and MERSCORP, Inc. nka MERSCORP Holdings, Inc. (and its wholly-owned subsidiary, Mortgage Electronic Registration Systems, Inc.) were monitoring my every activity, from radio shows to TV interviews to blog posts.  They do this for a reason. They want to know if authors like myself are saying anything defamatory about them or spreading false rumors about them.  They also wanted to monitor my “educational output” because they want to know HOW homeowners were being taught to fight back and what they could expect.  This further educated them as to HOW to counter attack homeowners in court.  This blog post and my radio show are not the only outlets being monitored either.

Because of my sharing of this research to the Texas Clerks’ Association, my team and I were retained by Nancy Rister, who is still the County Clerk of Williamson County, Texas, to conduct an audit of her records (see the link below):

WILLIAMSON COUNTY REAL PROPERTY RECORDS AUDIT_January 29, 2013

As a result of the release of that “Audit”, then-MERSCORP, Inc. CEO Bill Beckmann bought almost a full page ad in the Austin American-Statesman, on February 7, 2013, attempting to refute the contents of the 179-page report.  I knew for sure that this so-called “MERS”, by whatever definition, was watching the goings-on and the public reaction to my research and the results of the report.

As soon as the OSCEOLA COUNTY FORENSIC EXAMINATION was released to the public, the media outlets (who I suspect were spoon-fed information by the Osceola County Sheriff’s Department, in violation of F.S.A. § 400) proceeded to attack myself and Osceola County Clerk of the Circuit Court Armando Ramirez because of my “colored past”.  This is all part of the sacrifice I had to make … and some of the disgruntled homeowners, naysayers and gainsayers proceeded to jump on the bandwagon … people who I thought were fighting for homeowners … and attacked me as well by furthering the misrepresentations contained in the media news outlet reports.  You see, this is all part of a process known as “demonization”.  It’s what the “system” does to those who protest in order to “keep them in line”.

I do not care what some of these gainsayers have said (including referencing my “bolting from a news conference” I elected to speak at like “O.J. Simpson in a Hertz commercial”) because it became obvious to me that they were just out to get publicity for themselves at my expense.  Several attorneys who read the 758-page Forensic Examination wanted to sue the gainsayers for defamation, but I told them that what they did was part of the cost of “getting the word out”.  They can say all they want, but the truth is out there.  Bad press is still press.  So the next time you see those assholes, and you know who they are, thank them for the further misinformation and bad press, because it furthered my cause.

The banks and MERS reacted to it.  Law enforcement reacted to it.  The media was spoon-fed 20-year-old information so they could take up a political agenda against the Osceola County Clerk, Armando Ramirez.  Soon after the reporter wrote the scathing article, he quit the Orlando Sentinel.  The Osceola Sheriff whose detectives I suspect leaked the information to the media in violation of state law did not seek reelection.  What should that tell you?  It pays to fight!

Here’s the thing … we’re Americans.  A large number of us fought and died to preserve our rights under the law for the rest of us ever since the history of this great land of ours began.  Have we forgotten what history has taught us?

The world doesn’t end just because you got “served” with notice of foreclosure … so … I have to wonder why the percentage of homeowners who “run away” is so high.  

It does not matter whether you’re in a “deed of trust” or “mortgage” State, the bank (or its servicer) HAS TO serve you with notice that your home will be advertised and sold on the courthouse steps on a given date in time or in the alternative, if you don’t show up in court, you will be found in default and could lose your home anyway.  Sadly, 95% of Americans who get “served” with foreclosure notices pack up and move.  They run from a fight.  No matter what.  They too suffer the end result of 7 years of bad credit or continued attacks by third-party debt collectors who bought their deficiency judgments from the banks, post-sale because they chose to be a victim.

I refused to be a victim … and I changed my scenario! 

No bank can ever foreclose on me.  I live quite comfortably through my own efforts and not because I “fleeced” money out of disgruntled homeowners on a regular basis.  I pay for this website to post blogs.  I offer workshops that I have to charge for to cover the expense of bringing in attorneys to teach foreclosure defense information to struggling homeowners.  I only do this once a year, when and if the need arises. I saw the recent uptick in foreclosures announced by Black Knight Financial Services and THAT, my friends, precipitated my need to pay attention to trending activity on the part of the conniving megabanks banks who appear to be in control of Wall Street and the secondary mortgage market.

If the percentage of homeowners who ran away from their mortgages (and their homes) was only 25% (and not 95%) … and everyone knew the rules of evidence and civil procedure (as foreclosure mill attorneys do), then there would be no need for me to even continue this blog post, let alone host seminars. However, the uptick in foreclosures has regenerated the need to help homeowners again and this is why there was a need to set up a workshop.  The foreclosure activity against American homeowners will not stop until the banks and Congress have all turned us into a nation of renters and debt slaves who can be controlled by the hierarchy.  The league of those who believe that they know more than we do is called an oligarchy.  Frankly, this “league” is there because they’ve already figured out that if you have money (and lots of it), then they can be in control of not only their lives, but the lives of others also, including yours.

I am still “in the fight” and I am mortgage free, even with my “colored past”! 

You have to understand that at some point in time, through a decisive action plan of steps, you can finally see the “light at the end of the tunnel”.  If we were taught to live by example, then why weren’t we financially educated in high school?  Today’s financial education is still “missing” or “lacking”.  I believe this is deliberate.  Media advertising is still deceptive to a  degree because it lures people into using credit to “buy now and pay later (with interest)” for something they should have saved for all along.  It seems that no one saves anymore.  We are so conditioned to impulse spending we’ve forgotten that principle.  Having equity in a home is also a form of saving, but even equity is FAKE until its realized through the fruition of sale of the property.  THAT should have been the American Dream … but it wasn’t, was it?  Over half of America is NOT prepared for perceived “retirement”.  That’s sad, even though they could do something about it.

Most people who are debt free (or even mortgage free) might simply just ignore the plight of all others who face the perils of foreclosure. So why am I still here?  Perhaps my own personal experiences have been either by best friend or my worst enemy.  I am constantly continuing to research and learn lessons from all of this.

Whatever the case, if you don’t know your rights, you don’t have any!  I may be missing some of my rights, but you do not have to be placed in or succumb to the same situation.  Your first ambition (goal) should be to learn HOW you got into this mess … and then learn HOW to get yourself out of it WITH AS LITTLE FINANCIAL DAMAGE AS POSSIBLE and with as little of a financial risk as possible!

So quit with the “pity party” and start looking for right answers through right thinking … and stop thinking like a victim.

THAT’S STEP ONE! 

Stay tuned for STEP TWO! 

 

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