Tag Archives: Fannie Mae

COVID, COURTS, CIVIL UNREST, PANIC, FEAR AND FORECLOSURES = A COMBINATION FOR DELAY

(BREAKING NEWS – OP-ED) — The author of this post brings you this not-so-humble opinion without the slightest intent of giving you legal advice.  The system has it all set up to favor the attorneys for that purpose, so that’s where you get legal advice.  On this blog, you get news, opinions and suggestive commentary and education, which is perfectly legal because freedom of speech … as I believe we still have freedom of speech … exists in a forum of expression as we know it. 

FEDERAL GOVERNMENT EXTENDS MORATORIUMS DUE TO COVID

The Federal Housing Finance Agency (FHFA) has extended moratoriums on foreclosures and evictions until at least August 31, 2020.  If you have a mortgage that is backed by Fannie Mae and Freddie Mac, rest assured that single-family homeowners got a reprieve, at least temporarily. Roughly 2-million homeowners are affected by this extended moratorium. You can go do a loan look-up on the Fannie Mae or Freddie Mac websites to see whether this applies to you.  I would think by now, you’d know that, especially because you read this blog. You can anticipate that the moratoriums on the federal level will probably continue to be extended as long as we’re in the middle of a perceived pandemic.

STATE GOVERNMENT MORATORIUMS … NOW THAT’S ANOTHER STORY ALTOGETHER

Virginia’s moratoriums ended in May and eviction hearings have resumed. Some 3,000 people are facing being kicked to the curb, mostly for nonpayment of rent. Landlords are reportedly filing lawsuits to overturn the states’ moratoriums, all the while sending tenants threatening letters and text messages demanding rent in lieu of locking the tenants out of their homes. The Low-Income Housing Coalition published a partial list below:

In the following states, the courts have suspended evictions: California (indefinite on evictions), Connecticut, Delaware, Kentucky, Minnesota and Pennsylvania.

In the following states, the governors have suspended evictions and foreclosures: Florida, Indiana, Maryland, New York, New Jersey and Washington State.

In the following states, the legislatures enacted (or are enacting) laws to suspend evictions and foreclosures: Massachusetts and New Jersey (for an indefinite period of time in New Jersey, due to the COVID pandemic).

You should probably check with your individual state’s websites (I’m not going to do all the work for you) to see what moratoriums are in effect and for what purpose and for how long, especially if you’re delinquent in paying either your mortgage or your rent.

In non-judicial states, the banks don’t need the court’s permission to conduct a non-judicial foreclosure; however, where the governors have imposed moratoriums, the banks simply cannot act outside of that mandate.

All of this is because of COVID-19, stay at home orders, lockdowns and loss of income.

Many foreclosure courts have suspended or limited (to Zoom conferences) foreclosure and eviction proceedings because of COVID. Check with your local court to see whether it’s open for business or is conducting emergency petitions as needed.

There are certain states that are definitely NOT homeowner/borrower friendly, where it will be extremely difficult (if not impossible) to get a case fairly decided upon in  the lower court systems without having to resort to the appeals process … my picks are (1) Maryland; (2) Minnesota; (3) Michigan; (4) California; and (5) Washington State.  These are the worst in my opinion, given current case law.  The states that actually have judges who can get past their biases and get to the truth of the matter, or in the alternative, make getting an appellate reversal possible include (my picks): (1) New Mexico; (2) Maine; (3) Tennessee; (4) Florida; and (5) New York (especially in the boroughs). Most of my picks are based on how the courts treat the MERS System® and securitization.  Moreso, it’s about how one approaches the courts and how much attention is paid to their Rules of Civil Procedure and Rules of Evidence. When the judicial prejudices creep in … and you’re not smart enough to object to these prejudices as they apply to civil procedure or evidence, you end up getting screwed with no chance of appeal (all the legal doors are closed) … at least, that’s what the courts want you to think.

In my book, the States that have the MOST corrupt judges are (my picks): (1) Alabama; (2) Georgia; (3) New Jersey; (4) Colorado; and (5) California.  I ranked Alabama first because of its staunch prejudices. Georgia was ranked second because of its history (debtors’ prisons).  New Jersey was ranked third because of several cases I’ve been involved with that should have gone in favor of the homeowner but even in light of the Kemp decision, judges there are all pro-bank … and there’s no getting around that stigma. In Colorado, judges there can get you killed without any remorse from them or political blowback on them.  I base that on the several cases, including the death of Martin Wirth, which seemingly never got justice because the homeowners got boo-f00ed in the Rule 120 courts.

Add COVID-19 to the mix … given the fact that 99% of all government-paid employees … and that includes judges … believe everything their government tells them, even if it has no scientific basis in fact.

NOW THAT WE’VE COVERED COVID AND THE COURTS … LET’S TALK ABOUT CIVIL UNREST

The Mayor of Atlanta (who is of African-American descent … shit … you mean if I’m not politically correct, I’m screwed?) has urged her city’s residents to stop the violence.  21 people were shot overnight, including an 8-year-old girl who was a passenger in a car.  None of the shootings involved police officers, but rather what appears to be black-on-black crime.  How can you even think the BLM movement can sustain its credibility when shit like this is perpetuated?  I see her point.  BLM made their point.  Everything else past that is nothing more than hate crimes against society.  If the anarchists want Civil War (even on a limited basis), those cities run by Democrat mayors are breeding grounds for it because police response has been limited and no one is calling for federal help to stop the violent behavior.  Those in the major cities are probably stocking up on whatever guns and ammunition they can get their hands on and frankly, I don’t blame them.  They see what I see as a potential for spread of the violent behaviors to the suburbs and even the urban and rural areas as anarchists unite to spread their agenda, which rests on NO law and order.

The real problem with BLM is they’ve allowed (collectively) the anarchist movement to infiltrate their ranks and change their “direction”, which had … and is still having … a diametrically opposed negative effect.  It’s driving prejudices deeper underground and making people more “aware”.  It’s enough to be scared of getting COVID, which most have little understanding of it.  But then compounding that with unrest extrapolates that fear mongering into perceived action (uptick in gun and ammo sales).

For every action, there is an equal and opposite reaction.  If the sheriffs can’t grow a pair, the citizens will do it for them by taking matters into their own hands, vigilantism or not.

I was shocked to learn (earlier last month) that the Austin Police Department Headquarters (at I-35 and 8th Street, Downtown Austin), which I visited a time or two as a news reporter-news anchor for KLBJ (the station Pres. Lyndon Johnson used to own), was destroyed by rioters.  Knowing what I know about APD, I’m still in shock and surprised that this was allowed to happen.  It’s no wonder Governor Greg Abbott (who rules the Executive Branch from a wheelchair) is under fire for not doing enough in some areas while doing too much in other areas.  He didn’t do more to stop the violence in his own state capitol.  But then again, Austin’s “Keep Austin Weird” slogan speaks volumes when it comes to indifference.

Civil unrest can be predicated on civil disobedience.  Civil disobedience basically means ignoring government mandates in protest.  The right to assemble is protected by the U.S. Constitution. The right to riot, burn down buildings and shoot people is not protected.  Folks are still blaming President Trump for not doing enough; however, the 10th Amendment clearly reserves those powers not vested with the federal government to be reserved solely for the states themselves. If you’re going to blame anyone, look at your own town Mayor and commission first, then your state reps, then your Governor.  This is where the blame lies on the state level … first.  Not with the President.  Mr. Trump is doing exactly what he’s supposed to be doing … running the executive branch of the United States Government as promulgated under Article 1 of the U. S. Constitution.  You may not like the way he does things.  He’s a CEO remember?  He’s not a politician.  But like politicians, he plays favorites. What politician hasn’t, especially if there’s under-the-table sex involved?

Civil unrest is further precipitated because Americans (a majority of them, you decide if you’re one of them) are quick to place blame on everyone but themselves.  Given what is going on in Atlanta and the fact that 1,000 National Guard troops have been called out there, the BLM movement’s credibility is tanking.  Not only that, the systemic violence has further driven prejudice deeper into the souls of most of the citizenry.  The way I’m starting to see things (and you can disagree if you like), anyone who talks about their rights being infringed upon or oppressed because of their race … is espousing racism.  Anyone who feels as if they’re entitled to free shit because of their race (they got a bad break) espouses racism.  Anyone who thinks they’re more “privileged” than their fellow man because of skin color espouses racism.  Civil unrest and the propensity for it is exacerbated by racist behavior.  Racist behavior begats violence.  Racist behaviors are learned.  They do not occur in the natural state of things. They are taught.  White supremacists teach their kids to love the “white race” and that they are the only race that matters.  Kind of like Hitler.  That’s where the anti-fascist movement came in because every action brings an equal and opposite reaction.  With Congress polarizing America with its inept behaviors, it’s no wonder the “trickle down effect” has brought with it a different, diametrically opposed outcome.

We all have to sit back and examine where we learned these behaviors and why we were taught these behaviors.  I remember my own father taking offense to an activist who was invited into his church in order to survey the congregation to see how many “white folk” would sit down to dinner with a black person.  THIS is how these types of behaviors are engrained into society (and this was back in the late 60’s).  My dad worked with black people in his office (corporate America) and he respected them for what they stood for and knew they had the same opportunities as everyone else to succeed.

But NO!  We’d rather have a pity party and rant about how we were (and are) being oppressed.  Yet, admittedly, certain public figures of African-American descent have outspokenly told their kids how to react when stopped by the police. Now why on earth would they do that?  What precipitated the thought process that cops weren’t human?  Could it be that society gave a gun and a badge to citizens who didn’t (and shouldn’t) deserve one?  One of the most dangerous precepts of a civilized society is to let someone with severely-repressed racial attitudes play God in a squad car with someone else’s life.  We know that behaviors are learned.  Now we have to restructure what we’ve created, take out all the “bad apples” and move forward.

AS TO THE PANIC AND FEAR … 

These two processes drive stupidity.  Panic is what happens when you are not comfortable with the situation you’re in and if something went wrong, you couldn’t cope.  Fear is what it is … False Evidence Appearing Real.  Panic is the precursor to fear because the person displaying the mindset overcome with panic will allow fear to creep in based on the perception of what he sees and hears around him.  Assumptions can get you killed … as much as they can make you a perpetrator.  False beliefs not corrected will jeopardize a civilized society because people aren’t thinking rationally because they’re being “programmed” by what they see and hear on TV (mostly).  This is why cop shows and violence-filled sitcoms are more popular because people are being “conditioned” and “desensitized” to what is really happening in the real world. This is how governments take advantage of their citizens.

FORECLOSURES … SAVING THE BEST FOR LAST … 

While foreclosures are no laughing matter, being in denial that they could occur in one’s life is fundamentally bad for society, especially in communities where they are randomly prevalent.  Knowing your financial position in life should be your first priority because it is how you are able to develop a Plan B.  As much encouragement as I can muster here, nothing can compensate the loss of a home, especially if it has a lot of equity in it.  This offers you (if you’re in that position) a unique opportunity to get yourself upright and mortgage free!

A reader of my blog called me one day to ask about fighting a foreclosure on her rental property.  I asked her to weigh the possibilities based on the facts.  She had $150,000 in equity in the home and it was rented.  It’s just that with COVID, her renters weren’t making the payments, so the renters decided to vacate at the end of the month.  I asked her to evaluate the stress that would be added to the equation if she were to compare the monthly rent versus the amount spent in litigation trying to save that monthly rent. We both came to the conclusion that while the market was short of inventory, NOW would be the time to sell the property, pay off the note (and stop arguing whether the lender screwed you or not), save the stress, take the equity … and find a place in the country where you can park that equity and live within your means or at best, mortgage free.

People get frustrated examining situations like this because there are options to litigation but they won’t entertain them, even if it means simply staying put in your home (that’s going to be foreclosed on) while trying to make a Plan B work. Nope. That’s their home and they’re staying put until the sheriff kicks them to the curb.  That’s the opposite of why I started this blog in the first place.  If you had 10 rental properties that were all going to be foreclosed on, but they could bring you a net equity of $25,000 each … sell them, take the $250,000 out of the deal and restructure your life with it.  The Chapter 11 case in Tampa that I wrote about on this blog in earlier posts, where 52 properties were put into the BK and a fourth of them had their liens disallowed by the court and they did cram downs on the rest of them and got an angel to buy the paper on the remaining properties and refinance them all at a lower rate cost $160,000 to complete.  You can only do this if you have the reserves.  It’s a great Plan B and the judge loved it!  It was the chief judge too!

But seriously, how many people have 52 houses to put into a Chapter 11?   You have to scale down those factors and figure your litigation costs, whether you’re going to answer pleadings pro se … plan on how much time you need to “re-group” … and execute on your plans.  The bank doesn’t have to win the way they think they should. You can win by flushing your equity out ahead of time, scaling down … and restructuring your life.

With COVID-19 and the courts being stymied, you do have time to act.  However, this “pandemic” isn’t going to last forever and at some point, you will have to face the music.  How you deal with it is what makes you a winner or a loser.

As a parting thought … DON’T TAKE A VACCINE THAT YOU DON”T KNOW WHAT’S IN IT!  They’re looking for “test subjects” now and I’m not sure they’re paying. Not a good plan if you intend on enjoying any plausible future, eh?

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Filed under BREAKING NEWS, OP-ED

AMERICA BRACES FOR MASS FORECLOSURES AS ECONOMY RE-OPENS!

(UPDATE: SEE ADDENDUM TO THIS POST AT THE BOTTOM!)

(BREAKING NEWS — OP-ED) — The author of this post has spent the last 12 years researching securitization, foreclosure issues and other consumer-related, debt collection topics.  The opinions offered here are the authors and should not be construed as legal advice. 

FOR MANY BORROWERS, THE SHIT WILL HIT THE FAN! 

As expected, I’m getting backchannel feeds on the serious uptick in foreclosures, especially in the GSE-related foreclosure arena.  So here’s the immediate concerns, based on my current research:

  1. The government (through Congress) issued a moratorium on foreclosures due to the corona-crisis.  You can anticipate that it’s the calm before the storm because when the moratorium is lifted, the mortgage loan servicers for Fannie Mae, Freddie Mac, Ginnie Mae and conventional lenders have already made plans to ramp up on those lulled into a false sense of security. Congress will not interfere with the “pulse of the economic backlash” when it comes to the government’s own interests, FHFA or not.
  2. The mortgage loan servicers have been paying advances to the GSE’s REMICs (Real Estate Mortgage Investment Conduits) since Congress imposed the moratorium. Under their contracts, the servicers and/or subservicers  are required to pay investors the principal and interest on every loan alleged to be in “default” under the terms of the mortgages and deeds of trust these mortgage loan servicers are collecting payments from borrowers on that are allegedly contained within the REMICs.
  3. The longer an extended moratorium lasts, the more “in the soup” the servicers become because their surplus funds accounts they use to pay the advances with are being further depleted and they would logically be forced to “borrow” from everyone’s escrow accounts (“rob Peter to pay Paul”) to make good on their contracts, knowing full well that when (not IF) the moratorium is lifted, they will force the shit to hit the fan in order to foreclose, sell and reimburse themselves for all their losses.
  4. Those who have been able to make their mortgage payments every month despite the moratorium might want to check their escrow accounts to make sure they are solid and accurate and haven’t been “borrowed from” (the “robbing Peter” side of the equation). The servicers will emphatically deny they’ve raped every account they could grab money from; however, if notations aren’t made of the alleged “robbery”, how would the servicer actually know WHICH ACCOUNT they borrowed from, meaning the innocent borrowers who’ve made their payments every month will see a shortfall in their escrows, which could inadvertently put their accounts in default, which in turn could force borrowers to have to make up the shortfalls (through no fault of their own) to make up the difference to bring their accounts current.  This may be one of the reasons that Ocwen Loan Servicing and its parent issued $600-billion in securities to shore up their “advance” payments.
  5. Because the moratorium is set for 60 days out, whatever delinquencies occurred during that time will be calendared for default on that magic date I’ve talked about before … DAY 91!  Expect a rash of threatening letters from the mortgage loan servicers to borrowers in trouble as they push their collection activities forward another 30 days past the moratorium to hit that magic date!

DAY 91 FACTORS INTO THE ACCOUNTING, MORATORIUM OR NOT! 

It matters not whether you were given a “grace period” with this moratorium, the mortgage loan servicers are in business to make money by foreclosing on properties they can’t resolve; thus, if you don’t have a windfall to bring your loan delinquencies current, it will trigger DAY 91.

Prior to “DAY 91”, you may see the following actions taken by the mortgage loan servicers:

  1. DSNews is already reporting intended aggressive pricing on foreclosed properties to sell to third-party investors as quickly as possible.
  2. Anticipate MERS-related documents, particularly REMIC transfers and indirect transfers to the servicers themselves, as a means of justifying the upcoming foreclosures, which means those assignments are going to hit the land records just prior to the start of the actual foreclosure process.
  3. The faster the servicer can sell the property to the third-party investor, the faster it can convert title to the GSE “after the fact” and “lose” that REO inventory to the new buyer (with transfer of title) before the homeowner even knows what hit them. The GSE will then do a direct title transfer (through the mortgage loan servicer) directly to the third-party investor who will assume all risk of acquisition of a property stained by title issues.

THE GSE’S HAVE REMICS TOO!

One thing most people don’t realize (and this can be verified) is that the government sponsored entities set up REMIC trusts to obtain investor money they use to back the loans they guarantee.  If you’ll go to irs.gov and type in Publication 938 for 2009 forward in the search engine, you’ll see the listings (by quarter) LOADED with GSE-backed REMICs!  Depending on what year you took out your loan is the year you’d search for on that website, plus subsequent years in case your loan was traded into another related REMIC until trading stopped within the MERS System®.  The securitization process is a virtual “shell game” until the foreclosure starts and the roulette wheel stops on the particular REMIC the servicer is paying.  The servicer will then move toward the final DAY 91 objective … to cash in on the credit default swap, default insurance, PMI, LMPI or whatever other cash cow it can get its hands on to reimburse itself for all of the advance payments it made during the absent of the borrower’s payments.

In the meantime, Fannie Mae and Freddie Mac are now going to buy home loans going into the government’s forebearance program just after they close, something neither had done before, in order to provide liquidity to the mortgage markets so originators can keep lending.

So as not to keep regurgitating a point, I put a news story in the top link so you can see where the forbearance programs are headed.  The CNBC article (above) affirms everything I’ve been saying … as noted in the following paragraph:

“The four-month servicer advance obligation limit for loans in forbearance provides stability and clarity to the $5 trillion Enterprise-backed housing finance market,” said FHFA Director Mark Calabria. “Mortgage servicers can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment.”

So you see, the servicers took a gamble on the advances and went into the hole doing it … and the government is in bed with this.

Some friend the government is, huh?  They claim to give you relief yet who’s really getting relief?  The banks and their minions.  The Fed claims to have loaded $2.3-trillion into the economy, yet where did that money go?   Not into our pockets I can assure you.

Know this … no matter what administration is running the United States, the end result is the same … protect the government at all costs … screw the dumb-ass taxpayer who doesn’t know any better (the way “they” think).  These Congresspeople think they know more than you do. Could they be right?  After all, who’s the smarter … the ones who got elected or those who elected them?  Based on what promises?  The existing Congress, a majority of whom have been serving for decades, have done their best to protect their power bases while kicking the can down the road … in the name of politics.

And we collectively let them do it.  We have collectively fallen for their bipartisan, two-party, political crap.

Congress made a deal with the banks … to protect the banks … it’s in 12 United States Code … Banks and Banking.  Congress has repeatedly let the banks screw us.  And we collectively keep letting them do it.  When is the merry-go-round of craziness going to stop?  When we have a civil war?  Or maybe a revolution?  At the polls?  Or in the streets?

And we should not worry about the mortgage loan servicer’s accounting practices, right?

IF YOU’RE NOT IN DEFAULT, HOW IS IT THEY’RE TRYING TO FORECLOSE ON YOU?

All the while the moratoriums have been in place, the servicers were stuck paying the advances on the mortgage loans, whether borrowers paid their monthly payments or not. Now the piper is coming to collect. If you didn’t (or couldn’t) work out a forbearance proposal or loan modification during the time you were a shut-in, the foreclosure process (unknown to you) was probably on the back burner and now things just got fired up again.

Those in non-judicial states will be suffering more dramatically as they try to figure out how to cope with aggressive mortgage loan servicer activities in stopping courthouse step foreclosures by publication and sale.  These borrowers are in a definite time crunch as they don’t have the luxury of court hearings unless they create them through the filing of a lawsuit. That means money spent out of pocket in order to stay in the current “survival mode” we’re already experiencing as the economy starts to bounce back from quarantines and lockdowns.

Those borrowers residing in judicial states will ultimately “have their day in court”.  It will be a 90-120 day average by the time the case gets to trial.  Keep in mind that most courts will be closed until at least mid-July 2020, so the uptick in foreclosures will probably start after the 2nd quarter ends (in 2020).

But if the advance payments were being made … how is it you’re in default and the investors have been harmed?

That’s something the banks and their servicers say is not up to you to decide … as you don’t have a contract with the investors!

You have a contract with the originating lender, which in a securitized mortgage … is a corresponding lender!

And logically, you’re going to be searching the land records trying to find that pesky assignment, right?

But wait!  The servicer’s attorney’s are going to argue that you’re not a third-party beneficiary; thus, you don’t have a right to bring a claim against the assignment.  How is that relevant?  Your name is on the assignment, right?  The originating mortgage or deed of trust is referenced on the assignment, right?  Who said anything about being a third-party beneficiary?  You see … this is how the bank’s attorneys get the courts to agree with them, because your loan was securitized and you and the investor have no “nexus” or commercial connection to each other.

POTENTIAL SOLUTION … ATTACKING THE DOCUMENT ON DIFFERENT GROUNDS!

We are starting to see results in the use of the C & E (Cancellation & Expungement) Action as a viable way to throw a “monkey wrench” into the grind of the foreclosure machine.  The questions about this process vary but the crux is the same … what is it and how does it work?

In a brief step-by-step process …

  1. The borrower goes to the public record and obtains an office copy and one certified copy of the assignment(s) in question.  These are the suspect assignments, which may contain up to a dozen or so false statements and/or misrepresentations.
  2. The borrower then researches and procures evidence showing the statements contained within the assignment(s) are false and/or misrepresentative. You can bet that no right-minded cop or detective is going to investigate anything without being fully “briefed” on the subject matter showing why you believe the public record to be false and misrepresentative, constituting a felony recording under most state statutes.  Developing harder-to-find evidence may require the services of a private investigator.
  3. The borrower (still on title, generally) goes to the local police department and files a criminal complaint on the assignment(s). The complaint filing is designed to generate a police department case number.  The borrower can be expected to spend time with a detective or officer explaining the nature of the complaint, which is most likely going to be hand written on their complaint form. You can do this before or after you file (or respond to) a foreclosure action.  I generally prefer to do it BEFORE I file the action, that way, I can include the criminal complaint in my civil action for damages.
  4. I file a declaratory relief action against those responsible for the assignment(s). I would suggest following the criminal statute religiously and if applicable, couple it with the consumer protection act statute individually for the State (of the Union) I’m in, in a claim for damages.  I do NOT sue for wrongful foreclosure because the foreclosure hasn’t occurred yet.
  5. Make sure the other side’s lawyers get the criminal complaint included with the exhibits.  This not only lets the court know a crime may be connected with the foreclosure filing, but that the attorney for the servicer may be held as an accessory if they keep trying to insist the document is legal. No right-minded attorney, bank lawyer or not, isn’t going to risk being disbarred for going up against a criminal complaint.  If anything, it will certainly “shake them up”, possibly forcing a settlement.
  6. Make sure all parties (the party who prepared the document, the party who executed the document and the party who notarized the document) are served.  I find suing the servicer themselves is a moot issue if the foreclosure hasn’t occurred yet.  If the servicer sues and you find the assignment in question was prepared or ordered by the servicer or its law firm, then the law firm, if it prepared the assignment(s) are also named defendants because they knew or should have known that the information was false and/0r misrepresentative.  Include the law firm and the lawyer who prepared the document in the criminal complaint.
  7. If at all possible, keep the civil action and the criminal action going simultaneously.  Do not drop the civil complaint if the DA decides to prosecute the document and those responsible for creating it and recording it, in violation of the penal code.  By dropping the civil complaint, you’re sending a signal to the DA that you’re not serious about pursuing damages.  Two-pronged attacks are better than one.
  8. Prepare your deposition list.  You’d be surprised once you start moving for depositions of the parties involved they don’t come at you with a settlement, rather than risk a criminal complaint against them moving forward, thus reinforcing the civil action in the judge’s mind as being even more legitimate.  Do not hold back on the other side’s lawyer if the law firm prepared the document(s) that are suspect.
  9. Follow the court docket religiously.  That means twice a day for the entire duration of the lawsuit. Once in the morning and once in the late afternoon, before the court closes.  The other side will wait until the last minute to file stuff to screw with you, especially on Friday afternoon, when they can buy time over the weekend to screw with your calendar (your time off relaxing) and your ability to respond to their motion or brief.
  10. Be prepared for oral argument.  You never know when you’re going to get called into a hearing to determine the validity of your lawsuit. The judge may also query law enforcement to see what they’re doing about your criminal complaint.  In one instance we’re aware of, the local police department forwarded the complaints to the DA … AND the State Attorney General’s office for follow-up!  Also, make sure you have expert witnesses lined up that can validate both your criminal and civil complaint information.

I know we haven’t taught HOW to set up the criminal complaints in our regular C & E classes; however, this new injection of the police report does add a certain flavor of suspicion in our civil claim, don’t you think?  Imagine the consequences:

  1. The attorney handling the foreclosure matter attempts to interfere with the criminal investigation of the matter and ends up making the matter worse, potentially putting himself in a position of obstruction of justice.  The attorney for the bank cannot attempt to persuade authorities from looking into your complaint without lending suspicion of them being involved.
  2. The law firm or the attorney preparing the document ends up being indicted by a grand jury as part of the grander scheme of things.
  3. The judge handling the civil matter is found to be “side dealing” and interfering with the criminal case in order to further the civil case along to help the bank out, either through direct interference in the criminal investigation or by pushing the civil case forward in favor or the bank knowing a criminal prosecution is likely, which would make him an accessory to a felony … enough to remove him from the bench and potentially put him in prison!

There is also a potential chance that the criminal investigation will go nowhere because the investigators: (a.) weren’t provided with enough evidence or information by you to establish probable cause; or (b.) didn’t understand the nature of the complaint because of the way it was presented.

I have 18 sets of the C & E class (8 DVD-video set and the book, The C & E on Steroids!) available online on the Clouded Titles website.  Once these are gone, they will take time to re-order, more time than you might have. I don’t have to tell you that following this moratorium’s end, those in trouble … their days are numbered.

Remember, when you get the kit, I give you an hour of consulting on your specific case, which may include a call to a criminal attorney who can give me ideas as to how to posture your criminal complaint based on what evidence you have! 

UPDATE ADDENDUM:  As I mentioned on City Spotlight – Special Edition on WKDW-FM, which will repeat this coming Monday, May 4th at 2:00 pm. Eastern Time, CLICK HERE TO LISTEN, attorneys now have a duty to inquire whether the client is using their case to commit fraud or some other crime upon the defendant in a suit.  The American Bar Association’s Standing Committee on Professional Responsibility has issued Formal Opinion 491, to clarify this requirement in the wake of increased reporting of individuals using legal services for money laundering and terrorist financing.  But it goes beyond that definition, especially if the attorney(s) or their law firm participated in the drafting of the bogus assignment and then had it sent back to them once it was executed and recorded.  This is a way to: (a.) name the law firm in the suit; (b.) name the attorney in the suit; and (c.) force the attorney to inquire as to whether he knew before submitting the document to be executed that it contained misrepresentative statements, which could warrant criminal legal action against him and/or his firm.  This is where things get dicey for the other side because depositions and discovery can now target counsel who participated in any way in the drafting, execution and recording of a document that could be construed to be a third-degree felony in many states!

Here’s the formal opinion: aba-formal-opinion-491

 

 

 

 

 

 

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FANNIE, FREDDIE AND MERS: RECIPE FOR COLLUSION TO SCREW AMERICA!

(OP-ED) — The author of this post is a consultant to trial attorneys and author of Clouded Titles – Mayday Edition, which exposed the corruption in banking in tandem with darker forces within the U.S. Government to fuel the largest housing grab America has ever seen.  The opinions expressed here are his own and do not constitute legal advice or seek to draw and conclusions of law. 

There has been a recent unveiling of sorts that discusses the conflict between the two GSE’s (government-sponsored entities) and MERS, which clearly shows who in fact spearheaded the push to turn the secondary residential mortgage market into a lying, conniving, deceiving bunch of thieves that have promulgated the use of electronic promissory notes (“eNotes”), which are uploaded into an electronic database called Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”), which, at its conception, was owned by MERSCORP, Inc.   Both of these entities were Delaware corporations based in Reston, Virginia.  But no longer.

After being merged into MERSCORP Holdings, Inc. in February of 2012, nearly seven years into the eRegistry (the database itself, which operates electronically to store information on the mortgage loans; e.g. the note and the security instrument), MERSCORP Holdings, Inc. was acquired by Intercontinental Exchange, Inc. (hereinafter “ICE”), which also owns the New York Stock Exchange.  All of MERSCORP’s Reston, Virginia operations were moved to ICE’s data centers in Mahwah, New Jersey, where they exist today.

Collectively, MERS members pay $7.95 every time they enter a transfer of the eNote and its accompanying paperwork in the MERS® System.  Herein lies the rub.  The banking industry, in at least one letter to a judge (in 2009, in Florida), has admitted that once the paper “notes” are uploaded into the MERS® System and become “eNotes”, they don’t need the paper notes anymore and thus, they brag about shredding them.  On another note, there are “archives” all over the country that the megabanks claim hold the originals of the notes and mortgages, available within a reasonable time frame (to be retrieved) as a mortgage foreclosure case develops and the documents are called for.  But is that really the case?  What if these documents were actually “downloaded” from the MERS® System, printed out, and claimed to be (by the lender’s/servicer’s) the originals?

eNotes versus the Uniform Commercial Code (the “U.C.C.”), UETA and e-Sign

This recent article, authored by lawyers within the law firm of Dorsey & Whitney LLP, unveiled an eAlert which seeks to address potential issues which I thought might be useful for you and your attorney to know, or should they?  Due to the nature of the banks and their attorneys to play games with us and misdirect us at every turn with their propaganda … this article, whose link can be found here …

Potential Issues for Warehouse Providers with Electronic Mortgage Notes | Dorsey & Whitney LLP – JDSupra

… could be one major misdirect, according to our UCC guru Bob Janes, author of SHELLGAME MERS, Contrived Confusion, which can be found on the Clouded Titles website!

Here’s what Bob has to say about this article:

This paper shows an ignorance of negotiable instrument law and its interaction with Art 9 of the UCC. It appears to be a continuation of the effort to give appearance (operative word) of merit to the MERS system and the mortgage finance industries desire to profit by ignoring existing law and creating an sham appearance that might be able to help take people’s homes in future foreclosures without adherence to applicable law.

Secured interests under Art 9 are trumped (or is that a dirty word now?) by Art 3.  Only the person entitled to enforce the negotiable instrument has a right in the collateral (mtg or dot).  Whether the name of that person is in the chain of title for the mtg/dot is not important. 200 yr old common law, now codification by 9-203(g) are in unison: the collateral pledged to secure payment of the debt under a negotiable instrument always belongs the person entitled to enforce the debt pursuant to Art 3 of the UCC.  This paper does not address nor even encourage that the new e system design compile factual information necessary to determinations of enforcement right under the negotiable instrument law of Art 3.  The paper’s discussion of ‘perfection’ and ‘controller’ are irrelevant to determination of enforcement right under Art 3.  The paper shows no understanding of the importance of ‘possession’ of the note under negotiable law nor how and when possession is connected to the right to enforce the note.

The paper’s discussion of ‘holder in due course’ (“HDC”) also reflects the author’s ignorance or desire to misstate law.  The many elements of status as holder in due course are not addressed, nor is the system of maintaining eNote or eVault  requisite information/proof of the legal elements necessary to the right to enforce the note.   HDC is a subset of holders under the UCC.  Any person entitled to enforce the note pursuant to 3-301 (holder, nonholder in possession with rights of a holder, a person not in possession but with overwhelming evidence of having been the holder or nonholder entitled to enforce when the note was lost, stolen or destroyed) has priority rights in the mtg/dot regardless paperwork ‘perfection’ under Art 9.

The paper does not address the subservient role of Art 9 to negotiable instrument law and enforcement rights of Art 3.  This paper neither discusses the article 3 requirements for a person to be a holder in due course, nor does it demonstrate that information gathered and retained by the e-system will be useful in determining who has a right to enforce the note, and thereby, to enforce the mtg/dot.

Whether or not the enote/evault system becomes a reality, the homeowner defense against negligent or fraudulent foreclosure remains unchanged as long as the UCC remains as currently in the statutes of every state.  Merit requires discussion of the Art 3 detail necessary to establish enforcement rights in the note, and this paper is without demonstrated knowledge or effort to address the Art 3 requirements, policies, etc.

What do I think of this paper?  Not much.

The Continued Screw Job! 

So you see, Fannie and Freddie continue to peddle their toxic paper into our economy, further screwing with chains of title all across the country with every property their servicers stole on the back end of the foreclosure, which ended up getting transferred to Fannie Mae and Freddie Mac. You only see these two hoodlums on the back end of foreclosures, as they certainly wouldn’t rear their ugly head in the middle of one for fear of giving the government a black eye … and we wouldn’t want that now, would we?

It’s bad enough we have politicians polarizing America and screwing up everything they touch!  They don’t have the decency to quit interfering with the housing market by continuing to allow Fannie and Freddie to exist.

What’s worse, judges don’t really care about the UCC and are quick to misapply it.  Those who aren’t smart about what the UCC says (and turn their lamebrain lawyers loose in the courts repeating this bank’s diatribe) are sure to lose.  Yet we keep going to banks that don’t portfolio their own loans and keep doing business with them.  That’s on us!

 

 

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FDCPA CAN STILL APPLY TO NON-JUDICIAL FORECLOSURES!

(OP-ED) — The author of this post is the author of The FDCPA, Debt Collection and Foreclosures … and posits the following for educational purposes and for your consideration in the paradigm shift that has now become the focus of thousands of consumers.

I’ve noticed an uptick in the number of pro-bank/pro-debt collector law firm postings regarding the U.S. Supreme Court’s latest narrow ruling in the Obduskey case (out of the 10th Circuit Court of Appeals).  I love how these folks like to “pat themselves on the back” for their observations that non-judicial foreclosure proceedings can still be business as usual, despite the caveats their posts now contain.  Why on earth would they post “caveats” to the debt collection industry (which includes law firms like the one Dennis Obduskey filed an FDCPA action against) if they were so sure of themselves in being able to just walk all over borrowers they claim are in default?

Despite the fact the nation’s highest court resolved the federal circuit split on whether non-judicial foreclosures can continue as “business as usual”, the ruling was “narrow in scope” regarding the enforcement of security interests as defined under 15 USC § 1692f(6), which is what the Court focused on in its decision: Obduskey v McCarthy & Holthus LLP, 586 U.S. ___ (2019)

What Congress intended … 

Creditors used to love the idea that they could open up a can of “whoop ass” on debtors any time they felt like it, even late-night, repetitive or threatening phone calls (“I know where you live” and “your mommy’s going to jail” and “we’re going to sue you if you don’t pay” or “we’re going to bomb your office building if you don’t come down here and pay this bill” or “you !@)#(%^!”.)  The caveats I’m seeing in these law blog posts still make reference to the fact that the latest FDCPA-related ruling DOESN’T mean “business as usual”.  It simply means that debt collectors trying to enforce deeds of trusts have to be extra careful NOT to step over that well-defined line of intended “abuses” that do in fact, fall under the FDCPA!

Enforcing a recorded security interest (deed of trust, security deed, HELOC, etc.) in a non-judicial state means just that.  If a third party (the trustee, NOT MERS) intends on using the terms of the security instrument to act as the third party in taking back collateral, the collection activity has to specifically and purely involve that process.  The narrow ruling still prohibits abusive debt collection practices, whether or not a non-judicial foreclosure is still the intended outcome.  The abusive debt collection practices fall under 15 USC 1692d and 15 USC 1692e, as well as portions of 15 USC 1692f (1) through (5) and (6)(B)(C) and (7) and (8).  See here for clarification: FAIR DEBT COLLECTION PRACTICES ACT 09-1996

If you have a case … you have a case … 

Every time the debt collection industry scores a narrow victory, they pontificate their accomplishments as soon as humanly possible, almost to the point of bragging rights (see, I told you so … lemme rub your nose in it) kind of stuff.  This is typical of the legal profession, especially the kind that can operate unchecked when it comes to carrying out enforcement actions.

One of the more remarkable things I find is that all non-judicial foreclosures are assumed to be legal unless otherwise challenged.  One of the things I put forward in the book (mentioned above) is that careful analysis of the debt collection laws needs to be strictly adhered to (the letter of the law), which you are attempting to assert was violated.

How the “chain of title” points to potential suspect violations of 15 USC 1692e(5) … 

Here’s where the latest ammo we’ve been sharing on the C&E comes into play.  Cancellation and expungement (C&E) actions are used to disable and destroy the authority these debt collectors rely on to even enforce a security instrument.  Under “False or misleading representations” (§ 807 of the FDCPA), section 5 prohibits false, deceptive or misleading representation in threatening “to take any action that cannot legally be taken” … which would mean to me that if you could strip away the lies contained within the assignments that generally precede the initiation of a non-judicial foreclosure action through a C&E, the authority of the debt collector would be void and the debt collector’s representations would then be false and misleading, which IS a violation of the FDCPA!

Champagne budget … Beer Belly Pocketbook! 

A C&E action is definitely a cheaper way to wage war on an unsuspecting servicer (who is really behind the scenes of the debt collection/non-judicial enforcement proceeding), stripping away whatever rights it thinks it has to steal your house on behalf of party or parties unknown (which could be Fannie Mae or Freddie Mac, lest we hold the GSEs unaccountable in the end) than waging an all-out FDCPA battle in federal court, which costs substantially more money.  Try to keep the emotions in check for the moment while I finish.

The document the servicers are creating is the assignment of deed of trust (much like the assignment of mortgage), which they claim gives them the authority (on behalf of the alleged “lender”) to appoint a substitute trustee to initiate a non-judicial foreclosure.  Do you have a contract with the mortgage loan servicer?   (Didn’t think so.)  However, servicers have Limited Powers of Attorney, which they claim give them the authority to do whatever they want, including wading into the shark-infested waters of violations created under the FDCPA.  Strip away their authority under the assignment as void … they’re like “chum in the water”.

This is why I’m releasing a two-day training video DVD set with the latest book by attorney Al West and myself, The C&E on Steroids! in very short order.  What better a way to deal with America’s tainted real property records than to fight the good fight head-on in state court, rather than wage a flimsy, unsupported war in federal court without first demonstrating the ultra vires behavior of the trustee thanks to a phony assignment, which you’ve knocked out FIRST in a C&E action!

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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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