The Real Estate Sage at The Real Estate Investment Institute - REII

I am an American!Not a schizophrenic hyphenated dysfunctional, ethnic freak. I am a Euro-centrist, there is no other logical explanation for the American miracle! My Great, Great, Great Grandfather Jacques emigrated here from France in 1608, for freedom to practice his religion. Jacques's son Anton was the father of my Great Grandfather Robert Stephen Saxby Archambault, who fathered my Grandfather, William Jennings Bryant Archambault. I'm proud to be William J Archambault Jr named for my father.

There are at least four parts to the "American Dream."

Jacques like the Pilgrims that came here in 1620 came for freedom of religion, not as so many are now are mis-taught, freedom from religion! The Puritans among the Pilgrims (only about 40%, on the Mayflower) were indeed persecuted by the Church of England, emigrated not to abandon God and Religion, but rather to gain the freedom to practice their own Religion.

Other's came for the right to own their own land, in deed a home of their own! Escaping a Feudal land system where all land was owned by the anointed few "Lords" at the top. A system where the most a man could hope for was a benevolent landlord.

Others came for political freedom. Not only did the anointed few "Lords" own the land they controlled the government and owned your very lives. The differences between "Freeman" and "Slave" were small. The anointed few controlled the "Freemen" by flicking them a bone with a stick, the slaves were simply flicked with the stick! Indeed the biggest difference from the "Lords" point of view was that "Freemen" took less supervision, for like the slave it's easy to control dependent people. Many today have forgotten this simple universal truth, and would willingly resubmitted to government dependancy. Many already have!

From the very beginning some came seeking prosperity, pure and simple capitalism! Wanting nothing more than to make a profit off their labors.

Until very recently it's these four simple ideas in various combinations and slight variations that were recognized as the "American Dream!"

The "Dream" varied. To some "Freedom of Religion" meant not practicing or vocalizing Religion. Others would perverted this very freedom to impose the same intolerance the Pilgrims came here to escape, often religiously practicing non-religion. A home of your own, which at the start meant land sufficient to support your family, became a home in town, others sadly, accepted a warm, dry rented apartment as their dream. Politotical freedom  some simply, shamefully, means accepting anything just to escape their previous oppressor. Prosperity, too has had it's variations, to some building our rail roads it meant pennies for their labors, to others it simply meant enough potatoes to feed the family until the next crop. Indeed during our worst depression FRD won the Presidency setting a National goal of "a chicken in every pot!"

Many of these dreams don't sound very lofty today, only because we have forgotten that America was virtually the only place where they were achievable. To all the dream meant becoming an American.

After World War II with our freedom and prosperity a universally accepted fact and political freedom reassured by the 22 Amendment limiting future dynasties. The "American Dream" became universal accepted as a home of our own. In deed as we struggled with our conscious through the Civil Rights battles of the 1960's the "American Dream," universal home ownership was reinforced and expanded to actively included all those among us. In the 1990's we expanded home ownership beyond any previous society, but because a noticeable percentage of a very small percentage of home owners failed, there is a rush to limit future attempts at universal home ownership! In an attempt to regain control the politicos are attempting to surrogate us into total dependency and return us to control of the anointed few.

In the next installment we're going to talk about credit! Credit is the most missed understood tool necessary to achieve the "American Dream!" In the third instalment we're going to talk about when and how to get your piece of the "American Dream."

Bill

William J Archambault Jr

The Real Estate Investment Institute

Steven Leitman, wrote a short little blog: Short Sale Tip I commented on it because, I'm concerned about real estate advice coming newspapers. One of the comments was addressed directly to me, here is my response.

Mr. Ross,

I'd like to answer your question, but I don't think we have a common language. You and I use the same words but we don't use the same meanings.

With regard to defaults and "Short Selling" it's always an individual thing with the lender. The market is a huge consideration but the individual debtor is more important! Is the individual collectable? Can the bank recover more from a "short sale" than from the foreclosure and the collecting on the default from individual debtor. The decision is all about what's best for the bank.

You combine "Lender/Servicer" while this is often the case, it's not always true in which case the "Servicer" get's paid for their service. Again you generalize about what's best for the lender and again about the market in mass. I don't know what current rates are for portfolio sales, I do know that every basics point, 1/100 of 1%) can mean huge differences in the sale price of a portfolio. It's the value of those points that motivated many lenders to hold their portfolio just a little bit to long. We had conforming lenders making the same mistake, and going under about 15 years ago.

You then talk about "Predatory" servicer with regard to a pure servicer this makes no sense. You then dispute the term "Bank" well lender might have been more descriptive. You then talk about "Predatory Operations" and intermix this with "debt collectors," we don't have a common point of reference. By misuse of the term "Predatory" nothing anyone can say will make any difference, you've made up your mind.

For the record "Predatory Lender" is a term coined to explain lenders who made loans planing to foreclose and acquire the properties themselves. Lumping all lenders together is pretty harsh because the overwhelming majority of sub-prime borrowers have succeed and own their own homes. Those lenders loaned real money to give people the opportunity to own their own homes, not to turn $100,000.00 real dollars into $$70,000.00 deflated dollars.

You concluded: "The seller/owner who is in trouble financially can decide to require that the lender/servicer sign a release or waiver agreeing not to pursue the seller in any way through a 'Deficiency Judgment' or 1099 or the owner/seller's option is not to agree to the 'Short Sale'. At this point the only advantage for the seller could be to remain in the home for as long as possible accruing whatever monies he can to survive. The idea with Short Sale is to avoid foreclosure which would cause the negative reporting to the credit bureau. The Short Sale only becomes a win, even though a sad one, for the seller if, at least, he can salvage his credit even though he loses his home!"

The "seller/owner" can ask for anything, he wants, the lender can demand all their money including accrued interest and collection cost. The tax matter is not up to the "seller/owner" of the lender is there is debit relief there is a tax liability. If the seller remains responsible for any deficiency balance it's a "release of collateral" not a "short sale."

A "short sale" is almost always good for the debtor/seller, they are a feasible real estate tool when it's also good for the lender.

I hope this helps, your comment is the reason for my concern about taking real estate advice from newspapers. The madia have made it PC to be a victim, there was a time when if people defaulted they did their best to hide their shame, now there is no personal responsibility or personal shame. Thanks to the news, people are not facing their problems, because they are to busy being the victim. Yes, I'm sure there are some who were cheated, but the majority just defaulted. To hide their sham, Congress is trying to keep many people from owning their own homes. It makes sense, you don't find many connectives in government housing. Have you ever compared the cost of rent with even the highest sub-prime loan.

Bill

William J Archambault Jr

The Real Estate Investment Institute

Our local television and radio are loaded with commercials for Bankruptcy Attorneys, Not-for-profit Councilors, and Real Estate Sharks seeking to fleece and destroy Gullible Home owners! Using "shock and aw" miliary type tactics to harvest equities and shear the sheep! Incompetent and evil real estate "ho's," with out the knowledge and/or support to evaluate and advise their clients, destroy home owners and pollute the market they share with the true pros!

I teach opportunity real estate investing, but you don't have to read much of my ramblings to know that I believe in taking advantage of opportunity not people. There are more legitimate, desperate sellers than at any time since before WW II! There are plenty of people that should and will accept an investors offer for a quick sale, without the lying and scare tactics, so do it right!

A year ago last September I published "Beat The Sharks" one of my tactics for buying under market and the safest of opportunity real estate investing. In today's market lenders holding seconds behind delinquent first should be willing to accept huge discounts to recover something with out risking additional investments. Dealing with business people, I don't have to compete with the sharks, I just have to sunrise them when I demand full face value for my newly acquired note, plus all accrued interest, charges, and cost! There is always more than one way!

Beat The Sharks

Everyone who has ever dealt in the shark infested waters of foreclosure and pre-foreclosure investing knows this is not no money down real estate. The "Big Profit" "Big Trouble" world of foreclosure real estate is dominated by the "Big Sharks," actuality, most often they're would be Sharks, people with no social conscience, who are willing to deceive the trouble home owner, saying anything and delivering little or nothing, to steal the home owners' remaining equity. The other Sharks, yes you're a Shark, more likely a would be Shark, are second only to finding opportunities as the biggest obstacles to small real estate investments.

There are only three ways to beat these predators. First get to the troubled home owner/seller first. Second always start with a win-win offer, always put enough in your offer for the poor seller to start over, make it oblivious how he wins. Personally I prefer "Net Offers" because they show the seller exactly what he'll leave the closing table with. (I advocate "Net Offers" in three of my books, "One House At A Time / Finding And Buying Single Family Rentals," "Flipping For Fun And Profit," and I explain them detail in "A Bakers Dozen / A Real Estate Anthology Volume I.") The third way of dealing with the Sharks is to simply know more real estate and lending than they do!

Before I go on, I'd like to remind you of some ancient wisdom from two strange sources, an old "Star Trek" episode and a very old joke.

When Kirk was fighting with another identical star ship, he had Spock searching for the control panel code of the other ship, as Spock searched Kirk explained to Bones (and the audience) that it's not necessarily the quicker or stronger that wins a fight, but rather the one who best understands how things work.

There's an old joke that tells of a farmer standing behind a plow, wiping his mule and cursing up a blue streak at the resting animal. Not far away stands his much amused neighbor who shouts out "Have you tried asking him nicely?" After responding in words I was to young to know when I first heard this story, the farmer tells the intruder to try it himself! After carefully climbing the fence, the intruder picks up a broken fence post. As the farmer asks what the post is for the intruder hits the mule as hard as he can between the ears. He then leans in close to the animal while it stagers back to it's feet and says "please". As the farmer passed guiding the plow he's told "First you've got to get their attention!"

Keep these two lessons in mind as I go on. Know how things work and sometimes it takes drastic measures to get their attention.

Every real estate "Guru," myself included, teaches about "short sales" getting a lender to take less than it's entitled to as full payment. Lenders accept "short sales" when it's in their best interest. Lenders also discount paper and sell notes all the time, large lenders sell these loans in bundles sometimes called "blocks" or "portfolios" unless Bill Gates calls me we're not going go into these. Small lenders, local banks, S & L's, credit unions, hard money lenders, and especially private lenders will often sell individual loans. Any lender that will consider a "short sale" can be approached to sell you the note.

I'm not advocating buying first mortgages, although I have, but rather buying a subordinate note, second thru infinity.

There are two ways to use this information. One, when you can't find or can't deal with the current owner/seller. Buy the note and they'll not only come to you, they will have to deal with you.

Secondly, when you're a day late or out lied by another shark.

Unlike some troubled homeowners, lenders don't hide, their information is on record at the local county recorders office, including their successors and assigns. You don't have to have written permission from the current owner/seller to talk with a lender about buying the note.

When you buy an existing note your order of priority starts not when you buy the note but when the original mortgage securing that note was reordered. Your interest therefor is almost always superior to any current leases, sales agreements or deeds.

You're going to end up owning the property for about the same money as what you would have, had you had a fair offer accepted in the first place. You would have gone after the short sale from the second.

Just a note of caution, do not be in a hurry to stop your foreclosure, trouble sellers may have other as yet unrecorded liens against the property. Don't try to stiff inferior lien holders, try to negociate short sales with them, remember they could pay you off.

Bill

William J Archambault Jr

The Real Estate Investment Institute

©REII

My friend, Brian Brady, recently imparted some great ancient wisdom, mixed well with sarcasm punctuated by the apathy and stupidly of the masses! See: The REALTOR's Argument For Loan Originator Licensing- Cura Te Ipsum

My purpose today is not to add to the licensing debate, I don't debate people I don't respect, and I don't respect the congressional low-lifes that are advocating licensing and restricting loan originators, to the determent of the public and the "American-Dream!"

I find the idea that more government "licensing" to be the solution pure stupidity! Yet no less than the NAR is suggesting this. See: The Buck It Don't Stop Here / Shame On The NAR Brian Brady's advice "Cura Te Ipsum,*" is truly inspired. I might have said "people that live in glass houses, shouldn't throw stones." but "Cura Te Ipsum" is much better advice.

The elitist in Congress and the whore mongering press, love the fact that the banks, and the large mortgage bankers, lead by Monzila, are battling with the mortgage brokers and small mortgage bankers that made them rich. I would suggest that for the public and our own good we should follow some other ancient wisdom: "e pruritus unum!**" For surely "We must all hang together, or asurdly we shall all hang separately!"

There was a time when our schools taught logic, American History, the meaning of words, and collage prep students got some Latin. Alas that's been replaced with Revisionist History, Condoms 101-108, Remedial Rap! So for our younger readers:"Cua Te Ipsum," basically means *"heal thy self" it's great advice for the NAR, before they kill the Golden Goose! If we except to maintain the "American Dream" and survive "**e pruritus unum" or "from many, one" is good advice for if we hang any part of our industry we will certainly destroy all of it. Just like Ben Franklin's concern. Mortgage lending, real estate brokerage, and home building are all just parts of the same industry.

I suggest we personaly, take the Boy Scouts" advice and be "Be Prepared." With regard to the public we serve and the "American Dream" I suggest "Semper Fidelis!"

Bill

William J Archambault Jr

The Real Estate Investment Institute