Most folks just don’t get it

You suggest something, anything, and the first thing out of someone’s mouth is something negative. I’m sure this has happened to you. Almost always, people will say that something is wrong with your idea. I am always amazed at this.

Ideas galore

I am a brainstormer. That is my best talent. I have . . .

Read More: 4 great questions to create tax delinquent solutions. Post 185]]> Coach Mitch’s REFLECTIONS™

Most folks just don’t get it

You suggest something, anything, and the first thing out of someone’s mouth is something negative. I’m sure this has happened to you. Almost always, people will say that something is wrong with your idea. I am always amazed at this.

Ideas galore

I am a brainstormer. That is my best talent. I have lots of ideas. I don’t say they are all good, I just say that I have lots of ideas. However, this much I do know – all my ideas are not bad. Yet, invariably, people will react negatively to something, even before the idea is completely stated. They also react by making awful faces and other body language that indicates disapproval.
The other thing I’ve noticed is that the negative person almost never has any ideas of their own. All they do is nay say. I don’t know why that is, but it is so.

It’s very distressing

I am a positive person, I can’t help it. I am naturally optimistic. I always see things as possible, that the glass is 75% full. This is because I have trained myself to come up with ways to fix a situation and I am confident that I can overcome. However, when someone pours water on an idea, I feel a hard physical reaction. It takes me some time to overcome this negative reaction and, generally, it is difficult to overcome negative feelings. The world does not stop because someone said “I don’t like that.” You have to go on, but it does take some effort.

I’m not grousing

I’m not even vetting. I’m just stating facts. Few persons I have met have a positive outlook. For me, a negative outlook is problematic. These persons are overhead. I don’t like needing to work hard to overcome their negativity;
in fact, I resent it.

It is a waste of my time to be gripped by their pessimism. I don’t care for the negative emotions their lack of imagination stirs within me. I have better things to do than to spend time thinking how silly someone is because they can’t see the benefit, or don’t see the wisdom, or won’t see the vision.

This is a real issue. Others lack of imagination inhibits me. Others prevent me from using my brainstorming ability to piggyback ideas. Others lack of enthusiasm also prevents the enthusiasm of still others. When someone throws water on an idea, you have to work ten times harder to overcome the negative.

We aren’t taught to be creative

Sadly, we are not taught to be positive; not by our parents, not by our teachers, not by our employers, and, increasingly, not by our economic system. We are left to fend for ourselves.
But creating something out of nothing is exactly what we do as real estate investors. We create solutions! We create a way out. We help. We figure how to give the seller what they want, but in a way that we can make a profit. It is heady stuff when it works.

Win-Win

This is more than a slogan; it is a way of feeling, living, thinking, being. Nothing happens unless the cash register rings and that won’t happen unless you are creative enough to find a way to give the seller what he wants and still be able to make a profit. That is the bottom line.

What brought this to mind?

I was speaking to a manager about their business. I use their service and the manager wants to someday own his own facility. I made several suggestions on how the service could be improved. After stating each suggestion, every single time, the first thing the manager said was, “Corporate won’t allow that.” or words to that effect.

The Issue

I spent an hour offering different ideas and insights, with not one being accepted as valid. Now, I’m not saying everything was a gem, but not one idea was pursued.

Another issue

I told the manager, “You are not asking smart questions. You are immediately falling into the existing corporate policy and not even thinking about a work around that keeps you within the policy but also allows you to help customers by improving service. This stifles your business and limits your thinking, creativity and upward mobility.” He understood what I said but pointedly, he did not ask, “How can I do better?” Some people can’t be led to water. He didn’t “get it” even though I hit him with a bat.

Four great questions

Let me suggest a way of thinking. It will help in anything you do, and it will make everyone think of you as wise, introspective, considerate and insightful. When reading the following suggestions, think how they can be used in a real estate investing conversation.

When someone says something of interest…you say,
1 “That’s interesting, tell me more.”

When they have finished speaking about that item…you ask,
2 “That’s great! What other ideas do you have?”

When they have given another idea…you ask,
3 “Terrific! How would you implement that, or how can we make that happen or what else could be done?”

When they have told you how to implement…you delve further,
4 “Very nice! How would you overcome this issue, or how would you handle that concern or what would you do about…?”

It’s easy to be creative – just ask questions.

It’s easy to get information – just ask questions.

It’s easy to have people like you – just ask questions.

Just help people to express themselves. They have it in them. You just have to be smart about bringing it out. This is the essence of salesmanship.

First, you accept their notion, by saying something accepting, like, “OK” or “Good” or “Fascinating.” or “I’m curious.” or “That’s creative.” or “How exciting.” or… If you first compliment someone, if you accept them, then they will reciprocate and accept you. It’s not rocket science.

When you ask questions, people think many good things of you.

They think you are nice, because you are putting them in the spotlight.

They think you are smart, because you are noticing something good about them.

They think you are insightful, because you are insisting that they speak more about a particular point they had made.

They think you are introspective because you are questioning incisively about something they said.

Tax delinquents

The tax delinquent is no different. They are miserable about their situation. If you ask about details, they will tell you details. The details they speak about are the keys to the solution. You just pay attention and the tax delinquent will tell you what they want and how to give it to them.

Example:

You ask, “What have you done to resolve the situation?” (outstanding tax bill)
The tax delinquent usually says, “I tried to borrow the money.” Of course they tried to borrow money; it’s what you would do in the same situation. But, you play along.

You ask, (#1) “That’s interesting, or that was a good idea, what happened?”
The tax delinquent often goes into detail on how he has been turned down, all great information to use later. Typically you will hear how the banks won’t refinance the property, and he couldn’t sell because buyers couldn’t get a loan.

You ask, (#2) “Did you try to borrow from anyone else?” This is another version of: What other ideas did you have? You must train yourself to revamp any question to suit your immediate need/situation.

Had the brother/uncle/friend given/loaned them the tax money, then the taxes would have been paid, they would not have been on the tax delinquent list, and you would never have contacted them. Therefore, because the taxes have not been paid, you already know the answer before you ask the question, but you want the tax delinquent to disclose more info about what he did or (#3) what else he can do to solve the situation?

You ask, “Often family or friends help. What does your family think about this situation?” If asked in this manner, it allows the tax delinquent to make excuses for his family or friends or even to dismiss the question. Typically, the tax delinquent will tell you specifics about the family situation and you will gain insight into how to formulate your offer. Don’t forget, you are seeking to help, but Uncle Bill did not.

What you don’t ask is just as important. You did not ask, “Can you get the back tax money from your brother?” Asked in this manner could put a bad taste in the tax delinquents mouth because he remembers being spurned by the brother, and he is embarrassed that the brother did not/could not provide the monies, and now he is further embarrassed by you knowing some dirty family laundry. It is always better to ask a question that is on target but in a roundabout way. (“Often family helps.”)

You have effectively made the tax delinquent admit that no one will give him money. If he was in denial, he is no longer. You have put him up against the wall and in a corner. Then comes the coup-de-grace, you ask, (#4) “Since you haven’t been able to raise the money to pay the back taxes, what are you going to do?”

“I don’t know.” He says. “I just don’t know.” He is beaten and he just admitted it.

You say, “Well, maybe I can help. What would you say if…” and you offer a solution that gives the tax delinquent a way out, with dignity, and makes you a safe, significant profit.

Coach Mitch’s “Ridiculously Simple System…”™ has scripts that teach what to say in the specific situations that always occur with tax delinquents. More important than what to say, is that Coach Mitch helps you create the proper mindset so that you can do things in the proper order, with the proper body language and other necessary ingredients to have a successful experience.

I have always believed that a good deal is possible with a motivated seller, but a great deal is probable with a motivated seller and good negotiating tactics. You enhance your odds of success if you are using good tactics, implement them well and you are speaking to “The most motivated of all motivated sellers”™ a desperate tax delinquent.

Go forth and prosper –

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com

Going fast: Strong demand has melted away inventory in some housing markets April Buying Advice: With investors and first-time buyers vying for bargains, homes are being snatched up as soon as they hit the market.

Prices may not be shooting up, but homes are once again selling at a rapid clip in many markets… Yep, that’s right: Multiple offers are back. 10 tightest . . .

Read More: Are housing prices going up? Post 184]]> msn REAL ESTATE   Melinda Fulmer    4/7/12

Going fast: Strong demand has melted away inventory in some housing markets
April Buying Advice: With investors and first-time buyers vying for bargains, homes are being snatched up as soon as they hit the market.

Prices may not be shooting up, but homes are once again selling at a rapid clip in many markets… Yep, that’s right: Multiple offers are back.
10 tightest major housing markets around the country in this slide show

In markets such as Portland, Ore.; Memphis, Tenn.; Seattle; and Salt Lake City, listings are practically evaporating as they come on the market… especially…on the lower end, as investors and first-time buyers vie for bargains. Seattle is also getting highly competitive, as 36% of the inventory has melted off the market.

However, a lot of potential sellers still can’t list their homes at today’s prices because they are underwater on their mortgages…That has kept supply in check. Moreover, the flow of foreclosures and other distressed properties onto the market has slowed considerably after the robo-signing controversy and as loan-modification and rental programs have been expanded. As a result, buyers are fighting over those decent properties that are left. In some cases, they are even competing with foreign buyers who see cheap U.S. real estate as a once-in-a-lifetime rental investment.

February existing-home sales slipped 0.9% to 4.59 million in February from 4.63 million in January, but were 8.8% higher than the 4.22 million sold at the same time last year. The national median existing-home price in February was $156,000, up 0.3% from February 2011…NAR expects sales to rise between 7% and 10% in 2012.

See entire article: http://realestate.msn.com/going-fast-strong-demand-has-melted-away-inventory-in-some-housing-markets

********************

Coach Mitch’s REFLECTIONS™

Misinformation Galore

Q: If investors are buying, especially foreign investors, how does that make the future of the general housing market better?
A: It doesn’t. The stock market is a harbinger of the future, yet it goes down as much as it goes up. Don’t bet that most investors know anything. They guess and hope, just like you.
A: The only real protection is to buy at ridiculously low prices. See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

The current market is contrived

Just as the previous market was hyped, aka The Real Estate Bubble, today’s market is manipulated by forces inimitable US.

The way it should be

In a normal market, new houses are getting added to the total inventory on a continuing basis and existing inventory is being sold. Supply and demand are separate from each other. When I choose to sell has nothing to do with when you choose to buy.

However, now, because of bank/government manipulation, we have fewer houses on the market than we should, causing a decrease to total inventory, resulting in a frenzy for existing inventory.

The market is manipulated because most bank owned properties are sitting vacant, waiting their turn to be marketed, and thus constraining supply. The banks aren’t selling their foreclosed housing inventory at current market prices in order to not “mark down to book value.” They won’t dump the houses, for fear of flooding the market and further reducing the prices. They are conspiring together to only market a few homes at a time. However, their inventory is very large, there are many more foreclosures to come, and the lack luster pricing will continue for some time.

Your risk if buying today

Currently, the banks are to housing, as OPEC is to oil. As a cartel purposefully limits supply, prices go up. By buying a house today, your risk is that, when the spigot from the banks does open up, the extra supply will lower prices.

The large number of short sales and distressed properties still in the system, combined with the low number of mortgage qualifying buyers, keep inventories high enough to depress overall market values. As soon as prices climb, investors will bow out because they only seek bargains.

If that wasn’t enough -

A little spoken about potential irritation: if buying a short sale, the robo-signing fiasco has put the ownership of the home into real question. The bank, it has already been ruled, might be selling a home that it does not own. You could be out the investment. Thank you Miscreant Political Class.

Supply and demand

The size of the housing crisis created this interesting distortion of the simple supply/demand equilibrium.

A huge percentage of the potential market is not for sale simply because the homes are under water and the current owners are either not able to accept a lower price or are not willing to go into foreclosure. Thus, the only homes available are shorts or those which formally had huge equity. That is a low number, thus there are few from which to choose.

The time to invest?

Buyer’s can’t mortgage qualify, so they must rent. Seller’s can’t sell are regular price so they must discount. It would seem that this situation is a formula for an investor’s paradise.

Hmmmm.

But, let’s ask; when the next wave of foreclosures hit, in which direction will the new inventory force prices? Additionally, how will prices react when the Fed finally has to move interest rates up to curb the coming inflation? Don’t forget, a person only can afford an amount certain for a mortgage and as the interest rates go up, the mortgage amount goes down – and housing prices plunge to meet the new reality.

Two choices

For those seeking to buy now – don’t. Save as much as you can for the next several years and purchase when the market has finally flushed itself out. Then the real estate market will be a great bargain, but now it is still too much of a gamble. Media types love to hype real estate, especially because it augers well for the economy, and for their candidate, the current president.

If you can, wait, there’s still plenty of time ahead to make that home purchase.

OR

You can do what I suggest, find a highly motivated seller who has lots of equity and help them move on with their life. This is the essence of Coach Mitch’s “Ridiculously Simple System…”™.

By purchasing at 50% of the current Fair Market Value, FMV, or less, it will be almost impossible for you to lose. It will also be much easier for you to sell because your purchase price was so low and the other house sellers paid so much more. Imagine, paying 30% of FMV! With the monies saved, you can rehabilitate the home to be just the way you dreamed.

Your house can be your financial life preserver or it can sink you.

Be smart.

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com

MARQUETTE — Home foreclosures are an increasing reality of our economy. The foreclosure rate increased by 1.8 percent in 2011, in Marquette county. For some it’s an opportunity to purchase a good home at a cheaper price.

Facebooker Jessica Mariin writes “We bought ours that way…Not much work inside, it was an awesome deal,”

Owning a home, perhaps with a white picket fence is the . . .

Read More: Get cheaper homes at tax auctions. Post 183]]> UpperMichigansSource.com  3/28/2012  Cheaper Homes At Auctions

MARQUETTE — Home foreclosures are an increasing reality of our economy. The foreclosure rate increased by 1.8 percent in 2011, in Marquette county. For some it’s an opportunity to purchase a good home at a cheaper price.

Facebooker Jessica Mariin writes “We bought ours that way…Not much work inside, it was an awesome deal,”

Owning a home, perhaps with a white picket fence is the classic American dream that many of us have, but it can easily slip away. Especially with our economy if you don’t pay your taxes…the county takes away from people who don’t pay their property taxes.

On April 1 the county gets a list of homes that are being foreclosed. Ann Giroux, the Marquette county Treasurer, decides what property will be auctioned in August. “They’re sold to the highest bidder, but they all start at a minimum bid. Which is the delinquent taxes, so we are obviously trying to recover the taxes that are owing cause the delinquent tax fund needs to be made whole. So that’s kind of the first objective. Sometimes we make money on the property sometimes we lose,” Giroux said.

Officials say do your homework before purchasing a home in an auction. You should go to the register of deeds to see if there are unpaid taxes, liens against the property or second loans. Most importantly find out the condition of the home.

 ********************

Coach Mitch’s REFLECTIONS™

Be aware

It is always interesting to me how the Miscreant Class speaks out of both sides of its mouth. They issue the warning to “do your homework before purchasing a home in a [tax] auction.” This admonition is always given as if the tax collector has a legitimate concern for your welfare. Were they truly concerned; some other method of tax collection, short of taking the property, would have been created. Government officials, i.e. The Miscreant Class, simply do not want to be held accountable for their actions which they know to be harmful to citizens. The ‘concern’ is for themselves. The tax collector and their apparatus hope you see them as ‘just doing their job’, instead of being part of an insidious operation to fund bloated government.

Be wary

It is certainly true that you must carefully review all aspects of a property purchase prior to the purchase. I have never lost money in a real estate transaction precisely because I am careful. I never take chances, at least not in the way most folks think of taking chances. I only invest in sure things. I define an investment in ‘a sure thing’ as: getting something at such a good price that it can always be sold for a profit. It is virtually impossible to lose money if purchasing for 50% or less of the current FMV, Fair Market Value. Tax delinquent property is consistently lower in price than any other motivated situation and therefore, you will consistently find the best deals in this marketplace.

Know the market

The most important knowledge is to have a good understanding of current market values and conditions.

Buying a property at a tax deed auction is a wonderful way to attempt getting a great deal. You usually get the property without liens, so you only need be sure that the property fits in with your plans and you pay a price that is 50% of the market price – or less. Getting a property at a minimum 50% discount in a tax deed auction is difficult because the crowds are large and many are knowledgeable.

Buy before the auction

Because I found that I can do a much better deal when working with the tax delinquent owner directly rather than buying at the tax deed auction, I have concentrated on this approach and advise you similarly.

There are often many issues with property owned by motivated sellers and they will try to hide as many as they can; therefore inspection is a must. This is a hard fact, be sure to take it seriously. Do not, repeat, do not buy anything that you have not inspected. If investing remotely, have your representative take pictures and record their impressions. Most new cell phones have both the ability to take pictures and record voices.

Get educated

Of course, when inspecting, you must know what you are looking for. If you don’t, then bring along someone who does, like a contractor who specializes in rehabs. Have him explain what he is looking for and after a while you will have a good general understanding of what you should look for. I often went with other real estate investors to see what they were interested in and how they inspected.

As a general rule, people like to speak about themselves and show off their knowledge. Befriend other investors and bleed their brains by becoming an expert at asking smart questions. Example: “You say to find water damage by following the water trail. Can you show me where it is and how to follow it?”

Often, tax delinquent sellers will sell so cheap that you can overlook many problems. I’ve gotten property that has been so rundown that I can’t adequately explain the smell, nor how obnoxious the bugs were, nor how dirty the bathroom and kitchens were. However, look upon these ugly properties as gold. I don’t work on these anymore, those days are long gone. I hire the work out and so should you.

PP&C’s

The least costly and most effective repairs are Painting, Patching, Carpets, Cleanup and Curb Appeal. The profit made on a cosmetic rehab can be substantial. The previous owners are lost; they have no money, vision, ambition or desire to do anything other than run. These are the situations where you make gobs. BTW, the official definition of ‘gobs’ is: making profits beyond all bounds of decency.

A story

I remember going with another investor to see a home during the winter. The bathroom was interesting. It’s a good thing it was winter because the toilet was filled to overflowing with frozen human waste. The homeowner had not had running water for a while and couldn’t flush, but, having to satisfy a human need, and having no other place to go, he just kept on going and going and piled it up in the toilet bowl. Sadly, I didn’t see toilet paper in the waste. Needless to say, that toilet was replaced and not cleaned. When the other investor and I saw this, we looked at each other with disbelief and laughed. We laughed about this vision for several years.

Understand the mentality

The tax delinquent is “The most motivated of all motivated sellers”™ Try to put yourself in the mind of someone who has no choice but to continuously defecate in a toilet filled with his own excrement. It is a scene out of Dickens, in the bowels of Hells Kitchen. This person is desperate, but he is not stupid. Try to take undo advantage and he will give his good deal to someone else. But, treat this person with empathy, take needed decisions upon yourself, helping him to move to a better situation, and you have the potential to make gobs.

Coach Mitch’s “Ridiculously Simple System…”™  teaches you how to speak to this type of motivated seller. Remember, a person in a desperate tax delinquent situation does not need much to make him happy. Sometimes a working toilet is all that may be necessary.

Be kind,
(But for the Grace of G-d, that could be you.)

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com

Here are the five top Moneynews stories from the past week that you may have missed:

Kevin Freeman: Terrorists, Nations Plot Attack to Doom Dollar Terrorist organizations and sovereign governments have attacked the U.S. financial system in the past and may do it again to destroy the U.S. dollar’s status as global reserve currency, says author Kevin Freeman . . . . . .

Read More: Win-Win-Win Post 182]]> Review the headlines

Top Five Stories You May Have Missed

Here are the five top Moneynews stories from the past week that you may have missed:

Kevin Freeman: Terrorists, Nations Plot Attack to Doom Dollar
Terrorist organizations and sovereign governments have attacked the U.S. financial system in the past and may do it again to destroy the U.S. dollar’s status as global reserve currency, says author Kevin Freeman . . . Click Here.

Trump: Soaring Gasoline Prices Will Cost Obama His Job
High gasoline prices will cost President Barack Obama his re-election, as voters won’t tolerate what they see as inaction to do anything to lower prices at the pump, says billionaire developer and real-estate mogul Donald Trump . . . Click Here.

Former Fed Official: U.S. Headed for a ‘Fiscal Cliff’ Next Year
Princeton economist and former Federal Reserve Vice Chairman Alan Blinder says the U.S. is cruising toward a 2013 “fiscal cliff.” He predicts the economy will be hit with a 3.6 percent decline in gross domestic demand “as tax cuts expire and spending falls” . . . Click Here.

Feldstein: Obama’s Tax Hikes to Spark New Recession
Martin Feldstein, former chief economic adviser to Ronald Reagan, says the most important cloud on the economic recovery horizon is the large tax increase that will occur next year unless legislation is passed to block it . . . Click Here.

Bernanke: Economy Lacks Strength to Sustain Gains
There is still not enough spending and investment to sustain the economic recovery, said Federal Reserve Chairman Ben Bernanke, and consumer demand remains weak relative to its level before the Great Recession . . . Click Here.

********************

Coach Mitch’s REFLECTIONS™

Heed the headlines

They all call for continued soft economic times ahead. And for a truly hellish future, read Aftershock, whose authors make a good case that we face an extended deep depression in which real estate prices fall even further and stay down for 10 years. For those thinking that buying a personal residence or an investment property at regular prices is OK in this economic climate– think again. If the market continues to be soft, and you need to sell, how much of a loss can you afford to take in order to make a sale? Think about this carefully.

What if you HAD to sell?

A neighbor recently found a new position, after having been fired from his position of 12 years, and after looking for a job in his field for over 18 months. Sadly, however, he had to move 1000 miles away, to an unknown area, with a newborn, without friends or relatives nearby. But, he was lucky, he was able to sell his house and fairly quickly.

It helped that the neighborhood we live in is considered a prime location around Albany, NY. In good times homes in our neighborhood do not last long. However, he still had to accept $20000 less than he paid for the home. Our market has not retreated a lot in this downturn, about 10%-20%, depending on location. It’s a good thing that he made a killing when selling his previous home in Delaware upon accepting the promotion that required the move to Albany. At least he had the profit from his previous sale to give back on this sale, or at any rate, what monies were left after needing to use that profit to live because he didn’t have income for 18 months.

What if you buy now?

Let’s say that you get “a deal” and only pay 90% of FMV, Fair Market Value, are you safe from potential economic ravage? No.

A typical 4/3 home is often going for $250000 or more, but you paid only 90% or $225000. Other like houses are at $250000, but remember you need to sell and this is soft market. Realtor commissions are 6% or $15000. Fixup/cleanup can easily be $5000. No one pays full price these days (you didn’t) so you’re going to have reduce your asking price somewhat, say 5% or $12500. Adding it up, you will be lucky to only lose a net of $6250. It’s a good thing that, when buying, you paid somewhat less than the full amount because if you had paid regular price, as my neighbor did, then your loss would be $32500. That’s a real kick in the pants.

Don’t ever pay retail – think fire sale

These days, the most you should consider paying for housing is 50% of the Fair Market Value. You don’t have to have the dream house. Keep looking until you find a home that is satisfactory – but make sure it’s no more than 50% of FMV. The food in that wonderful kitchen won’t taste as good if you have to sell at a loss.

Don’t give in to your feelings

The biggest issue to overcome is that we are mostly emotional beings. Our emotions rule, often to our detriment. We make choices based on how we “feel” about something rather than how well that item fits our needs. We choose based on our wants, rather than our needs. It is a crucial difference, often costing us dearly.

Look for personal/financial difficulty

Others, who acquiesced to their feelings, paying retail, have no choices; they are required to take a loss if they wish to sell. You are smarter than that. Tax delinquents often have free and clear property. Yet, with the banking situation today, they cannot refinance, usually because of bad credit, buyers can’t qualify to purchase, and relatives don’t have money to lend to pay the taxes.

When you show an interest, they entertain your low-ball offer, because no one else is offering more. In fact, most of the time, people have stopped showing any interest at all. They may not be happy with your offer, but your responsibility is to your interests. They are resigned because they did not look after their interests properly. They convinced themselves that the market would go up, forever, and paid far too much, so that their whim could be satisfied.

Be patient

You are only going to purchase a personal residence a few times in your lifetime. I am convinced that you can have your cake and eat it as well. Plan well in advance so that time is not a factor. It won’t matter in a few years, if you looked for a few more months, but in the end you will have found that property at 50% of retail. Should something horrid happen to this economy, as is predicted by many, then at least you can absorb the financial hit better than your neighbor.

Win-Win-Win

You’ve heard the old joke, Q: “How fast do you have to run if a bear is chasing us?” A: “I just have to run faster than you.” From a Machiavellian perspective, you have to look out for yourself. So, be smart; find a property where the current tax delinquent owners were not smart. Help them out of their situation, and get a great deal at the same time. Then, change the property to your liking. For you it’s a win-win. You win when you purchase, and you have acquired with so much extra equity that you can win again by rehabbing and upgrading to what you want. Should the market continue to be soft or to tank all together, if needing to sell, you can lower your price because you paid so little when purchasing, another win. Win-Win-Win!

Isn’t it interesting, Coach Mitch’s Tax Delinquent Property “Ridiculously Simple System…”™ allows you to win even though all around you are losing.

Be wise,

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com

The U.S. economy falls to #2

China’s economy will surpass the U.S. in 2016

This article is taken from an article by Brett Arends, MarketWatch

The “Age of America” is over. page 1The “Age of America”is over. page 2

As reported in MarketWatch, in a recent report, the International Monetary Fund has given analysis which shows that soon China’s economy will . . .

Read More: The “Age of America” is OVER! Post 181]]> Coach Mitch’s REFLECTIONS™

The U.S. economy falls to #2

China’s economy will surpass the U.S. in 2016

This article is taken from an article by Brett Arends, MarketWatch

The “Age of America” is over. page 1The “Age of America”is over. page 2

As reported in MarketWatch, in a recent report, the International Monetary Fund has given analysis which shows that soon China’s economy will be the dominant economy in the world.  This news has gone virtually unnoticed in the US press.

For the first time, the IMF has concluded a date when the “Age of America” will end and the US economy will fall into second place. According to IMF calculations, China will top the US in real terms in 2016, in a mere five years.  Don’t forget to mark your calendar.

China’s ascension is worrisome for the US dollar and the US Treasury market, both of which have been propped up for many decades as the dollar has been used as the world’s currency. When a country pays its liabilities with US dollars, it cedes that the US is the world’s hegemonic power, granting the US much status, influence and power, as well as a monetary lift.

Most economic and political experts are not prepared for China to accede to the pinnacle of world power this quickly; they will tell you China’s ascension is decades away.  Sadly, politicians and financial experts are only comparing the gross domestic products of the two countries using current exchange rates.  This is largely a meaningless comparison in real terms.

Politicians want their populations to think that leaders know what they are doing so they use whatever economic measures put them in the best light.  However, comparing economies using exchange rates raises several questions.  Currency markets can fluctuate wildly, just like the stock market.  Do you really believe that the gross domestic product of the US falls two per cent each day just because the stock market has recently been in rampant descent?  Exchange rates do not represent real output, but rather international money flows and speculation.  Do you recall the talk of how speculation in oil futures was driving the price of oil up?  The U.S. dollar fell nearly 10% against the euro in the first quarter of 2011; but it is silly to think that, over the same period, the US economy shrunk by 10% as compared to Europe.

The IMF also used analysis to look to the true, real-term picture of the two economies using purchasing power parities, PPP. This compares what people earn and spend in real terms in their domestic economies.

The Chinese aggressively pursue a policy of deeply undervaluing their currency, the renminbi, by purchasing massive amounts of dollars, which actively suppresses the renminbi in the foreign-exchange markets.  When your currency is cheap, others can purchase your goods at a lower price. More customers’ means your factories flourish, your people have jobs and your relative standard of living rises as against others whose factories are idle and whose people have no jobs nor prospects.

Purchasing power parity is not a perfect measure of an economy but it does measure the output of economies in terms of real goods and services, not just paper money. That’s why this measure is widely used to compare economies.

By comparing purchasing power parities, it is estimated the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. In the same period, it is estimated the size of the U.S. economy will rise from $15.2 trillion to only $18.8 trillion. A mere ten years ago, the U.S. economy was three times the size of China’s.

Naturally, all forecasts are fallible. Unforeseen events and policy changes can happen to make any forecast problematic. The actual date when China surpasses the US might be earlier or somewhat later, depending on conditions, but most agree, the outcome is scarcely in doubt.  The Indian economy is also moving ahead quickly and it too could surpass the US one day.

When China succeeds the US, it will signal the end of the “Age of America.”  A primary casualty will be the end of America’s economic hegemony and with it a good deal of the awe that people feel for America.  Compare being the hegemonic power to a policeman.  Fifty per cent of a policeman’s job is done by the uniform and badge.  People automatically give it respect and deference.

Britain ruled the world for a significant time.  “The sun never sets on the British empire,” was a familiar refrain.  America came into its ascendancy at the end of the 19^th century and cemented her role as the world’s premier economic power after WWII.

America began as the child of Britain, and both live under a similar set of rules for government, respect for civil liberties, and a certain level of respect for the rights of property. China’s governing philosophy respects none of these. The “Age of China” will feel very different than the “Age of America.”

Already China’s neighbors in Asia are apprehensive of the dangers of a raging dragon. Southeast Asia is looking to the US as a counterweight to China and wonders why America is not pursuing its self-interest?  American hegemony over the last half-century is seen as having been fairly benign.  China’s rise is fearful to its neighbors because as a military and economic power, China’s history shows that it is can be predatory, just ask the Dali Lama and the people of Tibet.  Asia does not see that China will be a benign hegemony.  But nations have interests and they will align with whoever will protect those interests.

The relative decline of America and the rise of China is the 2nd biggest story of our time. Its implications can be seen everywhere, from closed factories in the Midwest and foreclosed communities in California, which are juxtapositioned against China’s bulging factories, burgeoning middle class, and its building boom which has caused the soaring costs of oil and other commodities.  To paraphrase Ross Peroit, “That giant sucking sound you hear is China sucking up all the jobs, the energy and the accompanying influence.”

For decades China has pursued economic policies aimed at expanding their power. During this same period the US has pursued a policy of economic appeasement via very unfair free trade.  The US is fair, having low or no tariffs, and China has been granted Most Favored Nation status.  But China and other nations are not fair because they are protective of their native industries and business interests.  The unfair free trade policies have been allowed by both political parties.

It is commonly stated that China has a state-guided form of capitalism, and that the US has a much freer form of capitalism.  The two systems are in a collision course.  US policy has allowed a massive shift in capacity from the US to China.  We have traded jobs for profit.  Corporations have moved the jobs to China in order to get the benefit of greater profits.  This is a very destructive policy.  The result is a US that is quickly becoming polarized between a small, very rich class and an eroding middle class and an ever expanding underclass. The people who get the profits are very different from the people who lost the wages.

History shows that a nation cannot stay on top if its economy doesn’t work. Just ask the Romans, the Spanish, the British, etc.  The US is now spending gigantic sums trying to maintain both domestic programs and our hegemonic status overseas.  It just doesn’t work for long.

Investors are craving the dividends made from rising profits by exporting our factories and jobs to China – but there are consequences.  Early in the last century the US and Germany both surpassed Great Britain as the world’s dominant economic powers. When Britain lost its ability to run the world by itself, it didn’t take long for WW1 to break out.  Domestic pressures percolate and politicians/demagogues respond.

China has just launched its first aircraft carrier and has developed a significant array of submarines and ship to ship and land based missiles, all stationed across the Taiwan Strait.  The Chinese people are highly nationalistic; her leaders are aggressive, not fearful of taking millions of casualties, and they recently showed disdain toward America when, early in President GW Bush’s first term, a Chinese fighter plane collided with and downed a US military plane.  The Chinese interrogated our US crew of 24 for days, at all hours, incommunicado, not allowing US inspection or representation, and then returned our airplane in pieces.

China is getting ready to assume the mantle of leadership.  The language and tone of their official organs shows muscle, pride, arrogance and a calculated disrespect for America.   While American leaders are seeking dialogue, the Chinese seek power.  If American leaders are silly enough to give our leadership position away, the Chinese are smart enough to take it.  I would love to see the blueprint as to how American leaders will stop China from doing something injurious to American interests.  Sadly, American corporations cannot call for protective tariffs against Chinese imports because it is the very products our companies make in China which would be punished and stockholders would not be happy with lowered dividends.   We have certainly put ourselves into a box.

The string holding the double edged Sword of Damocles is frayed.  On one edge we have corporations denuding our domestic industrial base and the other edge has government monetary policy depleting our assets by issuing fiat monies so that we can continue our wars and be able to “give” 70% of the US population some level of government benefit.

However, government spending does not improve an economy.  Regulation does not make products more profitable, government interference stifels hiring and investment, nor does government oversight improve the commercial environment, quite the opposite.  US government spending today is about 45% of GDP, where 100 years ago it was under 10%.  If our prosperity is really a function of government spending, then we should be half way to utopia; and utopia will exist when government spending is 100% of GDP.

In an interview I heard recently, Donald Trump said that in his business conversations with the Chinese, they say that they don’t understand why the US is letting them win so easily.  They don’t want to import American products.  They want America to build factories in China and in order to get permission to do so, the corporation must make all intellectual property available to China.  This was unheard of.  It’s almost as if we have put a sign on ourselves, “Kick Me.”  The Arab oil cartel certainly does.  They are draining every drop they can from US.

Our leaders, all 556 of them, have put US into this grievous position.  To think that our policies just happen is silliness. There are 435 congresspersons, 100 Senators, 9 Supreme Court justices, the president and vice-president.  These 556 citizens make our policies.  Nothing happens unless they choose for it to happen.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details on how to safeguard you and your family.

Wake up Americans.

Part 4 of 4

Federal Bureau of Investigation

2010 Mortgage Fraud Report

Read the entire 52 page report: FBI: licensed brokers/bankers/lawyers do lots of mortgage fraud

The purpose of this study is to provide insight into the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens during 2010.

FBI . . .

Read More: FBI: lots of brokers, bankers, lawyers doing mortgage fraud. Post 180]]> Coach Mitch’s REFLECTIONS™

Part 4 of 4

Federal Bureau of Investigation

2010 Mortgage Fraud Report

Read the entire 52 page report: FBI: licensed brokers/bankers/lawyers do lots of mortgage fraud

The purpose of this study is to provide insight into the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens during 2010.

FBI Response

The FBI continues to foster relationships with representatives of the mortgage industry to promote mortgage fraud awareness and share intelligence. FBI personnel routinely participate in various mortgage industry conferences and seminars, including those sponsored by the MBA. Collaborative educational efforts are ongoing to raise public awareness of mortgage fraud schemes through the publication of the annual Mortgage Fraud Report and the Financial Crimes Report to the Public, and through the dissemination of information jointly or between various industry and consumer organizations. Analytic products are routinely distributed to a wide audience, including public and private sector industry partners, the intelligence community, and other federal, state, and local law enforcement partners.

The FBI employs sophisticated investigative techniques, such as undercover operations and wiretaps, which result in the collection of valuable evidence and provide an opportunity to apprehend criminals in the commission of their crimes. This ultimately reduces the losses to individuals and financial institutions. The FBI has also instituted several intelligence initiatives to support mortgage fraud investigations and has improved law enforcement and industry relationships. The FBI has established methodology to proactively identify potential mortgage fraud targets using tactical analysis coupled with advanced statistical correlations and computer technologies.

Coach Mitch

These last two paragraphs are a good example of government double-speak disguised as agenda setting marketing. What it does not say but is doing: the FBI is the instrument of the Power in this country. The FBI will root out regular citizens trying to make a living and it will misdiagnose their actions so as to mislabel them as villains in order to not go after the real villains, their bosses – the Power.

The FBI has purposefully not gone after those who make the decisions within the banking industry, the bosses. Not a single loan closes without the bosses express approval, and the bosses only approve loans that they want to close. For every government regulation there is a banking work around. Each regulatory effort to make loans safe comes up against the desire to make a bonus. I doubt that a banking regulation goes into effect without the banker knowing how he will legally work around that regulation. It is the job of the bank to take information and check it. But checking reduces income. And why check if the taxpayer will pay the penalty? That is the problem. Sadly, a once great institution has allowed itself to be turned into an instrument of state policy to defraud US.  The FBI is a functioning part of the Miscreant Class.

Coach Mitch

Government Overreach

The FBI, as an agent of The Power, knowingly does not examine the most important question, why banks did not and are not currently checking the information that applicants give.  This glaring omission brands the FBI as culpable in the effort to enslave US.

Requiring a license, restricting commerce, eliminating property rights, and creating scapegoats; these are the hallmarks of Gotcha Government.  The Dodd/Frank SAFE Act enshrines these principles.

“The right to sell is one of the rights of property.” –Thomas Jefferson to Handsome Lake, 1802. ME 16:395

The ability to sell is inherent within the right to sell.  The terms of the sale are inherent within the ability to sell.

Government has allowed/created a financial climate whereby banks are not giving mortgages to most potential borrowers.  For the foreseeable future, owner financing is virtually the only way a buyer will be able to purchase your property.  You must be the bank.

By requiring a seller to have a mortgage license in order to create a mortgage on his own property, the government is placing an unreasonable burden on the seller, and has therefore severely reduced his ability to sell.

The government further stacks the deck by only allowing an owner financed mortgage to be created that has terms identical to a bank mortgage.  In addition, a balloon or quick payoff is not allowed so a retired person cannot sell his property and expect to get monthly payments for a short period, five years, and then get the rest of the balance.  The retired person must wait 30 years to be paid in full, a requirement that is not practical.  Both of these requirements do not allow for the terms of a sale to be created by the buyer and seller.  This is gross interference by the government into the rightful affairs of a free citizen.

The Constitution has stipulated that a “taking” of property by government requires “just compensation.”  Congress has severely reduced the ability to sell our property and has thus “taken” the profit that could have been gained and therefore owes US “just compensation.”  That this infamous legislation passed indicates the path of our destruction and a culpable Congress.  Forces inimical to freedom are controlling our ability to sell our property.  Control of the means of production, property, is called Fascism.

As outlined in the Federalist, the proper role of government is the defense of our rights to life, liberty and property, against any incursion, especially from government.  A violation must have occurred and only then should the government get involved to punish the violator.   This is referred to as Negative Government.  Positive Government is the aggressive use of law to prevent something from happening.  “Protection” is the term used by government to confuse uneducated citizens.  Government creates law to protect US from a potential negative act and we become less free because we are all required to act in a certain manner.  We are all presumed to be violators, eliminating our constitutionally mandated presumption of innocence.  Power is thus granted to government to restrict our actions in any way it sees fit.

With the SAFE Act, the government says it “protects” US from a future mortgage crisis by restricting those who can do mortgages and limiting the terms of the mortgage.  Rather, government should be defending US by aggressively prosecuting those specific individuals who created the mortgage crises and any bad mortgages.  You can be sure that there would never again be a mortgage crises if the CEO’s and Boards of Directors of the Too Large To Fail Banks were now rotting in jail alongside the CEO of Goldman Sacks, et al.

The Solution

The only way to fight evil is to overcome it. Fight fire with a conflagration of your own. Fight the banks and government by earning your own money and becoming independent. In this manner, we will win the day, but only if you are a good example to fellow citizens.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Gird your loins – the battles ensue.

Part 3 of 4

Federal Bureau of Investigation

2010 Mortgage Fraud Report

Read the entire 52 page report: FBI: licensed brokers/bankers/lawyers do lots of mortgage fraud

The purpose of this study is to provide insight into the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens . . .

Read More: FBI: Licensed Brokers/Bankers/Lawyers doing mortgage fraud. Part 3 Post 179]]> Coach Mitch’s REFLECTIONS™

Part 3 of 4

Federal Bureau of Investigation

2010 Mortgage Fraud Report

Read the entire 52 page report: FBI: licensed brokers/bankers/lawyers do lots of mortgage fraud

The purpose of this study is to provide insight into the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens during 2010.

Foreclosure Rescue

Foreclosure rescue schemes are often used in association with advance fee/loan modification program schemes. The perpetrators convince homeowners that they can save their homes from foreclosure through deed transfers and the payment of up-front fees. This “foreclosure rescue” often involves a manipulated deed process that results in the preparation of forged deeds. In extreme instances, perpetrators may sell the home or secure a second loan without the homeowners’ knowledge, stripping the property’s equity for personal enrichment. For example, the perpetrator transfers the property to his name via quit claim deed and promises to make mortgage payments while allowing the former home owner to remain in the home paying rent. The perpetrator profits from the scheme by re-mortgaging the property or pocketing fees paid by desperate homeowners. Often, the original mortgage is not paid off by the perpetrator and foreclosure is only delayed.

According to FBI case analysis, mortgage fraud foreclosure rescue investigations comprised 2 percent of all mortgage fraud cases opened in FY 2010.

Coach Mitch

I have never seen a foreclosure rescue scheme, nor have I heard of anyone doing it in my area; however a loan officer recently told me he knew of many situations where fraudulent foreclosure rescue occurred.  In NY a law was passed that makes it so onerous to do foreclosure investing that it dried up. More government misapplied overkill. The government should have come down hard on any perpetrators of fraud. Instead, the government eliminated any hope a person in foreclosure has of selling to an investor, usually their only potential buyer. Now the banks get all the properties. I am told that the banks are not in the real estate business – more nonsense.

I found out about this law a bit too late. I had arranged an interview with the chief assistant to the gubernatorial candidate of the NYS Republican party along with another prominent investor, expressing misgivings about this potential law. The other investor said that the main witness for the law, who had testified before the state legislative committee, had been a client of his and the testimony was a complete fabrication and he could prove it. The chief assistant called to get a status report on the law and said that the law had been passed on the last day of the session along with hundreds of other laws and the governor had signed it into law just a few days previous.

In the future, I will write a complete analysis of this law, which is being copied in other states.  I believe the law is totally unconstitutional.

Builder Bailout Schemes

Builders are employing builder bailout schemes to offset losses and circumvent excessive debt and potential bankruptcy as home sales suffer from escalating foreclosures, rising inventory, and declining demand. Builder bailout schemes are common in any distressed real estate market and typically consist of builders offering excessive incentives to buyers, which are not disclosed on the mortgage loan documents. In a common scenario, the builder has difficulty selling the property and offers an incentive of a mortgage with no down payment. For example, a builder wishes to sell a property for $200,000. He inflates the value of the property to $240,000 and finds a buyer. The lender funds a mortgage loan of $200,000 believing that $40,000 was paid to the builder, thus creating home equity. However, the lender is actually funding 100 percent of the home’s value. The builder acquires $200,000 from the sale of the home, pays off his building costs, forgives the buyer’s $40,000 down payment, and keeps any profits.

Coach Mitch

The bank underwriting [checking] is at fault, again. The bank merely needs to insist upon the actual verification of funds from the buyer. However, if the bank did this, then very few loans would close, so they just wink. But the FBI chases the builder instead of going after the bank.  The FBI also is not going after the appraiser who must over appraise the property by the $40,000.

Debt Elimination/Reduction Schemes

FBI reporting indicates a continued effort by sovereign citizen domestic extremists throughout the United States to perpetrate and train others in the use of debt elimination schemes. Victims pay advance fees to perpetrators espousing themselves as “sovereign citizens” or “tax deniers” who promise to train them in methods to reduce or eliminate their debts. While they also target credit card debt, they are primarily targeting mortgages and commercial loans, unsecured debts, and automobile loans. They are involved in coaching people on how to file fraudulent liens, proof of claim, entitlement orders, and other documents to prevent foreclosure and forfeiture of property.

Coach Mitch

There is a legitimate line of philosophic thought surrounding the idea of the citizen as a “sovereign.” Learn about this issue yourself. The FBI labels these sovereign citizens “extremists.” See what you think about how our vaunted FBI mislabels citizens, the very people they are sworn to defend.

Legislative Issues

Dodd-Frank Act

The Dodd Frank Act (DFA) was created to address various issues that occurred during the financial crisis. According to MBA, the DFA will establish the Consumer Financial Protection Bureau (CFPB) and set strict standards and regulations for processing mortgage loans. To protect consumers from fraud, the CFPB will: (1) regulate strict guidelines for appraisers and licensing to appraisal management companies; (2) oversee and have total responsibility for consumer financial protection laws; (3) add more layers to disclosures, licensing, and process regulation with loan originators, reverse mortgages, mortgage companies, and advertising practices; and (4) harmonize the TILA and RESPA disclosure.

The new act will prohibit the use of BPOs as the primary benchmark for the value of a property being purchased. Additionally, the CFPB will oversee consumer protection laws, including TILA and RESPA. The DFA will require lenders to be accountable for the cost it provides to borrowers during the loan application process. The legislation will modernize the real estate appraisal regulation by enforcing actions against states and appraisers that do not abide by the new regulation. Also, there will be a new appraisal standard board and appraisers should follow the new regulations. The DFA is set to better regulate consumer protection laws and help reform Fannie Mae and Freddie Mac.

Coach Mitch

The answer of government is always and in all ways to expand its own power and reach. Government does this by making up more regulations. The newest iteration is the Consumer Financial Protection Board, CFPB.

Government creates mortgage regulation, for our “protection.” Bankers create ways to go around the rules so that they can do business. The result is a government created financial crises which is then “fixed” by the creation of a new super agency to make more rules.

BTW, the result of new regulation is always a business contraction and consolidation of an industry. In this case, already in New York State, fully one third of the mortgage brokers have gone out of business because of the new rules; see SAFE Act below.

Federal Trade Commission’s (FTC) Mortgage Assistance Relief Services (MARS) Rule

The FTC rule on MARS prohibits charging advance fees for loan modification services, but states that attorneys are the exception [because lawyers are known to have the highest of ethical standards ed.] to the rule and are therefore permitted to charge an advance fee provided some stipulations are met.

The Secure and Fair Enforcement Act

The Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act—enacted in July 2008— required states to have a licensing and registration system in place for all loan originators by July 31, 2010, to reduce mortgage fraud and enhance consumer protection.

Coach Mitch

This requires that anyone creating a mortgage must be licensed to do so.  According to the new law, a regular citizen must be licensed as a mortgage originator if he wants to carry a mortgage against his own property, making it much harder to sell your own property, especially in a market where credit is tight. When banks won’t lend, virtually the only way selling can be done is if the seller carries the financing. The government has stopped this. The government makes a criminal out of someone trying to sell their home. Now that’s criminal.  I believe that it is also unconstitutional.

Worse; the government puts conditions on creating a private loan such that the only persons who can be given a privately created loan are those who qualify for a regular bank loan.  If the buyer could get a regular loan, then they would not need a seller to create a private loan.  And you can’t create a private loan except with the same terms as a regular bank loan; hardly something you would do. Therefore, the government says you can still create a loan, if licensed, but they eliminate any real ability for you to do it. This bit of chicanery gets the “Miscreant Class” award for today.

The only way to fight evil is to overcome it. Fight fire with a conflagration. Fight the banks and government by making your own money and being independent. In this manner, as a good example to fellow citizens, we will win the day.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Gird your loins – the battles await,

See Part 4 of 4

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com

Part 2 of 4

Federal Bureau of Investigation

2010 Mortgage Fraud Report

Read the entire 52 page report: FBI: licensed brokers/bankers/lawyers do lots of mortgage fraud

The purpose of this study is to provide insight into the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens during . . .

Read More: FBI: Licensed Brokers/Bankers/Lawyers doing mortgage fraud. Part 2 Post 178]]> Coach Mitch’s REFLECTIONS™

Part 2 of 4

Federal Bureau of Investigation

2010 Mortgage Fraud Report

Read the entire 52 page report: FBI: licensed brokers/bankers/lawyers do lots of mortgage fraud

The purpose of this study is to provide insight into the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens during 2010.

Mortgage Fraud

Mortgage loan origination fraud is divided into two categories: fraud for property/housing and fraud for profit. Fraud for property/housing entails misrepresentations by the applicant for the purpose of purchasing a property for a primary residence.

[A] Backwards Application Scheme fabricates the unqualified borrower’s income and assets to meet the loan’s minimum application requirements.

Coach Mitch:

I only saw this done regularly by one loan officer. However, when a loan program is entitled No Income Check, No Asset Check, the banking system is telling the applicant that it wants to make a loan, no matter the income or the assets of the applicant.

For the banks and the government to feint surprise that people lie to get what they want is the most hypocritical of all positions.

A CPA will maintain to the IRS that he only reports what the client gives in paperwork. The same happens with loan originators. Loan originators ask for financial data and people give what makes them look good. Wouldn’t you? The fall down comes in the underwriting, the checking. This is done by the bank – but in reality, the banks don’t check. If the bank did check for income or assets, the applicants would not be able to show them and because of that the bank wouldn’t do loans, so the bank does not check, and loan originators understand this.

Fraudulent Appraisal schemes and

Title/Escrow/Settlement Fraud/Non-Satisfaction of Mortgage

Coach Mitch

I can’t say this doesn’t happen, but I never saw it. Appraisers know that they won’t get continued business if their appraisals are too low and they will be wary of being in trouble with HUD if the appraisals are running too high. Appraisals that I saw were always within 10% of fair market value.

Real Estate Investment Schemes

In a real estate investment scheme, mortgage fraud perpetrators persuade investors or borrowers to purchase investment properties generally at fraudulently inflated values. Borrowers are persuaded to purchase rental properties or land under the guise of quick appreciation. Victim borrowers pay artificially inflated prices for these investment properties and, as a result, experience a personal financial loss when the true value is later discovered.

Coach Mitch

I have seen some of this. Typically it has been done in ghetto areas. Here also, the government is the villain. The government wants the ghetto inhabitants to own their home, in the hope that home ownership will stabilize the neighborhood. Since these properties usually need substantial work, an investor will pick up the property cheap, often use a government fix-up program to make the property pretty and then find an applicant who can qualify for that government guaranteed loan program. The loan must be government guaranteed because few banks want to loan in a ghetto.  Government always pays the highest prices because that is the cost of implementing policy.

Sadly, ghettos remain ghettos because the inhabitants do not change habits.  A person not used to paying their bills on time will continue to not pay their bills on time – especially after they get a new mortgage, because now there are even more bills that probably won’t be paid on time.  There are government programs to teach applicants how to pay their bills, however old habits are hard to break.

Short Sale Schemes

A real estate short sale is a type of pre-foreclosure sale in which the lender agrees to sell a property for less than the mortgage owed. Short sale fraud consists of false statements made to loan servicers or lenders that take the form of buyer or seller affirmations of no hidden relationships or agreements in place to resell the property, typically for a period of 90 days. One of the most common forms of a short sale scheme occurs when the subject is alleged to be purchasing foreclosed properties via short sale, but not submitting the “best offer” to the lender and subsequently selling the property in a dual closing the same day or within a short time frame for a significant profit. Reverse staging and comparable shopping techniques are currently being used by fraud perpetrators in the commission of short sale frauds. The fraud primarily occurs in areas of the country that are experiencing high rates of foreclosure or homeowner distress.

Industry sources report that in the process of committing short sale fraud, fraudsters are manipulating the Broker Price Opinions (BPOs) and MLS; engaging in non-arms-length transactions; using LLCs to hide their involvement in short sale transactions; failing to record short sale deeds of trust; using back-to-back and multiple real estate agent closings; selling properties to an LLC or trust months before the sale; selling the property to a family member or other party the fraudsters control and deeding the property back to themselves; engaging in escrow thefts, simultaneous double sales to Fannie Mae and Freddie Mac, and failing to pay off the original loan in a refinance transaction; property flipping; bribing brokers and appraisers; refusing to allow the broker or appraiser access to the property unless the fraudster is present; providing their own comparables to the appraiser; taking unflattering photographs of the property and pointing out defects in the property to the appraiser; providing false estimates of repair, rebuttal of appraisal, and selection of poor comparable properties; and facilitating the partnership of attorneys with non-attorneys to split fees acquired during short sale negotiations.

Coach Mitch

Real estate professionals work hard, trying to make a living by selling shorts.  The banks make it almost impossible, and then there is the government, making it even worse. Providing comparable housing figures to an appraiser is part of an investor’s job – but the FBI calls it mortgage fraud.  Ridiculous!  On many occasions I pointed out defects in the property or made sure that a property’s good features were noticed.  That is now called mortgage fraud.  A few times I rebutted the appraisal and asked the appraiser to justify his numbers.  Even that is termed mortgage fraud.  Absolute nonsense!  This is governmental interference in commerce, something they are used too.

There are serious situations where a group of persons will manipulate the property and the financing to make fraudulent profits.  These should be prosecuted to the fullest extent of the law and I wish they were, we would all be better off.  I was the president of a large real estate investors association for a long time and I did mortgages for a long time; but I only heard of a handful of these types of situations.

The only way to fight evil is to overcome it. Fight fire with a conflagration. Fight the banks by making your own money.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Gird your loins – the battles await,

See Part 3 of 4

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com

Part 1 of 4

Coach Mitch’s Editorial Comment

The sections of the report I comment about are provided in full and within context.  To read the entire 52 page report goto: FBI: licensed brokers/bankers/lawyers/appraisers/loan officers do lots of mortgage fraud

Targeting mortgage fraud

The idea behind the study is excellent: to determine who perpetrated mortgage fraud so as . . .

Read More: FBI: Licensed brokers/bankers/lawyers doing mortgage fraud. Part 1 Post 177]]> Coach Mitch’s REFLECTIONS™

Part 1 of 4

Coach Mitch’s Editorial Comment

The sections of the report I comment about are provided in full and within context.  To read the entire 52 page report goto: FBI: licensed brokers/bankers/lawyers/appraisers/loan officers do lots of mortgage fraud

Targeting mortgage fraud

The idea behind the study is excellent: to determine who perpetrated mortgage fraud so as to prosecute the culprits and stop it from continuing.

Sadly, the fix was in and the finger of blame is fixed on those carrying out policy instead of blaming the makers of the policy. In finance, just as in politics, nothing happens unless the bosses want it to happen. The real culprits of the mortgage crises, the CEO’s of the banks and Wall Street, are entirely ignored. Instead, the finger of blame is pointed at underlings. Such are the perks of power. RHIP. (Rank Has It’s Privileges)

Federal Bureau of Investigation

2010 Mortgage Fraud Report

The purpose of this study is to provide insight into the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens during 2010.

Mortgage Fraud

Mortgage fraud is a material misstatement, misrepresentation, or omission relied on by an underwriter or lender to fund, purchase, or insure a loan. This type of fraud is usually defined as loan origination fraud. Mortgage fraud also includes schemes targeting consumers, such as foreclosure rescue, short sale, and loan modification.

Key Findings

* Mortgage fraud continued at elevated levels in 2010,…fraud schemes are particularly resilient, and they readily adapt to changes in lending practices.

* Mortgage fraud perpetrators include licensed/registered and non-licensed/registered mortgage brokers, lenders, appraisers, underwriters, accountants, real estate agents, settlement attorneys, land developers, investors, builders, bank account representatives, and trust account representatives.

Coach Mitch:

Missing from the list of perpetrators are the policy makers. As I read the report I was interested to see that, IMHO, the FBI has some suppositions correct, but they fail to point out the big reasons for the banking crises – bank CEO and Wall Street mortgage fraud.  Why am I not surprised that CEO’s and Wall Street types are not targets of this fraud investigation.

You will see that the above mentioned fraud perpetrators are all licensed professions.  The government’s number one crime prevention tool is to demand that everyone is licensed.

Since it is obvious that licensing does not stop a criminal mind from doing crime, why have licensing?  Licensing is one of government’s main tools to control the workforce, that’s why.

* Prevalent mortgage fraud schemes reported by law enforcement and industry in FY 2010 included loan origination, foreclosure rescue, real estate investment, equity skimming, short sale, illegal property flipping, title/escrow/settlement, commercial loan, and builder bailout schemes. Home equity line of credit (HELOC), reverse mortgage fraud, and fraud involving loan modifications are still a concern for law enforcement and industry.

Coach Mitch:

The above schemes are all approved programs.  When reading the report, even an innocent misstatement is labeled “mortgage fraud.”

For a loan originator to do a loan successfully, significant financial information is needed and often the details are manipulated to show the applicant in the most favorable light.  This is being labeled as mortgage fraud.

There are limits however.  Banks want to know about an applicant’s assets, which can be hyped, but it is not smart to list $100,000 of imaginary stock and then state that money is not available for a down payment.  The bank will be suspect were the applicant to not want to sell some stock to raise the down payment.  Besides, I always got a statement from the brokerage house showing the value of the asset, which also proved that the asset existed.

* A continued decrease in loan originations…high levels of unemployment and housing inventory, lower housing prices, and an increase in defaults and foreclosures dominated the housing market in 2010… 2.9 million foreclosures in 2010, representing a …23 percent increase since 2008.

* Analysis…indicates the top states for…mortgage fraud activity during 2010 were California, Florida, New York, Illinois, Nevada, Arizona, Michigan, Texas, Georgia, Maryland, and New Jersey.

Dark states have 50% seriously delinquent ARM's

Estimated fraudulent loans

FBI

FBI mortgage fraud pending investigations totaled 3,129 in FY 2010, a 12 percent increase from FY 2009 and a 90 percent increase from FY 2008. According to FBI data, 71 percent (2,222) of all pending FBI mortgage fraud investigations during FY 2010 (3,129) involved dollar losses totaling more than $1 million.

In FY 2010, HUD-OIG had 765 pending single-family residential loan investigations, a 29% increase from the 591 pending during FY 2009. This also represented a 70% increase from the 451 pending during FY 2008.  Fraud schemes reported by HUD in ongoing investigations include flopping, reverse mortgages, builder bailout schemes, short sales, and robo-signing.

Coach Mitch:

Imagine, there are 2.9 million foreclosures and the FBI touts 765 residential loan investigations, and that is a whopping 29% increase over 2009.  The FBI is really on the job!  [sarcastic] Not only are the major bank CEO’s not being held accountable, the licensed financial professionals are also not being held accountable.  Our government at non-work. [sarcastic]

The only way to beat evil is to overcome it. Fight fire with a conflagration. Fight the banks by making your own money, earning more that is.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Gird your loins – the battles await,

See Part 2 of 4

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com

The following set of 10 emails is a conversation I had with a student. This is a typical conversation that I have with anyone who tries Coach Mitch’s Tax Delinquent Property “Ridiculously Simple System…”™

In this case, Cheryl is using Coach Mitch’s “famous $1 Option.”™

1  From: Cheryl

To: CoachMitch@CoachMitch.com

Subject: . . .

Read More: Coach Mitch’s famous $1 Option does it again! Post 176]]> Coach Mitch’s REFLECTIONS™

The following set of 10 emails is a conversation I had with a student. This is a typical conversation that I have with anyone who tries Coach Mitch’s Tax Delinquent Property “Ridiculously Simple System…”™

In this case, Cheryl is using Coach Mitch’s “famous $1 Option.”™

1  From: Cheryl

To: CoachMitch@CoachMitch.com

Subject: Forms

Mitch,

What I sent you yesterday without looking it over closely before doing so, is a loan servicing agreement. I think the attached may be the forms we needed to look at that serve as the promissory note and sale agreement.

Cheryl

2  From: Mitchell Goldstein [mailto:coachmitch@coachmitch.com]

To: Cheryl

Subject: RE: Forms

Cheryl,

Thanks.  I’ll try to look at the doc this evening.  I’m at a rehab site all day.  I came home last evening too tired to do anything.

Mitchell Goldstein – Coach Mitch

3  From: Cheryl

To: ‘Mitchell Goldstein’

Subject: Forms

No really hurry, Mitch.  Anytime by the end of next week would be great.

4  From: Mitchell Goldstein [mailto:coachmitch@coachmitch.com]

To: Cheryl

Subject: Option

Cheryl,

Did you get any movement on your offer?

Mitchell Goldstein – Coach Mitch

5  From: Cheryl

To: ‘Mitchell Goldstein’

Subject: RE: Option

Yes, my option to purchase was accepted and I have the signed/notarized option and memorandum of option back from the seller.  I will record the memorandum of option at the register of deeds office.  My sale price on the 2 acres is $33,000 – I think the property could be worth $40-$45,000.

I drove out today to put up the for sale signs on the property and actually had someone stop to talk with me – he seemed very interested and said he would call me in a couple of days if he was definitely going to buy it.

6  From: Mitchell Goldstein [mailto:coachmitch@coachmitch.com]

To: Cheryl

Subject: RE: Option

Cheryl,

That sounds wonderful. Great job!

Did your seller object to any of the clauses in the option?  If so, what did you say in response?

Mitchell Goldstein – Coach Mitch

7  From: Cheryl

To: ‘Mitchell Goldstein’

Subject: RE: Option

He did not object to anything or even called me.  He just executed it and returned it.

8  From: Mitchell Goldstein [mailto:coachmitch@coachmitch.com]

To: Cheryl

Subject: RE: Option

Cheryl,

Isn’t that great!!?  Are you surprised?

Mitchell Goldstein – Coach Mitch
9  From: Cheryl

To: ‘Mitchell Goldstein’

Subject: RE: Option

Mitch,

I was surprised that he didn’t question anything.  I think in his financial situation he is just hopeful that it sells quickly and he gets something for the land – so he had nothing to lose.

10  From: Mitchell Goldstein [mailto:coachmitch@coachmitch.com]

To: Cheryl

Subject: RE: Option

Cheryl,

Sure.  A lowered price is what he has to lose.  In this market, the seller feels that he has no choice. The reason to concentrate on tax delinquent property is that the sellers are often feeling and thinking in this manner.

It is the only market subset where I have ever consistently found sellers to be highly motivated and also able to give away their equity.  Great job!  Do it again soon.

Mitchell Goldstein – Coach Mitch