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Posted by jmartinezclark on August 2, 2008
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Posted by jmartinezclark on December 21, 2007
Posted in foreclosure, investments, real estate | Tagged: foreclosure, greater american depression, pre-foreclosure, real estate investments, reo, short sale | 1 Comment »
Posted by jmartinezclark on December 21, 2007
Foreclosure is a financial and legal issue. If you attack the issue from a financial standpoint, you must to have cash to pay your mortgage. If you attack it from a legal standpoint, you must be able to find a flaw in the foreclosure lawsuit to dismiss it. I don’t see any other way of stopping foreclosure.
If you are facing foreclosure at this moment, you are inundated by letters from foreclosure assistance companies that charge outrageous amounts of money to negotiate with your lender; the majority of these companies are a scam.
You also get creative letters from so-called “investors” offering free advice and with the intention to make you sell your home to them at a deep discount using deceptive kitchen table closings in which they make you sign mysterious paperwork (land trusts, etc) that basically transfer the title/deed of your home to them sometime taking over your mortgage payments and leaving the loan liability on your name. Some of this “investors” also offer very deceptive “lease-back” arrangements in which they let you stay in your home as a tenant, and they pray that you stop paying rent so that they can evict you so that they can take possession of your house. You also get letters from Realtors® who are trying to make you list your home for sale and paint a rosy picture of the real estate market and the value of your home (Read National Consumer Law Center’s report “Dreams Foreclosed;” one of the best studies recently written about the rampant theft of American’s homes through equity-stripping foreclosure rescue scams).
Last but not least dangerous, you get letters from nice attorneys offering free consultations to make you file Chapter 13 bankruptcy; what these attorneys don’t tell you is that based on research (see studies: The Realities of U.S. Personal Bankruptcy under Chapter 13, and Chapter 13 Bankruptcy: Successful Versus Unsuccessful Debtors) the overwhelming majority of Chapter 13 filers do not complete their payment plans and are not discharged.
You will also find on the internet a proliferation of eBooks that promise to stop foreclosure magically with names such as “Foreclosure Free Zone,” “The Fight Of Your Life: How To Beat The Foreclosure Demons Smart Solutions For Saving Your Home,” “Avoid Foreclosure And Fix Credit Problems,” ”Foreclosure Help – Don’t Let The Bank Take Your Home!“ In my research, I’ve even bought some of these type of eBooks just to see what’s so magical about them, and found that they don’t have any information that isn’t common sense and readily available for free online. All the advice in these books fall into these categories: 1) Talk to your lender, 2) Sell your home, 3) File for Chapter 13 bankruptcy protection, and 4) Refinance/Get a loan. None of these books, nor the Chapter 13 attorney, nor the Realtors®, nor the “investors” in their white horses tell you about your legal rights and how you can defend yourself from the abuse of the debt collector attorneys.
Foreclosure is a financial and legal issue. If you attack the issue from a financial standpoint, you must to have cash to pay your mortgage regardless of negotiating a payment plan with your lender yourself or through a foreclosure assistance/consulting company. Bear in mind that when negotiating a payment plan with your lender (sometimes called Forbearance Agreement) , you may be required to come up with a lump sum (usually half of your past-due payments) and proof of income. It’s very simple; if you have sufficient cash and/or income to pay your monthly mortgage obligation, it’s very likely you can negotiate something with your lender to stop foreclosure. If you don’t have the cash and/or the income, you will have to attack the issue from a legal standpoint.
If you attack the issue from a legal standpoint, you must learn about your legal rights and, preferably with the help of a consumer protection attorney (www.naca.net), find a technical or legal flaw in the lawsuit to have it dismissed. These flaws could be hidden in the lender’s debt collection attorney not following your state’s rules of civil procedures (for instance: You were served improperly) or by digging into the foreclosure complaint and court docket to see if there is an actual plaintiff’s proof of ownership of the promissory note, or if the original promissory note has been filed in the court records, or any of the other twenty-something reasons that that could render a judgment void or invalid.
There is no magic in foreclosure. If a homeowner doesn’t pay his or her mortgage, the lender will foreclose on their homes. There is no magical negotiation with a lender that can be done without cash at hand and/or ability to pay supported by proof of income. There is a lot of literature on the internet and in bookstores about the debt collection industry, on how to stop foreclosure negotiating with the mortgage lenders, about how debt collections works, about what to expect from debt collectors, etc, etc. However there is little information about how to navigate the legal system, on how to file pleadings and motions and on how to execute the steps necessary to win the debt collection/foreclosure battle in court. Almost nobody explains to homeowners in simple terms how the legal system works and how they can use it to your advantage to win debt collection lawsuits.
Posted in foreclosure | Tagged: avoid foreclosure, debt collectors, foreclosure, foreclosure help, stop foreclosure | 3 Comments »
Posted by jmartinezclark on December 21, 2007
According to several experts, the residential real estate market is poisoned to deflate at around 40%-50% in many areas of the country, specially in high speculative areas such as in California, Florida, Arizona, etc. Furthermore, foreclosures will greatly increase in the country according to several statistics and projections. It doesn’t take more than to look at the work of the prominent economist H.S. Dent (http://www.hsdent.com) or doing a quick search in a bookstore for a myriad of recent economic books that talk about the upcoming Greater American Depression.
Many homeowners have a very difficult decision to make in these historical economic times. Their properties are in a position now that it’ll be extremely difficult to make them cash flow positive as rentals, and/or to sell them for more than what their underlining mortgages are. It’s overwhelming to see the amount of new investors created during the 2001-2005 residential real estate boom. These investors where speculators with little investment education who wanted to jump on the train of quick real estate appreciation; in many occasions renting their properties out and getting negative cash flow in exchange for hopes of future appreciation. They ignored well known facts in the professional investment world: In order to get positive cash flow, most of the time you need to buy in the rare market where high cap rates are the norm (annual net operating income divided by property price. For example, a $1,000,000 property with $60,000 of net operating income per year has a cap rate of $60,000 ÷ $1,000,000 = 6%.). Such markets are usually severely depressed like Anchorage or Oklahoma City in the late 80’s. The reason tenants are willing to pay more to rent than they would have to pay to own in such markets is that they believe property values are falling or level, in which case not owning is a good idea in spite of the high rent.
Even then, the positive-cash-flow situation is typically a brief window that lasts only six months to a year. Positive cash flow is so rare and so desirable that it attracts out-of-area investors. Their coming into Anchorage or Oklahoma City or wherever drives the prices up so that high cap rates are no longer available.
The other way to achieve positive cash flow is to make a bargain purchase like at a foreclosure auction or out of probate. In that case, you have a low loan-to-value ratio, even though your loan-to-purchase-price ratio may not be low. When you achieve a positive cash flow through a bargain purchase, you generally should sell out soon because your extraordinary amount of equity will result in your return on equity being low.
Return on your investment is interesting to look at initially, but after purchase, you should switch to looking at your return on current equity. Dividing current net operating income by past purchase price is a misleading apples-and-oranges comparison. Return on investment (down payment and closing costs) will be high initially and climb higher if you bought right; but return on current equity (current market value of property less current mortgage balances), which is the correct denominator, will show a low and falling rate of return. That tells you to redeploy your money to where it can earn a higher return.
Basic financial education suggests that It doesn’t make sense to continue investing in an asset that is rapidly deteriorating in value to the point where a property will perhaps be worth about 40%-50% less than what it was bought for. What perhaps started as an asset with some equity when the homeowners purchased the property, is now a draining financial liability.
The most recommended approach now for property owners trapped with negative cash flow rental properties or trapped in a personal residence they can’t sell with or without equity, would be to speak with the mortgage lenders about possible options; banks should be nowadays more willing to negotiate financial loan terms in order to avoid foreclosure (be aware that most banks don’t offer much assistance unless a homeowner is already behind in his/her payments and has been sued with a foreclosure complaint).
If the homeowner decides to stop paying the monthly mortgage obligation, after 3-4 months of no mortgage payments, the lenders will start legal foreclosure proceedings, and in about 6 months or so (depending on the state laws where the property is and how busy is for a trustee or the county court house to schedule a sale due to the present high volume of homes in foreclosure), his/her property(ies) will be sold at public auction. At the public auction, is very common nowadays that no private/individual buyer bids and purchases the property(ies), thus forcing the lender to take the property(ies) back and try to sell them in the open market with a real estate agent (which doesn’t guarantee that the properties will be sold anytime soon). After the homeowner is sued and before the property(ies) are sold at the foreclosure auction, the homeowner can have a local real estate agent list them for sale in the MLS (Multiple Listing Service), and if the agent is lucky enough to find a buyer before the foreclosure auction takes place, the lender could accept what is called a “short-sale” in which the lender accept a lesser payoff amount than what the homeowner owes as a payoff in his/her mortgage, so that the lender can avoid more loses in the future. Homeowners must contact their lenders directly to request a short-sale package to be sent by fax and/or mail. Roughly, the steps for a short-sale are the following:
- Request a short-sale package from both lien holders.
- Get a buyer for the property; preferably at a price close to the fair market value of the home
- Submit to lien holders short-sale packages with requested information (preliminary HUD-1, hardship letter, W2’s, bank statements, income tax returns, purchase and sale agreement with a new buyer, etc)
- Obtain approval by both lien holders individually in the form of a payoff letter. Make sure that in the payoff letter the lenders waive their rights to a mortgage deficiency judgment
- Submit payoff letter(s) to closing agent.
- Close on the purchase.
Many homeowners across the country are faced with this dilemma: They either keep their high credit scores and get stressed and financially drained with a depreciating asset that will probably be worth 40%-50% less than when purchased, or get rid of the assets in foreclosure, get rid of the stress, and keep their hard-earned cash to buy more properties in 2012-2014 or so when the market is perhaps expected to hit bottom and they will be able to create massive wealth in the upturn of the new real estate cycle that will probably peak in 2022-2023 or so.
Bankruptcy is another option, however, an attorney should be sought for it. If you are considering filing for Chapter 13 bankruptcy protection, be aware of something that your attorney will perhaps not tell you: Based on research papers, the overwhelming majority of Chapter 13 filers do not complete their payment plans and are not discharged (see The Realities of U.S. Personal Bankruptcy under Chapter 13, Hülya Eraslan Wenli Li and Pierre-Daniel Sarte, February 14, 2007 and Chapter 13 Bankruptcy: Successful Versus Unsuccessful Debtors, David A. Evans, Utah State University and Jean M. Lown, Utah State University, 2003)
Since, I’m neither a financial advisor, nor a legal advisor, I’m not legally suitable to recommend a course of action and this is a very intimate and personal decision based on the homeowner’s personal priorities in life. They have to arrive at their own conclusions based on the facts that I’m providing and other facts that they accumulate in their research.
Posted in debt collection, foreclosure, real estate | Tagged: cash flow, real estate investing, rental home, rental property, short sale, stop foreclosure | 1 Comment »
Posted by jmartinezclark on December 1, 2007
As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers. In the last past weeks there have been important events unknown by many homeowners and individuals facing debt collection lawsuits. In a study of foreclosures, Katherine Porter of the University of Iowa found questionable fees on almost half of the loans and discovered that though bankruptcy laws require documentation that a creditor has a claim on the property, 4 out of 10 claims in Ms. Porter’s study did not attach such a promissory note. The second event is a court ruling on October 31, 2007 in which a federal judge in Ohio has ruled against a longstanding foreclosure practice, potentially creating an obstacle for lenders trying to reclaim properties from troubled borrowers and raising questions about the legal standing of investors in mortgage securities pools. The third event is another ruling on November 15, 2007 by a federal judge in Ohio who has given lenders 30 days to prove that they own the promissory notes on the properties they intend to seize from troubled homeowners in 27 other cases. In a fourth event according to the New York Times article dated November 28, 2007 and titled “Foreclosures by Lender Investigated,” the federal agency monitoring the bankruptcy courts has subpoenaed Countrywide Financial, the nation’s largest mortgage lender and loan servicer, to determine whether the company’s conduct in two foreclosures in southern Florida represented abuses of the bankruptcy system.
The sighting of a robin does not make a spring, nor do the actions of four judges constitute a trend. Nevertheless, the fact that some courts are taking a harder look at foreclosure practices may foretell a shift in attitudes. In the fourth event involving Countrywide, there is every indication that Countrywide was not alone in the practices at issue. So what makes this story interesting is that it is another example of a subtle shift in power in the judicial system. The plaintiffs have considerably more resources than the mortgage holders (the homeowners), most of whom cannot mount a fight; but judges may be starting to recognize that that power imbalance has led many banks to be sloppy, presumptuous, and at times extortionate, and at least a few jurists are holding their feet to the fire. In this case, the issue was charges Countrywide added to mortgage balance in two bankruptcy filings. When the borrowers objected, Countrywide did not appear at the hearing, leading the judge to remove those costs. Countrywide’s failure to respond piqued the interest of the bankruptcy trustee, leading to the investigation. Note the judge ruled against Countrywide’s objections to trustee’s subpoenas.
The media needs to bring to the public eye that It has long been a common practice for lenders to bring foreclosure proceedings without attaching proof of ownership of the underlying note. Tracking down such documentation may be more challenging because of securitization, the pooling of mortgages into trusts that are subsequently sold to investors. The proliferation of legal education books and events such as the ones named above are a waking call for the lending and legal industries; thus making the job of a debt collector attorney more difficult after enjoying decades of easy judgments against individuals who don’t know their rights. As Ms Porter’s study suggests, if one were to carefully analyze debt collection cases, one would probably discover that many of them lack legal standing due to insufficient proof of claims. The amount of debt collection void judgments in our courthouses is perhaps so vast, that it’s almost impossible to estimate how many there are. If every void judgment were vacated with damages, the whole financial and legal system would crumble perhaps representing an unprecedented shift in wealth.
Posted in debt collection, foreclosure | Tagged: debt collection, foreclosure, void judgments | Leave a Comment »
Posted by jmartinezclark on November 30, 2007
By the time you receive this message, my 86-year old father would had undergone two heart surgical procedures in Barranquilla, Colombia, South America, on the night of yesterday November 28th, 2007: 1) arterial bypass surgery, and 2) a pacemaker insertion. According to the cardiologist in charge of his case, one of his arteries looked like a “chorizo;” I dare you to imagine the analogy. Imagine what 86 years of smoking, not exercising, eating white rice, potatoes, yuca, plantains, chorizos, chicharron (fried pork), occasional pizza on Sundays, fruits loaded with sugar, sugar in just about any drink, arepas and empanadas (deep fried corn dough), alcohol, and a myriad of other sweet treats, and delicious local fried and white-flour and grain specialties would do to your body. I think he’s very fortunate to have made it this far in his life. He also suffers from a kidney condition and high blood pressure. By the way my father is very slim, has no belly and weighs about 160 pounds. He is a practicing medical doctor with specialities in pneumology and radiology.
My father’s heart surgeries got me thinking about what I think is the most terrible disease of modern society: Misinformation. Misinformation is actually a disease and is very contagious; we all suffer from it. We suffer from it due to various causes; a) the media has told us either the wrong information or hasn’t told us the full story on a topic, b) because we associate with people who also carry the disease and further make us sick, c) because we seek the wrong specialist to cure us from the disease, and d) because we simply don’t care about being a victim of the misinformation disease.
Art Heinze, a dear friend and mentor once told me…”there are three type of people in the world: the ones who make things happen; the ones who see things happen; and the ones who simple don’t know what happens.” This is a brilliant thought and fits perfectly in my comments today. I’d add to Art’s thought a fourth category – the ones who don’t really care about what happens. Unfortunately most of the world’s population is in the second, third, and fourth category. Somebody once said…”we are robots programmed to be born, and then to obey, eat, study, work, consume, become old, and die.” We shouldn’t live our lives like robots.
We are surrounded by “misinformation” messages. The media, restaurants, our friends, our family; they all contribute to our information or to our “misinformation” about food and health. We’re bombarded by TV shows, newspaper and magazine ads, lunch and dinner invitations, family gatherings and other social events that linger our ability to think for ourselves. From the moment we are born we see people drinking sodas and sugar-full fruit juices, eating pizzas, grains, processed white flour, high quantities of red meat, processed foods, candies, sugars, and many other foods that I’m sure you know are bad for you. Our brain processes this information simply by telling us that if everybody is eating A, then A must be something we must eat and it’s OK to eat; we believe this (because we are in auto pilot and not thinking for ourselves), and we feel bad if we don’t act and eat like everyone else does.
Just to give you an idea of the multi billion dollar restaurant food industry, the US pizza industry reports the following on its website “…Not only did the pizza industry increase its volume of units between July of 2006 and July of 2007, sales saw one of the most significant rises in a few years. During this period the pizza segment saw a 3% increase in sales in both the QSR** and the CD** segments, which equates to an overall increase of $936,433,802 and brings the total U.S. pizza sales for these segments to $32,150,893,862 according to NPD Crest. This $32.2 billion in pizza sales represents 6.29% of the total ‘eating place’ restaurant sales in the U.S., which according to the NRA was $511 billion in 2006.” I don’t know about you, but I find this numbers very shocking. Pizzas are one of the worst foods we can consume and the industry is proud of reporting $32.2 billion in annual sales and a 3% annual growth. This tells you how “misinformed” our society is in regards to food consumption. Obviously is all about money; the food industry needs to make a profit and sell anything that people would eat regardless of the damaging health effects. If you study Alan Watt, David Icke and Alex Jones’ work, you’d know that their research suggest something really shocking and scary could be happening behind the scenes – population control. We are trading years of healthy life for the convenience of buying a $1 menu meal or a slice of pizza. I invite you to think that for every pizza slice, any fast food meal you eat, or any grain or sugar based meal you eat, you are diminishing your lifespan by a few hours.
The reason I think we all have been victims of the “misinformation” disease is that very likely nobody has told us in school, in the mass media, or in our encounters with “misinformed” family and friends, nor we see in restaurant menus, that “insulin” is perhaps one of the most important topics we have to learn about if we want to be considered part of the first category that I spoke about before – the ones who make things happen.
There are four time-tested, clinically proven gauges of health that you can use to determine your own level of health. They are:
• Insulin levels
• Weight
• Blood pressure
• Cholesterol levels
I will dedicate a few lines to insulin since it’s a very important and misunderstood substance, and you can read about the rest in just about any health publication.
What’s the deal with insulin levels? Sugar and grains cause your body to produce insulin and high insulin levels are the single largest physical cause of accelerated aging. If you want to slow down aging and stay healthy then you need to change your grains for greens. I will quote what Dr. Joseph Mercola says about it: “Well, you need insulin to live, but you probably have far too much insulin floating around in your body. Most adults have about one gallon of blood in their bodies and are quite surprised to learn that in that gallon, there is only one teaspoon of sugar! You only need one teaspoon of sugar at all times — if that. If your blood sugar level were to rise to one tablespoon of sugar you would quickly go into a hyperglycemic coma and die. You body works very hard to prevent this by producing insulin to keep your blood sugar at the appropriate level. This reaction keeps you from dying when you eat sugar. Unfortunately, it turns out that high levels of insulin are quite toxic for your body. Anytime you eat grains and sugars, you are increasing your insulin levels. If you have high cholesterol, high blood pressure, diabetes, or are overweight, it is highly likely that you are eating far too many grains. When I reference diabetes I am referring to the most common type, type 2 diabetes, which typically occurs in adulthood and is associated with increased weight. Type 1 diabetes is actually a problem with not enough insulin, as the pancreas loses the ability to manufacture it.” If you’d like to read about the importance of insulin and how it relates to many diseases, go here.
It’s really sad that in our society it’s a lot cheaper to buy a slice of pizza or a cheeseburger than to buy a healthy meal. First of all, it’s extremely difficult to find a true healthy meal on the streets. In my experience, the best option is to cook and eat at home. Despite all the literature available about healthy eating habits, and despite someone’s educational level, it’s very likely that changing someone’s eating habits could become a daunting task. The reason for this is that change is an emotional action, rather than a rational one. This is the reason that all diets are effective, but none of them work. A great quote that I found about change is by John Kotter: “Behavior change happens mostly by speaking to people’s feelings. This is true even for organizations that are focused on analysis and measurement, even among people who think of themselves as smart in a MBA sense. In highly successful change efforts, people find ways to help others see problems or solutions in ways that influence emotions, not just thought.”
Research seems to indicate that It’s very hard to change someone’s habits just by throwing rational information to that person; if emotions are not involved in the reason for changing someone’s behavior, all efforts could be fruitless. This explains why is common to see medical doctors and highly educated individuals making really bad food choices. Even more astonishing is the fact that in my experience, it’s almost impossible to find a healthy meal at the cafeteria or restaurant inside a hospital. That tells you a lot about the system and how widespread the “misinformation” disease is – not even hospitals can cure it.
The cure for the “misinformation” disease is in all of us. The fact that you’ve been eating sugar and grains all your life doesn’t mean you have to continue doing it. Control your insulin levels. Be curious, question absolutely everything you eat, find an emotional reason to change – wake up! I love my father very much, and I’m in emotional pain from seeing him suffer from the “misinformation” disease. Perhaps my father could have lived to be 120 years old if he would have cured himself from the “misinformation” disease.
Note: The first edition of my free “The Truth Report” newsletter will be delivered by December 1st, 2007. I’m very excited about this accomplishment and look forward to your feedback.
To Your Success,
Julio Martinez-Clark
Posted in health | Tagged: eating healthy, insulin | Leave a Comment »
Posted by jmartinezclark on November 23, 2007
Hello All, I had an urgency to tell the world what’s in my heart and mind. I see that we are living in a constant changing and evolving world and we get caught up in the daily activities of life in a modern society; we have little time to think about who we are and where we’re going. I decided to create a blog to share some of my ideas and discoveries in my search for the truth. Why search for the truth? Because I think we live in an illusory world; what you see is not what you get. I am sure you will find my blog very informative and inspirational in your own search for the truth. I believe there’s more happiness in giving and sharing than in receiving. Cordially, Julio Martinez-Clark
Posted in life, sharing, truth | Tagged: life, truth | Leave a Comment »