I did some thinking and realized that I’m getting side-tracked.
My original goal was to:
1) Write about my experience facing foreclosure and how I am dealing with it
and…
2) Help Over-Extended Borrowers - tips on how to stop foreclosure, save the home or sell it fast, decide when to file bankruptcy, getting out of debt, credit repair, and getting back on their feet.
This last week I got carried away to EXPOSING:
Shady Loans, Exposing the Real Estate Gurus, Exposing the Shady Real Estate Industry, and Going to Jail For Mortgage Fraud!
Where did all that come from?? How did I get so sidetracked? Here is how the events unfolded:
September 5th, 2006: In the beginning.
I launched IamFacingForeclosure blog with my properties for sale and I write my first blog post Why I am Facing Foreclosure
In that first post I talk about how I got over-extended as a real estate investor and happen to mention stated income loans (known as “liar loan” in the industry) and other potentially controversial stuff.
September 20th-23rd, 2006: Negative Exposure
I gets picked up by several blogs and websites, mostly the “housing bubble” variety like HousingPanic, HousingBubbleCasualty, and others.
See who linked to me via Technorati, Icerocket, MSN, Yahoo and Google
(You can also search for “Casey Serin” to see what’s been happening on the web.)
While some people were positive in their remarks, the MAJORITY were negative and brutal. See for yourself and read the comments for any entries in September.
Keep in mind… I am not hating on the Bubble Blogs… negative exposure is NOT necessarily bad. I was able to get lots of constructive criticism and advice out of it. Plus my properties got extra exposure and that’s always good.
Why so Negative?
I think people were negative because:
- Many (not all) people reading “Bubble Blogs” are negative to begin with.
- Me calling the loan “liar loan” made it seem REALLY bad.
- Some people DO NOT realize that these loans are pretty typical in the industry.
- It is controversial to be this honest about my situation.
- Many people think “flippers” and “speculators” are responsible for the real estate bubble - that’s debatable.
- Many think I am a bad person for investing because I am just greedy and want quick riches.
- People are bitter about sky-rocketing housing prices and need to blame somebody!.
Feeding on Controversy
Seeing all the negative comments and people I realized that my blog is pretty controversial. So I decided to continue with my “honesty” . I started leaning toward more controversial topics and then went over the top talking about Jail and Mortgage Fraud.
Bubble Blogs LOVED IT!
I liked the extra traffic too. The PROBLEM is that I started getting away from my original mission: getting out of foreclosure and writing about it to help others. Instead I started talking about shady loans, etc.
How “Illegal” is it REALLY?
When I mentioned the way I did my loans, I didn’t think much of it. I was just being open and honest and shared everything I did - hoping it will help somebody. Yes, on these loans I was misrepresenting things like income, cash at closing and owner-occupied issue.
But if you know anything about the state of today’s lending industry you will agree that what I did is nothing out of the ordinary.
For more information, see this News Article on Liar Loans or just watch the Liar Loan video. (Now compare to this Wall Street Journal article on the Real Mortgage Fraud).
While, I personaly have always had MORAL issues with these loans, the reality is that Liar Loans are pretty normal.
Consider this:
- Seems like, everybody is doing it - just ask your mortgage broker! (Hey, I know this follow-the-herd mentality is not a good excuse for me… but nevertheless)
- Lenders/banks allow it and turn a “blind eye” to it.
- The account executives at the banks actually tell the mortgage brokers how to “sugar coat” the application.
- Lenders make a killing on EXTRA INTEREST and fees for stated income loans - you pay to lie.
- Lenders package their loans and sell to mutual funds on wall street. The extra default rate on LIAR LOANS has been pre-calculated. The extra risk is accounted-for in most cases.
For those who are still judging me, I will just say this (and forgive me if I’m stretching it):
How many of YOU have “stolen” a music CD or software program by burning a copy of it? Did you NOT know that it’s ILLEGAL?
Look into the copyright law. As far as I know, burning a copy of a CD and giving it to a friend is AGAINST THE LAW - even if you are NOT selling it for a profit. Most people don’t realize that that.
Shall we throw half the population in jail?
Perhaps we need to address the issue of WHY this “liar loans” are so common. We need to investigate what caused such relaxed loan practices. We need to see why there is no enforcement of guidelines. Maybe, we need to change the entire industry… or maybe there is nothing wrong with it. I don’t know.
The bottom line is…
1) I didn’t go too far with my loans (As in Criminal Activity). It’s more the gray area type of stuff. True, I always felt a little uncomfortable with it. My moral compass didn’t like it, so to be on the safe side, I will probably stay away from this type of stuff in the future.
2) I am NOT a WHISTLE-BLOWER. I am NOT an expert on mortgage fraud, nor do I want to be. I have no expertise or credibility to EXPOSE anybody. I do not want to judge or blame anybody.
3) I just want to survive and HELP other over-extended borrowers! I am learning how to stop foreclosure, sell my houses quick, get out of debt, dealing with bankruptcy, etc. As I learn how to get saved and survive I want to help others do the same.
What do you think?
44 Comments
September 29th, 2006 at 2:55 pm
Okay,
You want to help people out, document what you are
going through, what’s happening, where things are.
have you gotten any nibbles or bites on the 5 houses?
What’s up with the banks?
Have you talked to the banks about the underwater
properties and seeing if you can just mail the keys in?
September 29th, 2006 at 4:34 pm
Hang in there. You are doing the right thing by coming clean and trying to help others. It won’t be easy, but at least you have the guts to stand up and say,”The Emperor isn’t wearing any clothes.” Good luck and stay positive.
September 29th, 2006 at 5:18 pm
I don’t think you’ve learned anything. You still want to come out of this essentially even, and that’s not going to happen. More likely, you’ll file BK. You claim to have a “moral issue” with liar loans… after you took at least five of them out. Yeah, right…
Now you’re trying to blend into a pack of others. Yes, put 1/2 the population in jail. Your loans got repackaged and sold to people whose retirements depend on repayment.
September 29th, 2006 at 5:45 pm
“Many people think “flippers” and “speculators” are responsible for the real estate bubble - that’s debatable.”
This is as debatable as the earth is flat or round question. Ask any reputable economist (not on the payroll of the real estate industry), and they will tell you that the irrational exuberance of spectators caused this asset bubble.
“Everybody is doing it - just ask your mortgage broker!”
No! You are wrong, I didn’t do it!
“I did NOT go too far with my loans.”
Yes, you did! That’s why you started this blog.
September 29th, 2006 at 6:04 pm
Almost everyone in Sacramento has a “stated income” loan, but you have nothing to worry about like everyone else since Sacramento real estate will soon continue to rise in value and the people that buy today will get extra good deals…
September 29th, 2006 at 6:49 pm
unfortunately, “everybody is NOT doing it” – most stretching of the truth on ‘liar loans’ are desperate home buyers just trying to put a roof over their families’ heads in an unfairly inflating market, to meet the ‘american dream’ of home ownership. in some cases, people are overreaching for luxury they can’t afford, when a juicy mcmansion is dangled in front of them by a developer.
what you’ve done is take out a whole lot of liar loans at about the same time, where credit checks would not find the other unprocessed loans, thus presenting a massive and unacceptable risk to the lending institutions involved. (there is a question over whether said instititions want to keep the game going regardless, as they have found that people in over their heads will do anything to stave off foreclosure in terms of personal sacrifice, so, one again, the banks don’t really lose if they increase their risk exposure.) i don’t shed any tears for the banks and their practices whatsoever, but they may feel aggrieved enough to come after you, and the DA may also take an interest in order to set a deterrence example for others.
on the other hand, if the housing boom collapses spectacularly in the near future, there will be so many foreclosures and exposures of risky practices going on that all parties will probably have their hands too full to bother prosecuting anybody much. and they won’t know which way to point anyhow.
however, ‘ignorance of the law’ and ‘everybody is doing it’ are not legal defences when you’ve signed a contract using false information that carries penalties.
September 29th, 2006 at 9:15 pm
You are rationalizing your decisions and trying to spin them in a positive light.
The upside is the Feds and other law enforcement simply lack the time and motivation to pursue this crime. So you will likely fall into obscurity and be lost the sand of time. That is until your lenders come looking for you. Which is a seperate concern.
You broke the law no doubt about it. And you will probably never see the inside of a prison for it, so in effect you win. But do yourself a favor and don’t pretend it was victimless or that everybody is doing it.
You are a criminal. Embrace it. Celebrate it. Conceed that you have chosen to walk on “the Dark Side.” Why play by the rules of a society that sets those same rules against you. You have gamed the system and won. Why stop now?
Start giving lectures or write a book. Not about housing, loans or mortgage fraud…nah that ship has sailed.
Sell weightloss pills, exercise machines, time shares or something more sinister. Face it pal you are born to scheme.
September 29th, 2006 at 10:20 pm
Saying that: because burning CDs is illegal it is therefore okay to make fraudulent loan applications, is sophistry at its finest. (Or worst - whichever).
One has nothing to do with the other. You may as well argue dealing crack shouldn’t be prosecuted because people break the speed limit all the time.
And I really think you need to think about the damage your type of specuvesting has done to the housing market - and the negative impact it has had on working families! You seem to think that your actions are a ‘victimless’ crime. Well they aren’t.
Every fraudulent loan you took priced honest legitimate owner occupiers out of the market for every house you bought *and* moreover, drove the price up for comparable properties in that neighborhood. What’s more, even those owner/occupiers who are still able compete against specuvesters and still afford a house are paying more than they should. Obviously this deprives them of fully enjoying the disposable income they otherwise would (and probably work very hard to earn!) never mind diverting dollars away from things like their children’s education, or the medical expenses of loved ones.
And when you default on your loans, which you will, those loans will have to be written off by someone somewhere. Consumers in the future are going to have to make up for this shortfall by paying higher interest rates, more stringent mortgage requirements etc. placing yet another burden on people who are completely innocent of any wrongdoing.
I understand that you are not the only person who acted this way (and that there are many, many, many others like you out there). But I think it would behoove you to stop for a minute and realize that your type of behavior has extracted - collectively- a huge social cost borne mostly by innocent third parties who wanted nothing more than a nice modest home in a reasonable neighborhood for their families. These people are the true victims of these ‘get rich quick’ real estate schemes. They had dreams too: dreams they might never realize because of this behavior; and through no fault of their own.
I don’t judge you. I just don’t think that you are really dealing with the wider consequences of your actions. The bottom line is that other people got hurt. You may not be able to put a face to them, but that doesn’t mean they don’t exist and aren’t actually hurt by all this greed driven real estate fraud.
September 30th, 2006 at 1:50 am
“How many of YOU have “stolen” a music CD or software program by burning a copy of it? Did you NOT know that it’s ILLEGAL?
Look into the copyright law. As far as I know, burning a copy of a CD and giving it to a friend is AGAINST THE LAW - even if you are NOT selling it for a profit. Most people don’t realize that that. ”
That argument is just laughable. The difference between what you did and the above mentioned crime is around 2.2 million USD. And hey, I remember there were some cases where Kazaa users where hit very hard with fines, to the tune of 100k, for illegally downloading and distributing music. So please get real.
September 30th, 2006 at 10:00 am
Atta Boy Casey. That will draw supporters for you. Try and point fingers at others who have done something “illegal” too. Maybe you should call out everyone who tried Marijuana or all those people who drive in the carpool lane by themselves. Or what about all those people playing home poker games. That’s right!!! Casey caught you. Shame on you All. Comparing the act of burning an illegally copied CD versus lying on loan docs to be 2.2 Million in Debt. That is the best analogy I have heard yet. Wow!!! That is right on the money. I’m surprised that Skilling and Lay didn’t use that defense during the whole Enron Debacle. The judge would have thrown out the case instantly. Maybe you should have gone into Law instead of Real Estate…Call yourself Casey Cochran. And use this as your closing line on all your closing arguments. “If you ever downloaded music that wasn’t legit, Then you must let this go and you must acquit.” How can anyone not follow that logic. OJ got nothing on you buddy.
September 30th, 2006 at 10:53 am
your CD analogy…are you serious? that’s the best rationalization you can come up with? wow, kinda sad. here is one main difference…if i make a copy of a cd or get one from a friend…the difference is i would have never purchased the cd anyway, and further, it will collect dust in my closet for years to come. the other replies state the obvious. so yea, if you had NOT purchased those 5 homes or what not, someone else would have; whether they use liar loans too, as you suggest every house purchased in the boom has, that is utterly false.
i guess your reasoning is typical for your age..but everyone else did it. i ask you to open your eyes outside of your zip code..i mean really if everyone else did it, should everyone else also have a website devoted to it? let me know those other sites from all those folks. nope, you are the only one (so far).
i live in a very bubblicious area as well, northern VA, i dont know of any coworkers who bought in the past 4 years using a liar loan. nope they just bought tiny 1 br condos with astonomical condo fees, while claiming 10 dependencies or so, and using arm’s accounting for their ‘given’ COL raise each january, and thinking they will sell within 2 yrs. so yes these folks are screwed but they didnt break the law.
September 30th, 2006 at 11:06 am
Ok, the burning copies of CD’s thing might be really stretching it… but hopefully you get my point:
What i did with my “liar loans” is not ENRON material… It’s more common then most people realize (unless you’re a RE professional then you see it all the time).
Am I trying to make an EXCUSE? NO.
I just don’t want to dwell on the loans too much and focus on 1) getting out of my mess, 2) paying off my debt, and 3) hopefully helping other over-extended borrowers through my experience.
September 30th, 2006 at 11:22 am
I agree with AngryintheBronx that the social costs of your adventure are high. The thing is, I don’t really expect 24 year-olds to make too many complex social cost analyses when making big decisions in life. The decisions themselves are complicated enough. I think that, now, you are quick becoming one of those rare 24 year-olds who does make those calculations and that you’ll now make more forthright decisions based upon those calculations. If there’s something positive to be extracted from this, that will be a part of it.
In any event, I continue to applaud your new-found honesty and I firmly believe that it will help to atone for the mistakes you’ve made and their extraordinary costs both to you and to the average Joe trying to buy a home right now. Hang in there kid and make something good come from this wider unfolding debacle.
September 30th, 2006 at 11:27 am
“I think people were negative because:” –> you thought you’d become rich. LOL. What you think doesn’t represent reality. You established that your thinking process have issues. World has laws, values (note this one), and rules *regardless* of your thinking.
“Some people DO NOT realize that these loans are pretty typical in the industry.” –> created by criminals to be used by idiots and speculators.
“People are bitter about sky-rocketing housing prices and need to blame somebody!” –> Isn’t it patronizing…. lol I am a business owner and have an office in the house as well. I rent and will be for a long time if not forever even if prices fall below nominal. It is muuuuuch cheaper with the tax reduction for the home office. Regardless of my situation, it doesn’t change the fact that you are a criminal. Your assumptions are made based on your projection. People thinking doesn’t match yours because thankfully, there are still people with values there. Even if indeed I would be bitter about the housing situation it wouldn’t change the fact that you are a criminal.
Somebody was correct that you showed no remorse. People who are supportive are either have the same mentality as yours, or are just naive or being stupid. Or maybe they don’t realize that it is because people like you the economy will be hit hard. What this country needs is another great depression so people learn the value of the hard work and the $$$ and assets. But hey, the economy crash is around the corner.
Oh, everybody copies the CDs? “Everybody doing it?” no, no, no. I am not everybody. People whom I call my friends are not like that. They are no scams. I get to learn about “everybody” from blogs like this. Everybody…. Are you saying this is a country of crooks in other words?
And how come you didn’t even find a job? Yeh, but I guess after this story you will have even a problem with employment, won’t you? I don’t see any reputable software company hiring you. YOu can practice “what would you like with your fries?” for now. But you have plenty of time in jail.
I suggest you hire a shrink. You can’t even accept people leave their honest opinion on you in response to your “honesty”.
September 30th, 2006 at 12:10 pm
Some people seem to think I should shut-up and lay low and avoid being investigated or whatever.
You know, if the legal process finds me guilty of something and the punishment is fair then I must pay it… right?
Would you tell a “criminal” to run and hide from the law?
But am I a “criminal” in the first place?
September 30th, 2006 at 12:16 pm
“I_was_there_man” - You’re right. I need to stop worrying about these “liar loans” too much and move on to try to get myself out of this mess. That’s what this post is all about - Just surviving and helpin’ (other distressed sellers).
September 30th, 2006 at 12:23 pm
Seems to me your lender should recoup their losses or most of it on the houses you’ve fixed if they go to foreclosure and the market has not depreciated so terrible that it wiped out the increased value because of the upgrades.
After you have done the analysis of your situation; is it possible for you to be bailed out say by another investor and the propeties still make a profit. Seems you have a cashflow issue which doesn’t necessarily means that your deals are bad. It just mean they are bad for you the way you and most people are looking at it.
Consider looking at letting the property go for 0 next to nothing gain. You will have all the numbers and you explain to whover the buyer that you are not going not making any money.
Market to investors, realtors anybody at this point. Put together a presentation booklet or something stating that you have to sell because of cashflow problems, put the value of the property, the repairs you’ve done and cost, how much it cost you to get in the properties and selling it for.
September 30th, 2006 at 12:44 pm
I_was_there_man - good tips. Thank you. I am actually already doing a lot of that.
If you look at my property pages you will see the amount owed, my monthly payments, how much behind, etc.
On most of them I’m asking people to just take them off my hands for the amount owed. I don’t want any profit. Some of them are upside down so will need to do a short sale with the bank (if the bank approves it).
I have been marketing to all the investors I know, realtors, actually EVERYBODY I know. I sent a blast email to my entire database several times with link to this site.
I’m also doing some craigslist ads (need to renew them) and other places. I’m gonna try some more stuff soon and report on this site how it works.
There are only 2 properties where I am still holding out for some profit. Which is not really profit because when you add up my expenses, i would STILL be loosing money. But still, there IS a little bit of equity and I am just asking for a little bit of cash to live on for the next couple of months.
September 30th, 2006 at 1:14 pm
Casey thinks people were negative because:
1. Many (not all) people reading “Bubble Blogs” are negative to begin with.
Not true. The bubble bloggers are far more educated and worldly. Many were extremely bullish for many years. Some made small fortunes. Being negative about the real estate market now is not a bias but a recognition of the current conditions.
2. Me calling the loan “liar loan” made it seem REALLY bad.
Understand it isn’t “the loan,” THEY are MULTIPLE loans. They include multiple simultaneous applications. They are really bad.
3. Some people DO NOT realize that these loans are pretty typical in the industry.
Look up typical.
4. It is controversial to be this honest about my situation.
No, the controversy was raging for years. You merely attracted attention.
5. Many people think “flippers” and “speculators” are responsible for the real estate bubble - that’s debatable.
Indeed. No doubt they are but a part of the bubble. When you are being robbed by people with baseball bats and hockey sticks it doesn’t matter to the victims which is your favorite sport. Ask yourself how many flips would have occured without lending fraud. In your case 6 of the 8.
6. Many think I am a bad person for investing because I am just greedy and want quick riches.
No, not at all. Perhaps the worst of your critics on this aspect consider you foolish and unreasonable. THere’s nothing wrong with investing. There’s even nothing wrong with investing in real estate. There’s even nothing wrong with agressively investing in real estate. That said, you lost. Your investments made on margin are underwater and there is a margin call. All you need do is make good on your investments.
7. People are bitter about sky-rocketing housing prices and need to blame somebody!.
Again, some of your critics have done quite well on the recent trends. Others will do quite well on current trends. A very few will do both.
You need to understand a few things. When you overpayed (in retrospect) for some of your holdings you raised many peoples’ property taxes. For all of them you artifically raised the percieved demand and caused unsustainable development pressures. You outbid people who would have actively contributed to the community, another unsustainable result. Your loans competed within a pool of available money. Your loans had two effects there. First, they outbid because of their high fees meaning that all fees trend up. Second, insurance and margins rise.
In short a lot of bad things happened to a lot of people you never met and they aren’t blaming “somebody” they are blaming those responsible.
September 30th, 2006 at 2:58 pm
You’re very good at rationalizing your life choices, that’s for sure.
Nobody wants to look in the mirror and admit to themselves that they’re not a good person. Rationalizing, blaming others, and trying to make others look as bad as you are much easier on the self-image.
I’m still waiting to see you proudly announcing your next business venture “I Beat The Hoursing Downturn, You Can Too!”. What will it be - weekend seminars at a 2-star airport hotel, a downloadable e-book, one-on-one tutoring, or all of the above?
September 30th, 2006 at 4:27 pm
An Open Letter to Casey Serin and Others Like Him
Dear Casey and Other Overextended Homeowners,
I’ve been thinking about your situation since you posted it on your blog a few weeks ago. Having been in a bad financial mess myself and being currently employed in the mortgage industry, I thought I might be able to offer some good advice regarding your predicament.
For people who are unfamiliar with your story Casey, let me recap briefly. 24-year-old Casey quit his job to become a real estate investor earlier this year. He bought eight homes in 4 states some new, some needing repair. He sold two of them, but then ran into trouble…the bank stopped loaning him money. You see, he structured each purchase to include cash back at closing. Casey used this cash to repair properties and pay his mortgages totaling $2.2 million. He also ran up $140k in credit card bills traveling and making home improvements. Now he is unable to make his payments and is falling into foreclosure.
Casey, you’ve said you don’t want to declare bankruptcy. Based on your age, education and ability to get a good job, bankruptcy is your best option. I’m not an attorney, so please consult one if you’re looking at filing. If you’re adamant about not filing, I completely understand. So let’s take a look at some steps to try and get you out of this mess.
1. Get a job. You need income to get out of this mess. In one post you made, you said you had an offer. Take it! Take two if you need to. One difference this housing cycle has compared to other down cycles is unemployment is at historic lows. Take advantage of that and secure some income.
2. Move into one of the homes. I don’t know whether I read it on your blog, or another one that you aren’t even living in any of the houses. Move into one. It will buy you more time from the bank because they have difficulty evicting. If you end up taking out bankruptcy, you may be able to save at least your primary residence. Pick the one you think will appreciate most or has the lowest monthly payment.
3. Talk to your lenders, not the mortgage broker, and see if they will structure forbearance for you. This will wipe out your past due amounts and bring you current. You may not stay current, but it will remove some stress for a little while. The bank doesn’t want to foreclose on you. They are in the business of lending money, not selling repossessed houses. They do the first job very well and the second job very poorly and they know it. They will work with you. Once you’ve secured a job and obtained a forbearance, make the payments on the house you live in. You’ve just saved one house from foreclosure. This can now be your base of operations and in the future, the collateral to continue your real estate investing.
4. Rent out your remaining homes. The market is soft right now for sales, but the best it’s been for a while for rentals. For now, it doesn’t matter if your rents don’t cover your mortgage. You’ll be getting deposits up front and with your forbearances in place you won’t be behind except for the shortage, if there is one. Think of it this way - is it worse to lose $300 per month or $1500? Hopefully your job will cover the shortage. If not, get a 2nd job. Here’s a thought on increasing your rental income. Instead of renting out the house to a family for the going rental rate, rent out each room to individuals. You’ll make more money renting by room, plus you hedge vacancies because it’s less likely all three or four roommates will vacate at the same time. I suggest short leases for your room rentals - 6 months to a year. People in that situation are likely thinking short term anyway and it will give you the ability to try and sell the home without a bunch of long term leases attached.
5. Sell the homes. Using creative financing will give you the ability to make the property appeal to more buyers and also push back potential foreclosures. Ideally, you want to sell these homes straight up, but unless you price them aggressively you probably won’t have much luck. Selling using a lease option is probably your best bet. Wraparound contracts force you to seller finance your profits, probably something you’d rather not do. Plus, if the lender finds out, they can enforce the due on sale clause and you’ll really be in a tight spot. Focus on renting out these units first, then try selling. Market to your renters for lease options or other financing as some may have the means to buy and may not want to move.
6. Don’t put in any more money for repairs or fix up. Conserve all cash to make mortgage payments and advertising for rentals.
7. You need to be very careful with that Dallas property because it is financed with hard money and you have a 1-year balloon. Unlike institutional lenders, hard money lenders do want to take your home. That’s how they make money and they are very good at it. I doubt they will grant a forbearance, so you need to get those payments caught up - unless you don’t think you can sell it by next June for a profit. A lease option or wraparound won’t work in this case because it’s a one-year note. The advantage you have is it has your lowest payment. If you don’t think you can sell it by June, don’t put one single cent into it. Negotiate a deed in lieu of foreclosure. Basically, you’re giving the house to the lender in exchange for them not foreclosing on you. It will look bad on your credit, but not as bad as a foreclosure or bankruptcy. The money you save on this mortgage can then be put into saving the other properties.
8. If none of these steps works for you, I’m sorry if that’s the way it turns out, you’ll need to consider some other options. At that point, bankruptcy will only stall the foreclosure process. The least painful way out would be the deed in lieu option. Send in your house keys, sign the paperwork, but still try and keep your primary residence.
9. Full foreclosure. Each state has different rules regarding the foreclosure process. It can take anywhere from 90 days to six months before they start the foreclosure process, known as the notice of default. Then the process can take up to a year and a half to the point of a sheriff’s sale. Even after that point, it’s still possible to buy back your primary residence. During this time period a whole new group of “real estate investors” will surface. Once you’ve received the notice of default, you’ll start getting letters from people offering to save you from foreclosure. Some will be complete scam artists, trying to operate an equity stripping routine that will leave you devastated. Others will offer refinances with payments that are impossible to make. In the end, they’ll wind up with the home instead of your primary lender. Still others will perform lease back deals that take advantage of the lender, transfer ownership of the home to them and leave you as a renter. In your situation Casey, you’ll want to steer clear of all of these people.
I hope it doesn’t get this bad for you Casey. The naysayers think housing values are going to tank and revert to 1997 prices. History has shown that this just won’t happen. I think the current softening market is temporary. If you can ride it out, it will get better. I hope you are able to employ my strategy with success, or at least soften the impending blow of foreclosure.
I wish you and everybody else in your situation luck. I also hope you learn from your mistakes and your next venture is much more successful.
Regards,
Nigel Swaby
www.slcrealestate.blogspot.com
September 30th, 2006 at 4:46 pm
Nigel - That’s some very good advise. Thank you for that. I am going to think about some of those points.
Moving into the homes right now is not an option - the two in sacramento needs fix-up and they are not move-in ready.
And I AM looking for a job (I have a job offer right now I am considering). The problem is that any job I get right now will not allow me to float the negative on so many mortgages and credit lines.
My 140K worth of credit lines are $3700/mo minimum payments. So bankruptcy may be the way to go.
I just wish I can repay my lenders. But maybe I’m just being foolish and should take the “easy way out” that the law provides via Bankruptcy.
September 30th, 2006 at 4:56 pm
Casey,
I don’t think you realize exactly how bad of a position you’re in. Move into a house! Unless its been condemned, move in.
I once lived in a house for a winter without a heater. You don’t have a full grip on reality. The only reason you shouldn’t move in is if it doesn’t have a roof. Move in, fix it as you can. You’ll be able to save it that way.
Nigel
September 30th, 2006 at 4:59 pm
Only focus on your mortgages. Once you have a positive cash flow, then focus on your credit cards. That is unsecured debt and they won’t be able to do much to you. You may even want to call your credit card lenders and see if they’ll work with you in some way for a few months. If they won’t, don’t pay them. That will buy you a long time.
Focus on the mortgages.
Nigel
September 30th, 2006 at 5:23 pm
Privet Kasey!
Umni Malchik - Your photo reminds me of joke.
Two guys at resort in hawaii talk to each other and ask how each come to be there.
The first guy says my house catch fire, the insurance money come through and we take vacation while house is fixed.
The second guy says what a coincidence my house get flooded, the insurance money come through and we take vacation while house is fixed.
The first guy says that is a coincidence and say just how do you start a flood?
Is this what your picture means - you having a fire sale?
Iditya na hooey!
September 30th, 2006 at 5:52 pm
What investment strategy were you using?
How were you educated in RE investing?
How about showing us the Excel spreadsheets you put together to see if any of these were deals?
September 30th, 2006 at 7:28 pm
I am a big fan of Ben Jones blog but agree with you that there is a lot of negativity on it at times, which makes it hard to take it seriously some days. That said, except for a few pompous bloggers who have no life and live to see their name in print, it is the best blog out there for info on the real estate market (kudos to Ben
!
Now to you Casey - I am rooting for you! You are well spoken and it seems to me that you walk away and leave a mess, but you are trying to do right. I applaud you for that. You seem to be very intelligent (even if you did get way over your head) and well spoken. I am glad your site came back up and pray God leads and guides you to help others who are in the same mess.
On a side note, I left Sacramento 14 mths ago for Idaho, but I used to work near Pride Industries on Foothills Blvd in Roseville and also bought from them. I don’t know if you used to work at this location, but there were a lot of good people there.
Best wishes to you Casey! be honerable and do not expect a lot of positives comments and you won’t be disappoited ;-0
September 30th, 2006 at 8:03 pm
nigel said:
i would beg to differ. at least in socal the bust of the early 80’s and the one in the early 90’s both ended w/ prices back even w/ or below the long term price/income ratios, the former mostly through rapid inflation, and the second more through real price drops. if the same thing happens this time we’ll see most areas come down 40-50% no problem, barring huge increases in inflation.
September 30th, 2006 at 9:01 pm
Casey,
Quite spinning your case. You’re actually losing my sympathy with every new post. You’re sounding whinier all the time and you appear to only hear what you want to hear.
You’re also providing zero new detail about how you’re liquidating your assets or where you intend to go from here. So far, all I hear are a lot of self-serving justificatins about why your action wasn’t so bad (and you haven’t bothered to respond when people point out why they disagree with your assessment). If you want this to be informational, provide more information!
BTW - there’s no easy way out via bankruptcy for you. You committed fraud on those loans - those loans will not be dischargeable in BK. Even if your lender forgives all your loans, you’re still on the hook from the IRS - that’s also not dischargeable in BK and will be up to 50% of your loan forgiveness.
And then there’s the problem of BK + openly admitting fraud on your record. Any employer who Googles you will have tons of reasons not to hire you. Contrary to what many people here say, you will not get a fresh start. You will have your (low) paycheck docked for many years, you will not ascend to any job with responsibility, your marriage will likely to break up soon and you’re unlikely to buy another house for a very long time.
And this is the best scenario. This is if the banks let you loose and the prosecutors don’t bother to make you another notch on their belt.
September 30th, 2006 at 9:23 pm
Repeat after me “I am a liar, a cheat, a thieif, a crook, and a con artist” Sorry, no absolution until you stand up like a man and look at your own character defects. Creating this blog could probably add “ego” as another.
I wish you no ill will, and hope your nighmare comes to an end soon, but you are a disgusting human being looking for sympathy…. now that you got caught.
September 30th, 2006 at 9:31 pm
equating ripping off a record company that has been fleecing its customers for years by “stealing” a few tracks, to committing fraud to acquire millions of dollars worth of loans, is just totally ridiculous.
for instance, look at the intention of the “crime”. why did i steal those tracks? to enjoy some music without paying for it. i might be trying to save a couple bucks, and i might also be trying to avoid handing money to a corporate industry i despise. why did you commit fraud? to try to strike it rich “investing”.
September 30th, 2006 at 10:22 pm
Face it Casey, your investment strategy failed; you entered the RE market way too late in its expansion and as a result, you got burned; it’s that simple.
You’re also about to fail in this new endeavour, saving the Sheeple, for the same reason. You are too late. As another blogger put it, “You can’t unring a bell.” As a result, like you, they too will be financially ruined. Yes, it’s harsh but it’s the truth.
Bloggers like myself don’t hate you; we don’t know you; you are, however, a subject of our discussion like so many other unsuspecting home buyers, speculators, and flippers.
Collectively we’ve been writing about the housing mania and its affect on perception and behavior. Your behavior demonstrates mania detachment, your expectations at this junture in the RE expansion were detached from reality and reason and it motivated you to take extraordinary risks in hope of extraordinary returns. You and your readers know the rest.
More importantly, however, we’ve been writing about a broad array of other subjects including the impact of Mortgage Backed Securities on the lending industry, the recent changes in bankruptcy law, the problem with uncontrolled credit expansions, the over supply of homes concurrent with falling demand and its impact on future home price appreciation. The list goes on and on…
As you can see, we are an intellectually diverse group from all walks of life; I hope you and your readers take the time to fully research and appreciate what we do. In addition and more importantly, take the time to understand what is really happening in the macro-environment. Good luck Casey and good luck to your readers.
mrktMaven daily blogger at http://thehousingbubbleblog.com
October 1st, 2006 at 1:44 am
you were greedy. 7 years ago it was the internet bubble. now it’s real estate. there is no easy escape. you’re going to be working for a living. welcome to the insanity.
October 1st, 2006 at 2:12 am
Good comments guys. Thank you for both the criticism and the support.
I am not hating on the Bubble Blogs by the way. I have gotten lot’s of constructive feedback from those guys. And new ways of looking at things, like the economy as a whole!
I DO need to stop spinning my case any more than I already have. People are getting tired of it.
I am NOT looking for sympathy. I am also NOT making excuses.
I just need to get myself out of my situation and hopefully help others do the same.
October 2nd, 2006 at 10:10 pm
Mauibear,
No-one expects 24 year olds to do that type of social analysis. That’s why this stuff was already illegal, so people didn’t have to figure it out. They should know not to do it when they sign under the bit that says: ” I, _________, the undersigned do hearby affirm or swear that the foregoing is ” blah, blah, blah…..
I just didn’t want to people to lose sight of the fact that there is a very tangible social cost in all this outside of casey’s plight. Though I suspect I’ve already reached the far shores of reason in many cases by trying to point it out.
October 5th, 2006 at 5:51 pm
1) Write about my experience facing foreclosure and how I am dealing with it and… 2) Help Over-Extended Borrowers - tips on how to stop foreclosure, save the home or sell it fast, decide when […] Continue Reading September 29th, 2006
October 6th, 2006 at 8:36 pm
First I though I will be some kind of “whistle blower” - exposing the industry, bad real estate gurus, etc. I then realized how stupid that was - I have no expertise or credibility to expose anything. I am guilty myself. Second, I tried blaming the banks. They made these loans so easy to get, so it’s their fault. WRONG! Easy or not, a lie is a lie! I am guilty and should not try to weasel out of it. That was WRONG and STUPID. I want to apologize to all my friends, associates and readers of this
October 19th, 2006 at 9:42 am
Wow, I’ve seen some stretching and spinning to justify horrible mistakes before; but this really takes the cake.
I don’t see nobility behind this blog; I see a non-sublte cry for help and a hope that someone will see this and bail you out. That might explain why you’ve been broadcasting your issues on the media and NPR.
Luckily there are people who are too good in this world; and someone will probably invest and assist you; but frankly, you don’t deserve it. It’s a crime what you’ve gotten away with and continue to get away with. I still can’t get over your arrogance–it’s almost unreal.
November 12th, 2006 at 1:46 pm
Amazing Casey!
Your arguments of if everyone else is doing it, it’s ok for me to do it too.
OH MY GOODNESS!
Let me tell you something you freaking moron (sorry but you pull out the worst in people). In my work place, there are LOTS of back stabbers. People who will do anything to get ahead even if they have to step all over you.
Even my freaking brother in law stabbed me in the back in order to get ahead in the work place. This is the same brother in law I helped over and over and provided shelter when he had none.
I have NOT justified F***ING others because they did that to me. I keep my morals and I try to get ahead just like others, but not at their expense you freaking moron.
Now I know why so many here get upset.
November 25th, 2006 at 4:06 pm
You say:
Many people think “flippers” and “speculators” are responsible for the real estate bubble - that’s debatable.
>It is not debatable. That is a fact. It’s called “over-inflating the value”. Let’s not mistake this for the rehabber that buys low and adds reasonable value and sells at a reasonble price and profits in a reasonably nice neighborhood and everyone wins.
Flipping is generally buying a stinking junker and reselling as is, with no repairs done to it, to another specualtor, who in turn sells it for another inflated value to another specualtor and on and on…soon you have a junker worth nothing, with no repairs done to it to justify the added value, but you owe big. Then the values of the surrounding houses are artificially raised since your home will be used as a comp on recently “sold homes”.
Get the picture?
Now everything is out of control and none of the houses have a realistic value. Property taxes rise with each inflated sale. The saga continues to spiral out of control until a housing bust occurs in order to adjust prices to where they were before all this game started.
Banks loan to make money. They hope you default so they can get your equity. If it is upside down, They’ll have made a nice amount of $ with the high interest and recoup the remainder of the loss with the sale. This is one sceanario.
The other is you leave the community high and dry with junkers littering the landscape that no one wants and the banks can’t sell.
You have to buy houses everyone wants and can afford.
Not buy junkers no one wants to buy or rent.
You should have gotten advice from real investors before you began blindly purchasing.
The Guru’s don’t buy Real Estate. They are investors BUT NOT Real Estate investors.
They hold educatonal Real Estate trainings called seminars.
They urge you to attend so you can “network” with others.
Except the “others” there do not know much either.
So you get bad advice.
I Iiterate, Guru’s don’t purchase properties, they hold educational seminars taught by a trainee teacher, and they use the profits from the Real Estate Seminars to purchase STOCKS & BONDS. They make millions on one seminar.
And their methods of operation that they teach are usually illegal enough for most people to not want to disprove the validity of what they are saying. Looks like you have been the only naiive person to actually goes out and disprove the guru’s.
Speaking of truth>real Real Estate investors buy one property at a time and they make sure they have a plan for the property. They do not go buying up anything, just to buy.
They do not buy 8 properties at once and the few that do, buy with cash and a plan. The plan is to immediately resell them to people like you who have no idea what they are doing. You were hungry, so you found a hungry Loan Officer to submit your crappy deals.
Let’s face it, you bought so you could milk the over-inflated equity for as often as you could get away with. That is bad economics and not investing.
November 26th, 2006 at 1:29 pm
PEOPLE ARE IN TROUBLE I HAVE SEEN SO MANY FORECLOSURES THIS YEAR IT MAKES ME SICK TO SEE A FAMILY PUT OUT OF THEIR HOME. I’M A PERSONAL FINANCIAL ANALYST I HELP FAMILIES BEFORE THEY GET IN THAT SITUATION, I SHOW THEM HOW TO SAVE MONEY YRS & INTEREST ON THEIR HOME AND PUT A PLAN TOGETHER TO GET THEM OUT OF DEBT QUICKER AND SAVE MONEY AT THE SAME TIME. IF YOU KNOW OF SOMEONE IN THE NYC AREA OR HUDSON VALLEY AREA I DON’T CHARGE TO SIT WITH THEM TO SEE IF I CAN HELP THEM. DENISE 845-***-****