Take Active Control and Put It All Back On Track - Holiday Edition

The beginning of this blog said "WELCOME ONE WELCOME ALL". I wrote:

This site is the populist fight back by ordinary people and small businesses against all kinds of scams, programs, giveaways, and bailouts that use your money and assets.

Well, this holiday season helped me realize why a blog like this is important. The holidays are usually a time for collective activity with family, friends, or even time by yourself. It's also a time of giving to those who you care about and to those who need help. It's a time for reflection on your position in life. For myself, I am thankful that there is support from my wife, family, friends, clients and readers of my words. It is the support that is most important. We all need it.

Yet, I am in deep reflection right now. Through a series of self-made choices, I find myself in a very difficult position. A position that requires accepting full responsibility for my actions. I am constantly asking “How must one accept responsibility for one’s actions?” Perhaps I could lower my head, beat myself up, be angry and full of regret. Rack my mind with "Why? Why? Why did I do what I did” and “How could I have let this happen”. Living in fear of the future. The feeling of being chained to the problem with no escape. This weird feeling of dread because I want to bury my head in the sand. Well, to tell you the truth, I TRIED IT and WENT THROUGH IT. I played into self-pity, disappointment and loathing. I became irritable and angry. LET ME TELL YOU FIRST HAND…IT DOESN'T WORK. It left me breathless and weak. I WAS FROZEN AS TIME WENT BY.

What I did find that worked was… TAKING ACTIVE CONTROL AND PUTTING IT ALL BACK ON TRACK. I committed to real action to make things better. It required a deep breath, a confident posture, and the knowledge that it can and will get better because I wanted it to. I did my LIFE MATH and found that the good was greater than the not-so-good. It required daily prayer, meditation, strong words from wise people, and the belief that I can get up from any fall. It also demanded complete honesty about my mistakes to those who love and depend on me and to myself. It required a discipline and commitment to the right action. The right action that would improve my position.

It demanded a show of strength so grand, that even I could not believe it at first. I am a believer now.

There are some many people I have counseled and talked to who are taking their personal financial problems painfully. For many, it becomes an internalized personal failure. It has left some desperate and depressed. It has left all stressed. It has created this air of defeat…this idea of…”How Could I Have Let This Happen To Me”. It has frozen so many in time.

You are not the first or the last person to have financial problems. Especially now. I have worked with doctors, lawyers, policeman, business owners, teachers, accountants, financial advisors, retirees, the unemployed, real estate professionals, mortgage brokers, and other workers and professionals. I have counseled family, friends, and even acquaintances at events. I have worked with all types of people representing various races, ethnicities, and spiritualities. all spanning the socio-economic spectrum.

What I am trying to say is “You are not alone. We are all in this together. There is way forward.”

Everything you find on this blog and other blogs referenced here, are intended to keep you moving the right way on your financial path with confidence and the knowing that you can TAKE ACTIVE CONTROL and PUT IT ALL BACK ON TRACK. You are in control of your life.

I thank you for reading this holiday post and thank you for being an outlet for some of my feelings. The New Year is upon us. I am confident it will be good for you too.

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Strategic Defaults : It's Time You Learn More!!!

I've been working with people regarding strategic default for years. Even though it seems to apply to real estate loans, it actually applies to any loan. Let me state my position right now: I believe that Strategic Defaults are an effective means of cash and wealth preservation. Of course before a decision can be made the benefits and risks must be made. It is our experience that after careful consideration of each persons' unique circumstances the rewards can outweigh the risks.

In any event I have decided to provide a link to the BEST strategic default articles all over the web. These articles best highlight the growing phenomenon, the reward and the risk. You will learn the different perspectives and recognize that Strategic Default is here to stay.

For the next twelve months, I will provide up to date, relevant information about Strategic Defaults. If you want to learn more about it then this is the place to come. Also make sure you bookmark this link, there will be fresh updates:


An Honest Look At Homeowners Who Decide Not To Pay (Even Though They Have The Money) & The Real Risks. While looking at the real life decisions to Strategically Default, this article reminds those who decide to do it that there are risks. The biggest risk being that a lender can still sue for any deficiency if the property does not satisfy the entire debt. In fact, the same lender will probably sell the right to the deficiency to a third party. Read More from The Wall Street Journal: Debtor's Dilemma: Pay the Mortgage or Walk Away: In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments

Morgan Stanleys Intentionally Defaults On A $6.5 billion Dollar Loan Obligation. When explaining the reason for a Strategic Default on 17 million square feet of office buildings acquired for $6.5 billion in 2007, a spokeswoman said “This isn’t a default or foreclosure situation...We are going to give them the properties to get out of the loan obligation.” Read More from Bloomberg: Morgan Stanley to Give Up 5 San Francisco Towers Bought at Peak

NYC Attorney Consults with Clients Who Intentionally Stop Paying Their Mortgage To Protect Their Savings Or To Make Money. NYC Attorney Augustine Diji advises his clients on how to property consider a strategic default. In some instances, his clients strategically default in order to make money. Read More from the Real Deal: Investors defaulting to make money, Some NY investors go into foreclosure on purpose

USA Today Reports on the Growing Trend of Strategic Default. This report begins with a recently laid off homeowner who decided NOT to use all of her savings to pay her mortgage. Instead she decided to stop because it did not make sense since her house was worth less than the mortgage. This continues to confirm that Strategic Default is a growing trend. Media, banks, and government officials are beginning to take notice. Read More from USA Today: More walk away from homes, mortgages

A Law Professor Effectively Argues Why It's in the Best Interest of A Homeowner To Strategically Default When Necessary and Not Feel Guilt or Shame. Brent White, an associate law professor at the University of Arizona has written the best and most comprehensive argument regarding Strategic Defaults. He strongly argues that property owners should make the decision on whether to continue mortgage payments based on their own interests that are “unclouded by unnecessary guilt or shame.” He says "strategic default might not only be a viable option, but also the wisest financial decision". He correctly points out that lenders do the same thing, when they “ruthlessly seek to maximize profits or minimize losses irrespective of concerns of morality or social responsibility.” So it's TIME FOR TO BE RUTHLESS ABOUT YOUR FINANCIAL CONCERNS. Read Brent Whites Paper: Underwater and Not Walking Away.

The Moral and Social Issues of Deciding NOT To Pay A Mortgage (Even If The Property Owner Can Afford Payments) Can Keep A Property Owner From Using A Strategic Default. This research paper explores the moral and society norms factor heavily when deciding to strategically default. Essentially, the researchers found there is a correlation between people who believe it is immoral to strategically default and amount of negative equity in their property. The greater the value of their property is below the mortgage balance, the more likelihood the property owner will use a strategic default. Read More from Luigi Guiso, Paola Spaienza, & Luigi Zingales, Moral and Social Constraints to Strategic Defaults on Mortgages

Please bookmark this page. This will be updated constantly.

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A Brief Intro about Strategic Default

At this point of time, there is a financial crisis facing millions of people and businesses in the United States. The crisis is not limited to a specific socioeconomic group of people. Across the income spectrum, the primary financial problem is debt. What is unique about this current economic crisis is that the debt contagion has also infected financial institutions and has affected local, state, and federal government.

Many people are heavily indebted and are seeking a way out. Financial institutions are not extending credit unless the borrower meets a strict set of criteria. In order to obtain a loan, one must have excellent credit, verifiable income, and substantial cash reserves. This is a tall order for many people and business alike.

One of the greatest forms of wealth comes from real estate ownership. It is now estimated that trillion dollars of real estate wealth has been lost. Furthermore, individuals and investors own properties with unaffordable mortgages payments that have principle balances greater than the value of the property.

There are many people who have decided to “intentionally” stop making mortgage loan payments, even if they can afford to do so. They have decided to make a so called “strategic default”. Generally, the primary rational for a strategic default is economic. Currently, strategic default is associated with home mortgage loans. However, strategic defaults is a tool used for credit card debt, business loans, home equity lines of credit, and personal loans.

There are moral and social issues that arise when making a decision to stop making loan payments even if the money is available. These moral and social issues intersect with an individual’s “rational” decision to stop losing money. Our society general places a strong taboo against breaking an agreement. Furthermore, there are social costs to consider when an individual decides to abandon a property and stop making mortgage payments.

What is a Stategic Default?

Generally, it is considered, a property owner’s decision to stop making mortgage loan payments even if the property owner can afford to make the payments. A property owner normally considers a strategic default when the value of the property is below the mortgage balance due a lender. Furthermore, there is a concern that monthly mortgage loan payments will become a permanent drain of available cash savings with little chance of recovering the loss. The rationale is that it does not make economic sense to make mortgage loan payments on a property that has no equity or any hope of gaining equity.

Strategic defaults are generally associated with individuals who stop making mortgage loan payments. However, we are finding that strategic defaults are being used for credit card payments, business loans, and various personal loans.

I will be discussing strategic defaults in depth in later entries. I am an advocate of stategic defaults when properly considered and effectively implemented.

For now think about it. You may decide to use it yourself.

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Debtor's Revolt...We Love It

So it started with a woman posting a You Tube video. She was angry at Bank of America for continuing to victimize her. The bank raised her credit card interest from 17% to 30%. Like most people who don't understand that BANKS ARE DESPERATE & WILL DO ANYTHING TO GET MONEY, she believed she could speak to the bank and ask them to reduce her interest rate. By the way, did I mention she never missed a payment. She also had a checking and savings account with Bank of America. In her you tube video post she said she will not make a single payment until Bank of America agreed to lower her interest rate. She also said she is closing her checking and savings account immediately (Thereby following our rule: Never Keep All of Your Money In the Same Bank). It's these following words from her video that should have us all crying for joy...

"There comes a time when a person must be willing to sacrifice in order to take a stand for what's right...Now, this is one of those times, and if I'm successful this will be the proverbial first shot fired in an American debtors' revolution against the usury and plunder perpetrated by the banking elite, the Federal Reserve and the federal government...You are evil, thieving bastards...Stick that in your bailout pipe and smoke it."

Ann Minch of Red Bluff, Calif

Read more at: http://www.huffingtonpost.com/2009/09/14/debtors-revolt-woman-refu_n_285394.html

And so it begins. The idea of a video Debtor's Revolt is catching wildfire. And by golly, it sure worked. Not long after Bank of America contacted our heroine and offered her a deal. That's good, however it's to late. The cat is out of the bag. Why...

Because the front line (customer reps) of banks have to deal with faceless customers demanding a reasonable settlement to their debt issues. The managers, officers, and executives could sip their lattés without having to speak to, hear from, or face unhappy customers who were ignored and disrespected. Customer complaints can be posted on You Tube for the world to see. No more will full ignorance by the top brass at banking institutions. No blind eye.

Let's face it, the Debtor's Revolt theme is slowly becoming the rage because 1.) It can work because a bank is not looking for negative publicity, especially thru viral videos 2.) It's a great way to vent, to be seen. To be heard. 3.) IT CAN WORK...

It is an excellent technique for those of you who do not mind putting your business out there. And may I say again...It Can Work. Trust me. I will be sure to tell clients about this method, so they can get a deal if a bank is unwilling to be reasonable.

There is nothing wrong with Public Shame. I believe that it's been a method used by every society on this planet to get a "just" result. Of course, justice is in the eye of the beholder.

So let's thank Ann Minch of Red Bluff, California for taking a stand. We love it. So let's introduce her video for all to view - DEBTOR'S REVOLT

ead more at: http://www.huffingtonpost.com/2009/09/14/debtors-revolt-woman-refu_n_285394.html

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There is Work Out There For You : Retool for Job Success!!

As you know, this blog is about taking control of your life. Your money. Your wealth. We focus on how to protect yourselves against the MONEY GRAB going on by banks. While most banks stay on the right side of thing...the fact is WHEN A BANK IS TROUBLE, WATCH OUT BECAUSE IT'S YOUR MONEY THAT'S GRABBED. Almost Everyone one, every organization has a debt problem. But of course, when debt problems add up to Trillions of Dollars. Who pays for it?

You all ready now the answer. Yet, you can't just sit back. You need to stand up and take control. Even when times are tough, if you persist and dig deep, you can improve your life.

WE ARE ALL CAPABLE OF CHANGING OUR LIVES. WE ALL HAVE CERTAIN GIFTS AND SKILLS THAT CAN LED US TO SUCCESS. WE HAVE THE INHERENT ABILITY TO OVERCOME ANYTHING.

I saw this article today and it reinforced a theme, an idea running thru my head. Essentially employer's are having trouble finding qualified applicants for accounting, health care, software sales, actuaries, data analyzing, physical therapy and engineering. There seems to be a "mismatch" between the skills current job applicants have and the skills needed for the job.

While the media screams "recession, recession, hopelessness, recession" (Yes it's true there is a recession), it could also be pointed out that there are opportunities to succeed. You do not have to stay jobless or without money.

Kate Lorenz from Career Builder has a great article on How to Find A Job During A Recession. She talks about 9 steps to getting yourself back on track. The italicized Bottom Line are my interpretations of each step.

The steps are:

Step 1.) Take a close look at industry data. Bottom Line: Do research on industries looking to fill jobs, find out how is hiring, & learn to do what it takes to get that job.

Step 2.) Freshen up your skills. Bottom Line: The internet equalizes the knowledge field. If you don't have time to learn offline then study online. No excuse.

Step 3.) Try part time of freelance work. Bottom Line: Become some persons apprentice or intern so you have a foundation in the skill area you are developing.

Step 4.) Rev up your social networking. Bottom Line: It's all about connections. Whoever you meet, just tell them what you seek to do. Be come a walking, talking billboard.

Step 5.) Think in terms of results. Bottom Line: Talk about your achievements and what you have actually done.

Step 6.) Role play. Bottom Line: This is not about your acting skills. Practice what you will do and say to create your opportunity and get what you want. Don't care if you stand in front of a mirror, or talk to your pet, or video record yourself and play it over and over. Just Do It.

Step 7.) Polish your brand and market it. Bottom Line: We all "judge a book by it's cover". Never assume. Dress for Success and put forward the best you.

Step 8.) Find opportunity in your current position. Bottom Line: Perhaps there are tasks in your current job that can put a positive eye on you. Maybe there is an opening. Brighten your star with current management. Do a little extra. A door can open.

Step 9.) Be Realistic. Bottom Line: You are not alone, so there is competition. It will take time but never give up. Just focus on your efforts and believe in yourself. It can take several months so be ready.

I truly hope this helps you. The goal is to provide a spark, so your engines start revvin' up.

Remember to believe in yourself. Accept the support and love from family and friends. Always remain hopeful. Commit to action. Just Do it.

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Oh No You Didn't....More on the Citizen's Economic Theory of Relativity

I guess it boggles the mind when are lead to believe "The Economy is getting better."

We are living in the Economic Theory of Relativity. It goes something like this. In the beginning of the year we were told that THIS IS THE WORSE ECONOMIC CRISES SINCE THE GREAT DEPRESSION. Fear everywhere. Banks were collapsing. Governments were crumbling. People hoarding cash. Pensions going bust. Trillions of Dollars in citizen wealth vaporized.

So the Heads of State got together and announced Massive Measures to save the world. They said we must give trillions of dollars to the banks for without them we shall suffer. So they gave. We must lend trillions of dollars to big businesses for without them you shall have no jobs. no security. So they gave and gave and gave.

Wait a minute...are not the world governments in Debt. A Resounding "YES, but it doesn't matter". We can just print money. Print money. Raise the taxpayer debt burden. Just print and give.

So give they Did. The results are MAGNIFICENT. Did you hear? Banks are making more money than before. The Auto industry is way up. Can you say "Cash for Clunkers". Wow. Health Care companies can't stop making money. Oil is Up. Mobil, Chevron, and their buddies are just rolling around with loot. Will you look at that, the stock market is up. Give Praise. Give Thanks. Hand slaps. Hugs, kisses, job well done. Businesses are Back in Business.

But wait a minute Where's Our Bailout. The Citizen Bailout. Well you didn't notice. The BIG STIMULUS was passed. And it sure STIMULATED. We received job security. We were given a break on paying our bills. Every persons pension, IRA, stock investment was protected and insured. The government sent out $50,000 checks to everyone...Oh Yeah wait a minute...

We were STIMULATED by Media Noise. Yes. The Media told us things are better. And Dammit It Sure seems that way...IN MY MIND.

So let's look at a few recent indicators of the success of our economy.

Surge in Homeless Pupils Strains Schools. This is how the bailout money protects children!!!!!!

Gold Way Up. Just Broke $1000 per ounce. Dollar Way Down. That's great. Oh wait a minute. Most people have their investments in dollars not gold.

Consumer Credit Contracts a Record $21.6 billion. Love it. That means we are no longer debtors...Oh hold on. Banks will not lend. Banks are hoarding cash, including the bailout money. Less credit. Less small business loans. Less spending. More job loss. With cash gone many people relied on credit.

Food-Stamps Reach 33.8 Million in April, 5th Consecutive Monthly Record. There is nothing good about this.

216K Jobs Lost, 9.7% Unemployment Rate. This highest unemployment rate in over 25 years. Ummmmmmmm.

Let's not forget that there are more foreclosure than ever before. More not less. Foreclosure filings are UP not DOWN.

Let's close out with Health Care Stats from SICKO.

So goes the Citizens Economic Theory of Relativity.

Let's move on. Work together and fight for what's good for us all.

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Do Not Keep All of Your Money In The Same Bank!!

Let's keep this real simple.

If you have a Chase credit card then you should not have your checking or savings account with Chase. And don't forget, Chase owns Washington Mutual.

If you have a Bank of America mortgage then you should not have your checking or savings account with Bank of America. And don't forget, Bank of America owns Countrywide, so the same rule applies.

This rule applies if you guaranteed or signed a loan on behalf of someone or a business.

Let me explain. The banks are so desperate they are doing anything they can to recover money. Normally, if you did not pay a debt owed to a bank, then the bank must file a legal action in court, obtain a court ordered judgment, located your property, bank account or job, and place a lien on what you own. This includes garnishing wages. This is a long and costly process that does not serve a banks best interests.

So...they have come up with a great solution.

If you are behind on a Chase credit card, then no worries Chase will just take the money from your savings or checking account. The best part...they don't even notify you first. One day you wake up and your money is gone.

Or...let's say you are a guarantor on a Bank of America (BOA) personal or business loan and the loan is unpaid..well no problem for BOA, they will just take the money from your account. Same day, same time.

Now in response to these immoral (perhaps illegal) actions, the bank will say "We have the right to do it." Perhaps they do...perhaps they don't. The problem is, once the money is taken from the account, one must go through HELL to get it back.

As you read this, lenders are combing the records of every customer who has an outstanding debt or the responsibility of another person's debt. They are then matching this information with checking and savings accounts for the same customers. The next step is to just take the money from the account to pay off the debt.

It's a simple process from their perspective. A destructive process from the account holders perspective.

Now admittedly, there actions are justified to a degree. If a lender is owed an outstanding obligation why should they run around chasing a customer, especially if the money is sitting in an account by the same customer.

So beware and follow these rules.

1. Your checking account should be at a separate bank from your savings account.
2. Your savings and checking account should be at a separate bank from your credit card account.
3. Your savings and checking account should be at a separate bank then your mortgage loan.
4. Your savings and checking account should be at a separate bank then your business loan.
5. If you are a guarantor for any type of loan then make sure you do not have a savings or checking account at the same bank.

Keep this in mind and protect your money.

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Never Throw Good Money after Bad

I have learned so much from talking to people who can't pay their mortgage. They are afraid they will lose their home. They are concerned about their kids, their family, their stability. On top of that they usually have high credit card debt. Most of all, they take it personally and feel like they failed. They feel like they're not in control because of tight finances.

I always say "I've been there, we've all been their, you are not alone. You will get past this"

It is important to empathize with people and respect their feelings about their situation. Each persons' circumstance and their reaction to it are unique.

YET, how the problem is resolved is ALWAYS THE SAME.

Don't Throw Good Money After Bad!
Don't Throw Good Money After Bad!
Don't Throw Good Money After Bad!

Hmmm...Let me see...what's Good money after Bad.

Well, if the mortgage balance is higher than the value of the property (aka being Upside Down) or if you are spending most of your income on mortgage payments or if you neglect to pay other expenses or if you are draining your savings or retirement money...basically anything that is better investment than your mortgage payment, then making mortgage payments is throwing good money after bad. What's the primary reason to own a home. At the end of the day it's about wealth preservation and creation. Everyone buys a home in hopes that it will increase in value over time, this way we can get a return on thousands of dollars in mortgage payments, years of repairs, upgrades, taxes, insurance, and utility payments. A piece of your estate that can be passed on to your children.

THIS TIME THINGS ARE DIFFERENT. You cannot rely on the old saying "the real estate market will bounce back and prices will return". While it's true real estate markets move up and down, there is no way property prices will return to the levels we saw from 2004 to 2007. No way. This means if anyone purchased a property during 2004 to 2007, it is likely the purchase price was at the peak of the market. This scenario is not limited to purchases. Many people refinanced at the peak of the market because..well...that was the time to extract tens of thousands of dollars from a home. It was when anyone with a good credit score and a warm body could get $100,000.

Well, Peak No More. The gold rush is a bust. Everything was built on inflated appraisals and of course, greed. The Kool Ade went empty and the Band Aid became necessary. Most properties will continue to decline. It is estimated that by 2011, almost half of all mortgages will be "underwater". So don't be fooled if you hear the real estate market is getting better. It's better for people looking to buy foreclosures and cheap houses since there is a glut of property and everything is cheap.

So for those of us who took out mortgages at(whether to buy or refinance) 90% to 100% financing, option arm, adjustable, or even fixed rate, repeat after me..."My property value will never be what I(purchased or refinanced) for, and it is likely I will not have any equity.

What about credit cards with interest rates of 16%, 17%, 18%, 24%, even 30%? What about the new fees, such as membership fees and other hidden fees? Does it make sense to make these payments? Are you throwing good money after bad? Ask yourself, even with good credit, what are the chances you can get another credit card with a lower interest rate? Or ask, How come the credit card company won't lower my interest rate even though I have good credit?

So repeat after me..."I will never payoff my credit card unless the credit card company lowers my interest rate to 5% and reduces my principle".

Let's make no mistake. The banks primary motivation is to fix their own credit and debt problems (which by the way is worse than yours). How can you explain that despite this current recession, job losses, foreclosures, high debt burden, the banks, according to the Financial Times, were able to "collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers amid the deepest recession since the 1930s...The fees are nearly double those reported in 2000...".

So repeat after me..."It's so obvious the banks are doing anything they can to get cash from cash strapped consumers. Why am I surprised, it's a bank, no one owes me any favors"

There is this moral issue about being responsible for a debt after you agreed to take it on. In fact, it is a question of integrity. Essentially, once we sign on the dotted line we must stick to the deal under all circumstances.

Ask yourself, is it fair for the government, big banks, big businesses, and other power players to get a bailout. Why can't you use the same techniques banks use when they are in trouble - DEBT FORGIVENESS, LOW INTEREST LOANS, STOP MAKING LOAN PAYMENTS, TAXPAYER FUNDED GOVERNMENT BAILOUTS, in effect, A bank does not throw good money after bad.

It is your duty to protect the financial well being of yourself and your family. You do not have a moral obligation to pay a bank anything. Your obligation is only legal. It is not a crime to put your money to best use.

So repeat after me..."I will never throw good money after bad".

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Foreclosure Defense Rule#1 : Always Respond to A Foreclosure Case In Writing

All too often, when a homeowner is served with foreclosure papers, they put it in the junk mail pile. In fact, homeowners pretend that it does not exist. Just a thick package of papers that will magically disappear. Sometimes, homeowners think that by talking to the bank on the phone, the foreclosure case is somehow stopped.

It's only when they receive a Notice of Sale all hell breaks loose. All of a sudden the case magically re-appears. My favorite excuse is: "We were never served any papers." I don't think so. While it's true that many foreclosure papers are not necessarily served as the law requires. For example there is a term called "gutter service", which essentially means the papers are just thrown on the ground in front of your house, in the gutter. The truth is most homeowners receive the papers in some fashion, so they have NOTICE that a foreclosure has started. It's just they choose to ignore it.

Let's get real. This blog sole purpose is to help people protect their home, protect their wealth, protect their financial future. So if there is anything that you learn from Never Sign Your Deed, its

ALWAYS RESPOND TO A FORECLOSURE ACTION IN WRITING. It is your right to defend your self. In fact, a written defense will accomplish one main objective. IT WILL SLOW THE FORECLOSURE DOWN. It is always, 100% of the time, to a homeowners advantage to slow a foreclosure case down. Why? You never know. Perhaps circumstances change that allow the homeowner to keep the property. Perhaps there is a chance to get some equity out of the property. Or the homeowner simply needs to time to get it together. What ever the reason, a written defense is mandatory.

The written defense must be mailed to the attorney who started the foreclosure. The written defense must be mailed and filed to the court where the case was started. You should consider hiring an attorney. If you can't afford an attorney, then contact a local non-profit or legal aid. If that does not work, then prepare your own answer and write yourself.

What should you say? You should say anything and everything that you feel may be wrong with the foreclosure case and may be wrong with the loan. You can contact the court where the case started to see if they have any assistance for self-represented people.

I must admit that there are some good resources on the internet. However, it is not a substitute for good legal advice.

All and all, do not sit on your ass, bite your nails, play the "if I ignore it, it doesn't exist" game.

Here are a few resources that can help you or someone you know:

• If you or someone you know wants to learn more about a foreclosure, go to this link : What is Foreclosure?

• Always please review our -Foreclosure Dignity Organic Bill of Rights.

• If you or someone you know is feeling unsure and emotional about the situation. They need more confidence, then please read : Foreclosure Dignity

• For a brief introduction on laws that are to protect property owners then review Your Rights link.
  

All in all, this issue fires us up. To often we speak to people who let a foreclosure case go on to the last minute. All of a sudden the homeowner is scrambling, perhaps considering filing bankruptcy, and making "under the gun" decision when...

If they read this post, they would have more control and perhaps some peace of mind.

Thanks for listening.

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Tenants in Foreclosure Properties Are Now Protected Under Federal Law

If you are a tenant, that happens to be living in a property in foreclosure. No need to sweat. There is a recently enacted federal law that gives tenants time to get it together and move or even stay.

If you purchase a property at a foreclosure sale or you are a lender that takes the property at a foreclosure sale and there are tenants in the property, you better start sweating.

Under the Helping Families Save Their Homes Act, a tenant has the right to stay in the property after a foreclosure sale for a minimum of 90 days. If the tenant has a lease, then THE LEASE STAYS IN EFFECT after the foreclosure sale.

Now let's review specific provisions of the relevant law under sections 701 to 704:

• The law applies to a federally related mortgage loan on any dwelling or residential real property.
• The new owner after foreclosure sale, which includes a lender who takes the property must give a "bona fide" tenant a 90 day notice before the tenant can be evicted.
• A tenant with a "bona fide" lease entered into before the notice of foreclosure has the right to stay until the lease ends. EXCEPT that the new owner after a foreclosure sale can terminate a lease, if the new owner intends to occupy the property as his/her primary residence. This is still subject to a 90 day notice delivered to the tenant.
• Section 8 Tenants are protected under this new law.
• Who is a "bona fide" tenant? It is an individual or individuals that are not the prior owner of the property and are not the child, spouse or parent the prior owner.
• What is a "bona fide" lease? the lease or tenancy is based upon an arms-length transaction and requires rent that is not substantially less that the fair market rent for the property, which includes any reduced rent or subsidy due to a Federal, State, or local subsidy.
• What is a "federally related mortgage loan" – a) It is secured by a first or subordinate lien on residential property (incl. condos and coops) of one to four families or, b) it is made in whole or in part by any lender the deposits or accounts of which are insured by any agency of the Federal Government or, c) it is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by the Secretary or any other officer or agency of the Federal Government or, d) it is intended to be sold by the originating lender to the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, or a financial institution from which it is to be purchased by the Federal Home Loan Mortgage Corporation or, e) it is made in whole or in part by any "creditor"...who makes or invests in residential real estate loans aggregating more than $1,000,000 per year. For a complete definition of federally related mortgage loan" please review section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).

This law helps tenants stay in a property after foreclosure. Most important if a tenant has a "bona fide" lease, then the tenant gets to ride it out.

So the net effect is this. No one will bid for a property at a foreclosure sale that has tenants in it. The lender will end up taking the property back. More properties on the books of lenders. Not good for lenders. Lenders are in for it now. A big positive is that lenders will have an incentive to modify a mortgage loan or strike a deal before a foreclosure sale, if the property has tenants.

I must admit, I like this law because it tips the scales towards the people and away from the lenders.

We'll talk about this some more later on. Enjoy your day.

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