Compliance HUD Officer and Attorney Review of Mortgage Assignment/Subject to Financing
By Duncan Wierman on Jan 31, 2011 in Gurus Exposed, In the News
In case you haven't heard, a new "get rich quick" approach is making the rounds (again), and it's called "Mortgage Assignment/Subject to Financing."
The thing is, it's NOT a new approach. It's a new name for an old practice, as risky now as ever.
But the question is... Are you tempted?
I understand if you are. Its a slick marketing pitch. The guys promoting the course know our hot buttons, don't they?
But please, before you go off and do something that may land you in hot water, please go listen to an audio with Jack Sternberg interviewing a retired HUD Investigator/current Mortgage Compliance Training Officer and attorney Jeff Watson.
GET the audio interview here...
http://www.mortgageassignmenttruth.com
It's official. They have been deemed fraudulent transactions and fall under the category of a Foreclosure Rescue Scaml!
My advice?
As Jeff Watson advises at the end of the interview, "STOP AND THINK. One of the best attributes that a good investor engages in is thinking. Not a speculator, not a gambler, but an investor. And there is a huge difference in mindset and maturity. I want to urge people to develop the mindset and develop the maturity level to be the investor and give things a great deal of thought.
They cover "Mortgage Assignment/Subject to Financing" in terms of insurance fraud, mail fraud, wire fraud, racketeering, and predatory schemes in this call. In other words, this is important.
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February 4th, 2011 at 4:37 pm
Does this mean that plain “subject to” purchases are illegal as well? I know of some true gurus who actually buy “subject to” all the time and don’t just sell courses on it. They seem to be pretty ethical to me but maybe they don’t really know the laws either?
Is the “buy subject to”/”lease option to an end buyer” illegal?
February 4th, 2011 at 4:42 pm
I know other gurus are still preaching sub 2..
I used to buy sub 2 also … NOT ANYMORE !
On the webinar coming up there will be someone who went to jail for 16 months for doing a sub 2 deal. They will tell you their story ..
So there really is a Sub 2 Jail ! I believe in with our current politicians, we are going to see some more legislation coming that is going to punish many doing questionable, complex transactions.
I have removed the sub 2 course out of my Platinum System. I am no longer recommending ANYONE do these.
February 4th, 2011 at 5:42 pm
This is really big (and bad) news for investors who want to remain ethical. Please keep us updated on the webinar and other developments.
In March, I am planning to attend a “subject to” event by an ethical guru and attended one back in December by another ethical guru (this is the event where Sean Carpenter spoke and where we got confirmation that he is no longer working with Karen Hanover). I’m wondering what many gurus will practice and teach if “subject to” is illegal.
February 4th, 2011 at 7:10 pm
Duncan, I just listened to the Jack Sternberg interview again. I get the impression that the issue with fraud is when the mortgage loan has PMI on it. When ownership changes, PMI is no longer valid.
But what if the mortgage loan does not have PMI on it? It should be okay to take a property without PMI “subject to”, shouldn’t it, since there is no PMI that lapses?
February 5th, 2011 at 12:14 am
There is an OPEN Challenge call to Phil Grove, and Chris McGlaughlin and their attorney, to DEBATE their reasoning for believing this is a legal strategy.
They have accepted and the terms are being worked out. I dont know how they think they are going to win this debate over government representation on our side.
Chris is tending to backpaddle a bit from his last email he sent out.. but in the end his email still promoted Mortgage Assignments.
What amazes me is that people want to so desperately want easy get rich quick money – that they believe this type of marketing hype.
When the call is played, you will be introduced to someone who went to Jail for 16 months for doing “subject to” deals. His time in jail 16 months!!!
February 5th, 2011 at 1:02 am
More people concur – Mortgage Assignments are Illegal
http://www.trulia.com/voices/Home_Buying/True_or_False_You_can_take_over_mortgage_payments-64752
February 8th, 2011 at 2:49 pm
Can you just use a land contract?
February 10th, 2011 at 5:17 pm
Mr. Wierman: You rely on Jack Sternberg for advice? He’s a convicted felon, and not for “due on sale jail” like he likes to say. Look it up. He spent time in federal prison, and all of the records are right there in Louisiana. Mail fraud. Misrepresentation. He owes more than a million dollars in restitution that he won’t pay. Your credibility is compromised by relying on a criminal like Sternberg and his proven history of dishonesty and manipulation. He severely damaged many people here in Louisiana.
February 13th, 2011 at 10:48 pm
It sounds to me like Mr. Singer has a personal ax to grind against Sternberg, and he’s using this as an opportunity to take a shot at him and try and further punish him. Singer ignores the fact that Sternberg is on the side of RIGHT with both a HUD compliance officer and an Attorney agreeing.
When I re-listened to the interview that Sternberg did with the attorney and the guy from HUD, they (Watson and Lacefield) seemed to be the main ones making the case that Mortgage Assignment and Subject To is fraught with problems – although Sternberg was definitely critical of it as well. And rightfully so.
But what I care about is whether real estate investors can pursue Mortgage Assignment and Subject To as a viable business model without fear of future liability. Seems to me that Sternberg learned some hard lessons 25 years ago when he had these issues and is trying to give us all the benefit of his mistake with some unimpeachable help from the HUD man and the attorney.
And if this debate is still going on today, with people on both sides disagreeing about what’s right and even what’s legal, I personally would be a little hesitant to cast judgment 25+ years later on Sternberg for the fallout that he experienced from doing Subject To deals that were ultimately viewed as a scheme by the authorities.
You think there is a lesson there? He should know.
Anyway, my request is that people save the personal attacks for the gossip columns and keep the discussion on the topic at hand.
February 14th, 2011 at 10:49 am
@ Mr Singer – I am aware of Jack Sternberg and his time in federal prison. EXACTLY why I am bringing Mortgage Assignment Fraud forward to the public.
As he was convicted for the exact same reasons I am saying Mortgage Assignments are illegal.
He served his time because of these Sub 2 deals. He also does not owe any restitution as you claim.
He has been a successful active investor since his release and works well within the law! He only wants to help those people who get on board with MAPS to be aware that they are committing a crime.
Now my question to you Mr Singer… You are hiding behind a HIDDEN IP – using a proxy address in Europe through Rapid Switch to hide the orgination..
So the very blog post you make is suspect !!! Be a man and come out into the public to state your real motivation and position..
I dont think you will because you are one of the people behind the promotion of MAPS!
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