Foreclosure Rescue Scammer or AG Victim: You be the Judge
Jillayne Schlicke on 05 14, 2009
In order to go into the foreclosure rescue business, foreclosure rescuers must make themselves believe that they are helping the homeowner. This is done in a cognitive way, by attending many foreclosure seminars, reading lots of books and memorizing scripts that can be played back inside the foreclosure rescuer’s head over and over again until it becomes real and true to them.
Similar to how we fool ourselves over and over again when we say to ourselves “it’s only one drink,” “it’s only a cookie” and “it’s not really sex.” Self deception is very powerful and it appears to be working well with foreclosure rescuers. I hear many phrases over and over again such as, “it’s perfectly legal,” “homeowners want to stay in their homes,” and “if it wasn’t for me, then….” With the case of Joe Kaiser, we are starting to hear a different song. It’s the whine of the victim. You know the type of person I’m talking about who constantly complains about being victimized to the point where they transform into victim.
Joe Kaiser (doing business as PreFlop, LLC, G. Hobus Investments, LLC, Bobo Buys Real Estate, and Unclaimed Funds, Inc.) makes money selling foreclosure rescue sales courses and books (examples: ‘The Subterranean Marketplace in 2009″ for $997. “Learn How to Day Trade in Real Estate Online Using Craigslist for $667.) though not everyone has been a satisfied customer. Joe buys and sells homes in foreclosure but not just any kind of foreclosure: tax foreclosure. Some of you will remember fine movie, “The House of Sand and Fog” very well acted by Sir Ben Kingsley, Jennifer Connelly, and the beautiful Shohreh Aghdashloo. I assign this movie as extra credit for my college students because of all the possible title insurance issues surrounding the tax foreclosure plot. This movie should be required viewing for anyone thinking about entering the world of tax foreclosures.
In a very methodical way, described in his books, Joe locates homeowners who are delinquent on their real property taxes, and also have equity in their home. This is a bit like a needle in the haystack kind of work today but during the bubble run-up, as others swarmed the trustee sales, Joe focused on tax foreclosures. Interestingly, several of his victims have Hispanic surnames but I digress. Le’ts read the public records documents:
The Court found that Mr. Kaiser violated the Consumer Protection Act by soliciting homeowners with false promises to help them keep or save their home when partial interest deals do not actually result in the homeowner keeping or saving their home. The Court also found that, in the course of creating partial interest deals, Mr. Kaiser violated the Consumer Protection Act by falsifying real property excise tax affidavits and by acting as both trustee and co-beneficiary seeking a profit from the trust.
Kaiser solicits homeowners facing tax foreclosure and induces them to place their home in a trust, with Kaiser, through his business entities, as trustee and co-beneficiary. Mr. Kaiser does not pay the homeowner for their homes. Once title to the home is in Kaiser’s control, he pays the delinquent property taxes and stops the sale of the home.
The land trust…that Kaiser created give him complete title and control over the homes and leave the former owners with only two tenuous rights: 1) the right to some percentage of the sales proceeds if Mr. Kaiser chooses to sell the property, and 2) the right to occupy the property for one to three years, provided the former owner pays rent. These two rights are tenuous because the documents contain hair-trigger default provisions which void these rights if the former homeowner is even five days late on a rental payment or violates any of the other terms contained in the numerous documents Mr. Kaiser has them sign.
Mr. Kaiser testified that every partial interest deal he has created is actually in default…therefore, none of the former homeowners maintains their right to possession of the property or a percentage of the proceeds if Kaiser chooses to sell it. By virtue of the lease provisions and other contractual provisions for reimbursement of all of Mr. Kaisers expenses, his terms entitle him to receive either the entire home vacant or his share of the home’s equity without having ultimately paid any money….Homeowners who enter the transactions believing they are saving their homes are actually stripped of any ownership interest and are not even given a right of first refusal to buy back their home. No fully informed person, not acting under compulsion would enter a transaction with such onerous terms.
There is much more in the Findings of Fact and Conclusions of Law and if you want to learn how to “Negotiate Foreclosures Like a SWAT Team Leader” then by all means, meet Joe here.
There are some investors who feel sorry for Joe. Joe feels like he has been attacked by the AG’s office and is blogging about his new role as a victim. Let’s see if this logically works.
In the F&G M. transaction, Mr. Kaiser claimed he saved F&G’s home…What Kaiser actually did was purchase the home at the foreclosure sale and then had Mr. M. sign over his rights to the overage money from the foreclosure sale. As a result, Kaiser obtained both the house and the $45,428.47 in overage money he had paid at the auction. Kaiser never sold the house back to Mr. M. even when Mr. M. obtained a Realtor and made an offer. Kaiser then sent Mr. M. an eviction notice demanding Mr. M. immediately pay $2700 in rent or vacate the property.
I’m trying to work up some tears but they’re just not coming. Now it’s your turn: is Joe Kaiser a posterboy foreclosure rescue scammer, a victim, a sociopath, a combination thereof, or am I too justice oriented to become a real estate investor guru? I just can’t look at someone, flat-out lie to them, and steal their house and money. If that’s what it takes to be a real estate investor guru, count me out.
About the Author: Jillayne Schlicke
- Author's website: http://www.ceforward.com
- More posts by Jillayne Schlicke
- email the author
10 Responses to “Foreclosure Rescue Scammer or AG Victim: You be the Judge”
Leave a Reply
Live Comment Preview
Popular Posts
Recent Posts
Recent Comments
- Rhonda Porter: you must be so excit
- Jerry Gropp Architect AIA: Hi Rhonda- Good to s
- Chris Cliff: I am glad to see the
- Leanne Finlay: Tim, eventually I'll
- ARDELL: Craig, Proof of t
This is what makes Jillayne one of the most competent AND ethical instructors I know.
If we are ever going to turn around this tide of greed and corruption that greased our slide into this deep and painful recession, it is going to take the clear, fearless voices of peerless BS detectives like Jillayne to serve as beacons of passionate truth during these dark days.
Frank
ps: my vote for Joe is “sociopath”.
Hi Frank,
Thanks for the compliment. I am far from perfect, but you know this.
I believe people like Joe have a great internal need to believe that what they are doing is honorable. Because of this great need, they continue to look for and find evidence that backs up their beliefs and they make an unconcsious decision to ignore evidence to the contrary. When that doesn’t work, they shift blame outward onto others.
Jillayne,
Another great piece. You deserve a wider audience for your work.
Didn’t last year’s WA ST legislature put an end to this kind of contraption? Or is this for violations committed prior to that?
Was there evidence presented in the trial that Bobo actually helped anyone stay in their home, and save their equity? That is the claim he makes, isn’t it?
Also, another question. What were the available choices to the homeowner? Were the other choices any better? Wouldn’t every other choice involve leaving the home? If there was SO much equity in the home, couldn’t the government have simply allowed the tax lien to grow, rather than foreclose?
My over-riding question is:
Is there ANY legitimate and useful application of Bobo’s procedure, that produces any kind of societal good, or is the procedure only beneficial to Bobo, and his disciples?
Homeowners having choices is good, and if we are to preserve the ability to choose from a variety of options, then naturally, SOME of those choices may turn out to be bad ones. The goevernment cannot guarantee only good outcomes for everyone. Not for very long, at least.
More questions than comments (a new record for me, I think!), but I know they are like catnip to you….
Again, congratulations on a fine piece of reporting. We need this stuff, but even more importantly, we need this stuff read.
OK, gush-o-meter off
Hi Roger,
Thank you for your kind compliment. The Legislature took aim at foreclosure rescue scams with the passage of the 2008 Distressed Property Law. From what I read, the violations occurred prior to the DPL, and the violations that occurred were from the Consumer Protection Act.
There was evidence that Kaiser helped the homeowners stay in their home. But in doing so, the homeowner gave up their equity.
In terms of the available choices, it’s impossible to say without knowing each person’s individual circumstances.
To answer your overriding question, “Is there any legitimate foreclosure rescue service?” Well all the foreclosure rescue salesmen say that their service is legitimate.
My best advice to anyone being approached by a foreclosure rescue salesmen is to not sign anything without taking the paperwork to an attorney that YOU select and YOU hire with your own money. If you do not have money to pay an attorney to look at the contract, (some attorneys will let you hire them only for one or two hours, which can be more affordable than you think) then you can apply for free legal aid. Contact your state’s Bar Association for more details.
Thanks for the answers, and absolutely, anyone considering such a complicated deal should consult an attorney.
At least the attorney is required to act in a fiduciary manner, and could be sued (by another attorney!), for a course of action that was in such opposition to the homeowner’s best interests.
This quote from the press release answers my questions most forcefully….
“Kaiser entered transactions with more than 300 property owners. No one has ever successfully regained their home from Kaiser.”
The essential promise of “foreclosure rescue” is that the “investor” will bring the home current, stop the foreclosure and subsequent eviction, and allow the borrower to take certain steps to regain ownership of their home.
While those steps may be difficult to accomplish, or unlikely to occur, one would have to think if they occurred occassionally, there could be some merit to the program.
Since none of the 300+ transactions resulted in the advertised outcome, we can conclude it has no mutual benefit or societal merit, and is only a predatory and parasitical ruse to enrich the parasite.
Another vote for sociopath.
More story at Seattle PI.com, as well as comments.
http://www.seattlepi.com/local/405975_foreclosure07.html
Joe defends himself here. There may be more to this story, NOT reported by the AG’s office. Makes you wish there were more investigative reporters out there.
The defense seems to be that there were more positive outcomes than the AG’s office claims, with people able to stay in their homes, that could not have, without Bobo’s help.
Hi Roger,
Remember that in Joe Kaiser’s eye’s it’s all good. Yes, people were able to stay in their homes….as renters. Kaiser testified that all have broken the terms of their lease which means Kaier is able to claim all equity for himself.
The AG’s office found the terms of Kaiser’s agreements with these homeowners to be unfair, deceptive, and a violation of the Consumer Protection Act.
[...] the Bar Association. Maybe this will help homeowners avoid predatory loan modification salesmen and foreclosure rescue scams. During the bubble run-up, we had many homeowners who used stated income loans and flat-out lied [...]
[...] “This is perfectly legal.” Before signing anything hire your own local legal counsel. Foreclosure rescue scams continue to be on the rise [...]