Is this what I had in mind?

When I took this assignment I was all bright-eyed and bushy-tailed.  Man I thought, “I am going to do it right this time around.”  I figured I was going to re-enter the marketplace and “do well, while doing good.”  After all, isn’t that what capitalism is supposed to do?  Wasn’t the problem with America, and thus the world, the fact that too often the players subscribed to the idea that profits were the only real pursuit?  Well if nothing else this term has served to continue my world tour around the reality: “It is actually the “people” that are lost.”  The market knows quite well what it is doing and why it is doing it.  I see now that beyond a shadow of a doubt – the game is rigged (everywhere you look).  We continue to treat the “abnormalities” as if they are aberrations, when in truth they’re the norm with too much frequency to believe that there isn’t a concentrated effort to provide an uninhibited path to wealth for some, and an endlessly laborious, inadequate outcome for others.  Early in the internship I learned that I had no balance to work with in the relationship between the bank and homeowner.  The homeowner had assumed financial responsibility for any shortfall in the event the lender repossessed and resold the property.  While the bank had agreed to certain parameters also, they were apparently above the law, while the consumer was below the concerns of everyone (including many of their brainwashed fellow citizens).  The banks could only be penalized in the court of public opinion; on the other hand the the consumers, both the “responsible” and the “deadbeats” would serve time for these crimes.  The likelihood of the public raising their ire to the point where it was damaging to the status quo was raised by the national “Occupy” movement, but once the steam ran out it was back to business as usual.  The bank’s response to being exposed as fraudulent practitioners through the “Robosigning” scandal wasn’t enough to make them bring there ball back and play fair.  Never fearing Congress stepping in and prosecuting, the banks halted the outflow of foreclosed properties into the marketplace, further injuring an already crippled marketplace, and held the states ransom to neogtiate settlements of the criminal charges that Robosigning warrants (at least at the state level, no need to worry about a Federal prosecution since the AIG thing would die with the banks).  I realize I am pissing on the dreams many Americans have to announce that there is no democracy at work here but,  “There Is No Democracy At Work Here!”  THE GAME IS RIGGED PEOPLE.

For me, it isn’t the end of the world.  I have been an African-American for most of my life (and simply a “nigger” for portions) so I am accustomed to rhetoric vs. reality.  But the depth and breath that this reality runs is even shocking to me.  Fairplay Realty-Elite is a great company, and I may be able to make a boatload of money working here.  But I would be well-advised to dismiss any notions of social responsibility from my role as an Affiliated Broker because I doubt management would be willing to tolerate my foolish idealism for too much longer.

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The Saddest Case I Ever Faced

As a regular course of activity I deliver a series of flyers to clients that are at various stages of foreclosure processing.  This week I was contacted by a good friend that was a member of my cohort at the University of Oregon that referred “a family that was enduring some challenges that seemed to fit in the wheelhouse of the things that I do”.  Apparently the friend was so impressed with unending hours that I grace her with insights of what my week-to-week activities consist of that she referred a personal friend to Fairplay Realty-Elite as a possible source to address a very complicated real estate matter. The following story is an accurate depiction of the events, cross-references to another dynamic story that I recently heard.  As always, the names and addresses have been deleted to protect the privacy of the individuals involved (but if you try really hard you can probably figure out who the referral came from :).

I recently read a story about a doctor, a resident, and an intern.  All three were working in a pediatric oncology ward at a children’s hospital and were particularly smitten with a case involving a 13 year old girl who was enduring painful cancer treatments.  The challenge of the case was heightened by a number of peculiarities that were described in the story.

a. The child was apparently quite beautiful in both spirit and physicality.

b. There was a point in the treatment regimen where the Dr.’s were certain the cancer had went into remission, only to discover later that this was not the case.

c. Through every failure, through every painful treatment, it was the terminally ill child that soothed the pain of not only her own parents, siblings, family, and friends – but also the hopeful medical staff.  It was an amazing story.

I was recently reminded of the ebbs and flows of triumph and tragedy while attempting to negotiate a settlement on behalf of a Portland area family facing foreclosure on the family’s childhood home. The case didn’t directly involve life or death, and certainly it didn’t involve the amazing courage of the little girl in the story.  But it did challenge my perception on what qualifies as a tragedy and the fine line we walk in leading people through the dynamics that these challenges can provoke – both personal and professional.

I was first asked to speak with the extended family of a friend’s – friend.  The contact explained that his wife and her brothers (2) had inherited a home and were facing some issues because of delinquent taxes.  Upon interviewing the wife, I learned that there were additional complications to the situation:  Namely, the drop-dead date for repayment of the taxes was fast approaching and the family was actually facing forfeiture if we couldn’t resolve the issue.  Upon interviewing the family as a group it was also revealed that the home was left to the siblings, by their deceased parents, with no mortgage debt.  Having no immediate family to care for, the youngest brother had been allowed to live in the property for years, with sole responsibility to make the tax and utility payments and maintain the upkeep on the property. In the midst of my queries to determine how such an initially moderate amount of money could be overlooked, the younger brother blurted out and emotional confession that he had hidden a drug problem from his siblings for several years and that this had led to the delinquency.

In a period of 60 minutes I had walked into a situation that had escalated from the much simpler but unfortunate potential loss of a home, to the possibility that this family could be irretrievably damaged by the revelations that had been bought out in what was intended only as an informational meeting.  The eldest family member, a PhD professor, immediately expressed that he was appalled by the actions of his “chronically irresponsible” younger brother.  My original client, the middle child/sister, was a little more understanding and took a limited exception with the eldest brother.  She stated that it had been their parents wish that the elder siblings continually monitor their developmentally compromised younger brother and that neither of them had done so.  Seizing the moment, I attempted to redirect the parties to the idea that their parents would certainly not want them to lose the home to the county assessor, and that given our limited time to cure the default the sale to an investor was probably our most reasonable course of action. But my small claims mediation instincts kicked in and I immediately drove the parties back to the one mutual interest that I knew they shared: their parents intention that they remain a family unit. The parties agreed to entertain investors offers provided that the investors could close a transaction quickly.

I completed an assessment of the property in the same manner that I would construct for a potential auction property and disseminated the information to the company’s core group of investors without delay.  Several investors dismissed the property due to the limited  projected profits.  However, there were a couple of newer investors that the property appealed to because it represented a simplistic first project.  We prepared what represented a full price offer (based on my original proposal to the triumvirate) and I delivered it to the seller’s.  The eldest brother and the middle child/sister gave their immediate approval; the youngest brother rejected the offer based upon his assessment that the offer was “insultingly low!”  I pleaded with the younger brother to recognize not only the motives of the purchaser but also the conditions that were driving our need to consider any offer a victory at this point in the process…but to no avail. Time ran out and the home was forfeited for delinquent taxes.  In spite of my efforts to mend this potentially damaging event I would guess that the resulting division may not be broached in this lifetime.  I am reminded that while our work is certainly a capitalist endeavor, in truth, it represents so much more.

The little girl being treated for cancer took an unanticipated turn for the worst and died.  But the actions leading up to her death certainly were life-giving for the people who were charged with her treatment.

As I juxtaposed the story of the little girl to my real life encounter with this family I was smitten by this reality: How often do the things each of us encounters endures have a life-granting capability for those who are peripheral characters?

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Oklahoma Attorney General Opts-Out on a Substandard Settlement. For Ethical Reasons?

Every Thursday evening at Fairplay Realty-Elite is dedicated to what we call “Opportunity Night.”  Opportunity Night is probably the most important event in the Fairplay Realty arsenal.  It is on this night that the various territory managers come together and present their most enticing deal structures to our investor clients.  This is also the night that several of our clients that are enduring the emotional rollercoaster of an impending foreclosure will potentially be relieved of that stress as an investor steps up and puts an offer in on their shortsale property.  This week I have been asked to coordinate Opportunity Night.  The challenge right now is that we are all having a dickens of a time locating foreclosure and shortsale properties that can be purchased.  How can it be so?  We certainly can walk down virtually any block in the state of Oregon and point out the foreclosed homes?  But, it seems, the banks have frozen all transactions.  Of course they could never acknowledge this fact because they would be in violation of any number of laws including: collusion, anti-trust, redlining…just to name a few.  My supervisor, Jeff Potts, has stated that I must find at least 5-6 purchasable properties or we risk having our investor-clients putting their money back in the stock market.  As I contemplated this insane condition I came across another story that both explains and parallels the circumstances that we are facing at Fairplay Realty-Elite…

All who know me have endured my rants as I have voiced my displeasure with the latest Obama Administration offer to the banking industry: Settle the mortgage quagmire you are responsible for…for a paltry $28 billion dollars. I realize that $28 billion is not a small sum as it relates to the net worth of an individual.  But in the grand scheme of the national destruction caused by the mortgage fiasco, and the fact that the settlement doesn’t allow for anything close to a share that would close the loss gap incurred by the average U.S. homeowner – $28 billion is without question “paltry.”

My initial reaction when I heard that there was a rogue state that had chosen not to participate in the settlement was that this would likely be explained as courageous individualism on the part of that state’s leaders.  I suspected that such individualism had to have emanated from Massachusetts, Minnesota, or Oregon. Needless to say, I was beyond shocked when I was informed that it was actually the state of Oklahoma?  Odd, “I thought Oklahoma was a red state ?”  It turns out that the great state of Oklahoma didn’t hold out for benevolent reasons.  The state’s conservative attorney general thought that the mortgage settlement was a great place to stage the obligatory ideological protest. You know, to keep up the charade of the 2-party system.

So much for identifying a non-partisan political issue.  I would later learn that Okie Attorney General, Scott Pruitt,  has never been one to miss an opportunity to take a swipe at the Obama Administration.  While not an avid fan of the current administration myself, I find it maddening that public officials that were elected to effort solutions for societal ills continue to fall prey to the status quo by engaging in unproductive rhetoric designed to make the other side look incompetent. How can this behavior be seen as purposeful as the people whom they have been elected to work on behalf of continue to suffer?  It is childish and an abdication of legislative responsibility to continue to entrench your constituents in the downward spiral of events by seizing every opportunity to re-route an issue to more partisan confrontation.

I recently read a blog by a guy named Foster Kamer titled, ‘Did Oklahoma A.G. Scott Pruitt, Mortgage Settlement Holdout, Sell Out His State for Wall Street?’ In the article the blogger offers evidence that in the past the Attorney General (“AG”) had accepted financial gifts from a litany of Wall Street-affiliated financial institutions and therefore was complicit in choosing to withdraw from the settlement as a result of his support for the financial industry.  He offers (as damning evidence) a letter drafted by the AG of Oklahoma, Mr. Pruitt, to the lead AG on the settlement, the AG from the state of Iowa.  In the letter, the Oklahoma AG posits awkward claims that a settlement would lead to an unfair advantage for those who are the recipient’s of settlement funds over persons who continue to dutifully make their mortgage payments without assistance (insert: “intervention”)?  While I think the blogger has certainly tapped into an obvious trail of evidence, I would also offer that the trail is too obvious to assume it is a path to the truth. It would be akin to Peter Falk’s ‘Colombo’ wrapping up an episode in the first 5 minutes based upon the evidence he’s led to by the beautiful vixen in the bikini!

The Obama Administration is clearly beholden to the interest of the financial services industry over the needs of the people who elected him. The Obamites, and the two administrations prior to them, have each shown a propensity toward a failure to hold institutions accountable in the same way that they expect individual responsibility to be adhered too.  This is particularly true for those individuals that are farthest removed from the sphere of power.  I cannot concede the to the concept that one party is for the little guy, and the other party is for big business.  Both are a shill for the institutions, make no bones about it.  What the AG of Oklahoma is doing, is his part to maintain the facade of differentiation/opposition.  Shame on you Mr. Pruitt commingling such a foundational piece of Americana, housing, with partisanship.  I wouldn’t be so quick to grab that low-hanging fruit Mr. Kamer. If you have designs on a long-term political career, moves like this could come back to haunt you.

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“Don’t Ever Interrupt Me When I Am Negotiating Again!”

Last week I was lauded for closing a transaction that many thought would never be sold.  I wish I could wax poetic about my unique strategy in getting the deal done, but the truth is I got lucky and learned an invaluable lesson in the process.  The firm had been retained to sell a particular property for over a year.  I was told that this was an unprecedented period of time to retain a listing, but our client, a 2nd lien buyer, was firm in his price and had the patience of JOB, so we kept the property listed because periodically he presented us with properties that were actually priced to sell.  The home was small, unremarkable, and located in a downtrodden area of Gresham.  I was told by another broker of an old minister that called the office from time-to-time claiming that he had an interest in buying homes within a certain radius of his church.  The Preacher would use wayward parishioners to remodel the homes, and then sell them to other parishioners under favorable terms or rent them out.  So I went to see the Preacher, unannounced, and true to his word he had an interest in looking at properties within a 3 mile radius of his church.  We set it up to look at the house on Saturday.  We weren’t there 10 minutes and he agreed to buy the home, for full price, provided he could meet with the lienholder to discuss matters related to the rehabilitation.  Recognizing the unusual nature of the request, I told the Preacher I couldn’t make assurances about a meeting.  He requested that I try hard to set it up and further agreed to provide me with a $1000 bonus if the transaction could be consummated.  In our Monday morning meeting at Fairplay Realty-Elite, I announced the sale of the home to the other brokers and was hailed as having pulled off the biggest coup since the sale of Manhattan for $24!  I saved the conditional meeting part for my weekly followup with Jeff Potts. To my surprise Jeff was all for the meeting.  He felt that under the circumstances we had nothing to loose by bringing the parties together, so he set it up for that afternoon.

Me and Preacher met just outside downtown and I drove us into the Pearl District to meet at noteholder’s condo/office.  The place was fabulous with north and west views to die for.  The Preacher got right down to business, explaining how he was a master carpenter and would whip that place into shape in no time. He explained with painstaking detail how he would correct the many quality deficiencies that someone had left the property victim too.  He spoke of his rehab schedule, on-and-on-and-on.  At some point, the noteholder started seizing moments where the Preacher would speak with his eyes closed (as if he were visualizing this beautiful transformation) by looking at me gesturing the universal – “WTF?”  Then the noteholder blurted out, “That’s all great Pastor, so perhaps you should sign off the contract and take your house and convert it to the fabulous structure you speak of!”  And the Pastor said, “Yes, I will but I’ll need to get an additional $20,000 to do the work at that level.”  To which the noteholder said, “And where do you plan to get that money from?”  And the Pastor countered, “Well, I’m going to get it from you!”   Bingo! Realizing I was dealing with a kook I offered, “Hey Pastor, I don’t think he’s going to offer you financing on the property and give you $20,000 to do the repairs, perhaps we should go?”  Without missing a beat, the Pastor turned to me and said, “Keith, these negotiations have taken a lot longer than I thought and I really need to go over to the specialty hardware store and pickup brass hardware for another project.  I wonder if you will take this $100 bill and run over to XYZ Hardware and pickup 20 brass cabinet pulls for me?  Please hurry they are closing at 6!”  Realizing it was 5:40 I hopped to, took the money and his chicken scratched directives, and barreled out of the building.  Upon hearing the click of the security door I realized that my participation in the meeting had been ended intentionally.  I was fuming!  I was insulted by his misleading reasoning for requesting the meeting; I was probably in line to be scolded for putting our client in this awkward position; And now, I had been put out of the meeting under false pretenses.  I paced around outside until 7:10 waiting for the Pastor to either call me to pick him up or come out of the building.  If it hadn’t been that he was at the home/office of an important client I would have left him there.  After all, he deserved it for what he had done to me.  It was then that I spotted him gleefully walking out of the elevator.  He barreled through the entry doors, and before I could set him straight he reached for his wallet, counted out 9 more $100 bills (as I stood with my mouth gaped open in shock), and said with great deliberation,  “Don’t ever…interrupt me…when I am negotiating – again!”  Message received.

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One to buy, Two to Sell.

I have been working with a particular couple since a couple of weeks before the internship started.  There are a number of clients that call Fairplay Realty-Elite as a result of an online search that brings up the company as a possible solution to their distressed real estate problems. Little does the consumer know that we aren’t solving their problems because it makes us feel all warm and fuzzy.  Solving their problems means somebody paid us a substantial fee: either the bank, the investor, the homeowner, or the attorney that accepts the referral for litigation. This particular couple, lets call him “Walter,” and her “Melissa,” were like manna from heaven.  They could have bypassed us and went straight to an attorney.  It seems that Walter and Melissa have decided to call it quits on their 20+ year marriage and they’re hoping to get some assistance in resolving the real estate matter.  Walter is the sole mortgagor on the home, yet he hasn’t lived in the house for 3 years.  Melissa has lived in the house the last several years but she doesn’t want the home…too many bad memories.  They share the long-term interest of maintaining a civil interaction for the benefits to their 16-year-old twin girls. Walter has sought our help so that he can give the house back to his bank under the terms of a “deed-in-lieu of foreclosure.”  Under this arrangement, the homeowner voluntarily signs over the deed in order to avoid the foreclosure on their credit file.  This house is an unusual because the homeowner actually has a small amount of equity they’re willing to grant to the lender.  The challenge is that the bank is too busy to return their call.  The uniqueness of the case is that although Melissa has had no interest in the financing on the property, and is not being foreclosed on, she does have an interest inherent in a community property state. This means that in the absence of a deed-in-lieu, she will show up in the county’s name search as having been foreclosed upon also, if the Walter just walks away from the property.  Walter and Melissa would like to buy a replacement home in Melissa’s name so the girls lives will not be totally uprooted with a relocation. While Melissa can buy her own home outside of the subject property county, purchasing in the county would be a challenge because she could show up as having a deficiency judgment on a recent foreclosure when the title company conducts the obligatory judgment search for Melissa just prior to closing.  While this could only happen if the lenders expenses consumed all the profit (and then some) prior to sale…anything is possible with today’s banking community.

What are we to do?  Although Monolithic Bank (their mythical lender) has no incentive to refuse the deed-in-lieu, current policy dictates the bank takes no risk, and taking back  property without the benefits mortgage insurance provides is not a common practice in this market.  Jeff Potts has assured me that this is one deal we can push to a successful close through litigation…if the homeowners are willing to bare the cost?  You just can’t make this stuff up!

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Marcy Larkins

Sometimes relationships drive my efforts more than the money.  I got a call from a woman I’ll call, Marcy Larkins, to discuss solutions to her foreclosure problem.  Marcy was a character if there ever was one.  She was the sweetest, sub 5 foot, Filipino woman…and from the very beginning I felt like I was working with the grandma I never had.  Just one big ball of unrelenting love.  You know, the kind of person that would sing your praises even if you were a convicted axe murderer?

It dawned on me this week that everyone at the firm throws me the impossible stuff because they know I don’t really matter anyway.  They don’t mean it in a malicious way, its just that I am an intern, and they’re in the game solely for the money.  Marcy was pretty typical for the type of client that we can’t help.  She owes too much on her home to sell it for full price and still pay the fees.  Oh yeah, Marcy doesn’t want to move out of the house either!  Because the house has too much sentimental value because she raised her kids there!  OK Marcy, sure thing.  Marcy stops into the office nearly everyday when she gets off of work at a local snack foods company; because I made the mistake of saying that I would continue to ruminate on ideas that would allow us to sell her home to an investor that will allow her to rent the home at something close to her current mortgage.  Yep, even though there is no profit in the deal.  I was trying to be nice.  Whenever Marcy see’s Jeff Potts, Mr. Oslund, or anyone else at the firm, she stops them and tells them how wonderful I am and how she is so confident that I will help her escape the situation.  I felt really bad that I wouldn’t be able to help her, especially because rather than just saying goodbye at the end of our pointless meetings, she stands in front of my desk with this uncomfortable silence waiting for me to stand up so she can end our meeting with: “Big Hugs!”  Marcy comes from a family of huggers!

One day, just trying to make small talk, I mentioned to Marcy that it was too bad that she didn’t have any relatives that could buy her home and rent it back to her.  We had exhausted this conversation so many times I considered it small talk to bring it up again.  But on this particular day Marcy offered that she had an estranged son named Ivan!  Ivan had moved to Vancouver and had minimal interaction with the family, primarily because he didn’t care for Marcy’s now deceased husband, his younger, less responsible brothers father.  Marcy assured me that Ivan wouldn’t help because he was detached from the family. The long and short of it is that I reached out to Ivan and he was willing to help.  In fact, Ivan was relieved that circumstances created an save face and yet reconcile with his family.  We’re still working on the details of the transactions but it should be fine.  I find it amazing how many times my CRES knowledge has intersected my business dealings of late?  I’m sure the only reason why this deal is still on my desk is because I felt an emotional attachment to the client.  Marcy said she is going to give me a big box of sugar-free snacks for my “babies” as a closing gift. I tell her over and over that the clients don’t give closing gifts to the broker; I have told her multiple times that my “babies” are 17 and 18 year years old.  Grandma’s….

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A That Glitters Is Not Gold

I saw the most atrocious act this week and I wasn’t sure what the right thing to do was.  Again, when I tell a story I change the names to protect the delicate privacy rights of the firms clients.  Last week I spent the entire week in the field with one of our primary investors, overseeing his rehabilitation of a fresh new acquisition and getting a feel for his “ideal” properties.  I was warned that the client had a long history of doing anything to shave a buck or two off of his rehabilitation cost. I was advised “not confront him if I see anything out of the ordinary.” “Alright,” I said as I dutifully reported to observe the practices of one of the firms major clients.  The first thing I noticed about this guy is that he treated the purchase like he had just bought a  storage locker without the benefit of being able to investigate its contents.  Most of the pre-foreclosure homes we sell haven’t been cleaned out, so the new owner will request a dumpster and trash the contents along with any construction debris that result from the rehabilitation.  Our “whale” on the other hand had his people comb through the house like it was a crime scene!  He personally walked through and picked up coins (especially old pennies?), personally weighing in on the value of the stuff that was left.  A number of Fairplay Realty-Elite folks swear that the guy found a mink coat in a house and that they’ll show me the coat at the next formal company event he brings her to (ick!).

On the surface his crew did wonderful work, but as I had been warned, this guy has some peculiar practices.  The house he is working on is a huge turn of the century home in SW Portland.  As a result of the 1970’s energy crises, many of these old homes had been converted to apartments and condos.  They were re-done pretty gnarly, and today the trend is to modernize them by improving their energy efficiency, and returning them to their original design. The problem is our guy doesn’t believe in disposing of all of his construction debris properly.  While removing the existing siding he discovered that the siding contained asbestos (some real nasty stuff that is highly regulated and expensive to dispose of).  Having not anticipated such large deconstruction expense, our guy chose to dump the asbestos siding in a stairwell cavity that he was closing in reconverting the property to a single-family home. Effectively sealing this highly toxic substance in the walls of this beautifully remodel, someone is buying into a toxic waste site!  Quite an ethical dilemma for me as I am well-aware of the hazards of asbestos. The problem is I work for the company that not only represents a client like this, but technically I am no expert on proper disposal and thus have no legal authority to opine on his practices.  I reported what I saw to Jeff Potts and he said, “Hey don’t brag because you got out of there without seeing some of his really bad shit!  In time my friend, in time.”  He was totally serious.

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