[00:00.000 --> 00:09.240]  In Iraq, a pair of car bombs blasted through security checkpoints ringing the holy city
[00:09.240 --> 00:15.640]  of Karbala Thursday, killing at least 51 people, most of whom were Shiite pilgrims.
[00:15.640 --> 00:21.620]  Up to 183 people were wounded in the blast set off by suicide bombers driving cars packed
[00:21.620 --> 00:23.000]  with explosives.
[00:23.000 --> 00:27.560]  The bombings were the latest in a three-day barrage of attacks across Iraq that have killed
[00:27.560 --> 00:31.160]  more than 120 people.
[00:31.160 --> 00:37.080]  The Supreme Court heard arguments Wednesday in a case between AT&T and the Federal Communications
[00:37.080 --> 00:42.880]  Commission revisiting the legal concept of corporate personhood last highlighted under
[00:42.880 --> 00:47.440]  the court's Citizen United ruling on corporate campaign spending.
[00:47.440 --> 00:52.560]  The case focuses on whether a corporation can stop government agencies from releasing
[00:52.560 --> 00:58.480]  information obtained for law enforcement purposes by claiming such disclosures would violate
[00:58.480 --> 01:02.280]  the company's personal privacy.
[01:02.280 --> 01:07.120]  The Pentagon said Wednesday there were twice as many suicides last year than the year before
[01:07.120 --> 01:09.680]  in the Army National Guard and Reserve.
[01:09.680 --> 01:15.280]  The big increase involved soldiers who were not on active duty at the time.
[01:15.280 --> 01:21.000]  A watchdog group is accusing Supreme Court Justices Antonin Scalia and Clarence Thomas
[01:21.000 --> 01:26.800]  of conflict of interest over the court's landmark ruling in Citizens United, which overturned
[01:26.800 --> 01:30.280]  a century of restrictions on campaign spending.
[01:30.280 --> 01:35.400]  In a petition sent to the Justice Department this week, Common Cause argued the two judges
[01:35.400 --> 01:40.240]  should have recused themselves because of their involvement with Koch Industries, a
[01:40.240 --> 01:46.320]  corporation run by two conservative activist brothers who benefited from Citizens United.
[01:46.320 --> 01:52.080]  The Koch brothers provided backing for Americans for Prosperity, a group that distorted facts
[01:52.080 --> 01:56.920]  in campaigning against health care reform and climate change legislation and funneled
[01:56.920 --> 02:01.240]  millions of dollars to conservative candidates in the midterm elections.
[02:01.240 --> 02:06.680]  The petition states both justices, quote, participated in political strategy sessions
[02:06.680 --> 02:11.920]  perhaps while the case was pending with corporate leaders whose political aims were advanced
[02:11.920 --> 02:14.800]  by the decision.
[02:14.800 --> 02:20.320]  The ethnic Turks, known as Turkmen, have asked U.S. Ambassador to Iraq James Jeffrey to stop
[02:20.320 --> 02:22.520]  meddling in Iraqi internal affairs.
[02:22.520 --> 02:28.160]  A statement by the Turkmen Front, a political umbrella for ethnic Turks in Iraq, have accused
[02:28.160 --> 02:34.320]  Jeffrey of heightening ethnic and sectarian tensions in the oil-rich province of Kirkuk,
[02:34.320 --> 02:38.280]  which Kurds, Arabs and Turkmen all claim for themselves.
[02:38.280 --> 02:43.400]  The Kurds have deployed militias in the city, which they jointly patrol with U.S. troops.
[02:43.400 --> 02:48.640]  The Turkmen statement blasted Jeffrey's call to implement a paragraph in the Constitution
[02:48.640 --> 03:14.800]  that could lead to Kurdish control of the massively oil-rich province.
[03:14.800 --> 03:35.840]  It is in the course of an exclusive millennium that …
[03:35.840 --> 03:48.840]  Bad boys, bad boys, whatcha gonna do? Whatcha gonna do when they come for you?
[03:48.840 --> 03:54.840]  Bad boys, bad boys, whatcha gonna do? Whatcha gonna do when they come for you?
[03:54.840 --> 03:59.840]  When you were eight and you had bad traits You'd go to school and learn the golden rule
[03:59.840 --> 04:02.840]  So why are you acting like a bloody fool?
[04:02.840 --> 04:05.840]  If you get hot then you must get cool!
[04:05.840 --> 04:16.840]  Bad boys, bad boys, whatcha gonna do? Whatcha gonna do when they come for you?
[04:16.840 --> 04:21.840]  You chuck it on that one, you chuck it on this one You chuck it on your mother and you chuck it on your father
[04:21.840 --> 04:27.840]  You chuck it on your brother and you chuck it on your sister You chuck it on that one and you chuck it on me!
[04:27.840 --> 04:49.840]  Bad boys, bad boys, whatcha gonna do? Whatcha gonna do when they come for you?
[04:49.840 --> 05:04.840]  Bad boys, bad boys, whatcha gonna do? Whatcha gonna do when they come for you?
[05:04.840 --> 05:19.840]  Bad boys, bad boys, whatcha gonna do when they come for you?
[05:34.840 --> 05:40.840]  Screw you, Royal Linder. 20 years in the business, now reformed.
[05:40.840 --> 05:49.840]  He's gonna spend the show talking to us about the tricks and traps that Linder's pulled on you and what to look for.
[05:49.840 --> 05:51.840]  Nick, welcome to the show.
[05:51.840 --> 05:54.840]  Thanks for having me.
[05:54.840 --> 06:02.840]  Tell us about how you got into this and what led you to reform yourself.
[06:02.840 --> 06:09.840]  Sure. Well, Randy, I spent, like you said, about 20 years in the banking and mortgage industry.
[06:09.840 --> 06:19.840]  And I've done every type of loan there is, from residential and home equity lines to cars, boats, trains, planes, automobiles, all of them.
[06:19.840 --> 06:25.840]  And we were trained and led to believe from the very beginning that we're helping people.
[06:25.840 --> 06:34.840]  And that was a common thread that was through all of my career. And I had actually made a name for myself doing difficult loans,
[06:34.840 --> 06:39.840]  the loans that most of the other loan officers or the other lenders wouldn't touch.
[06:39.840 --> 06:45.840]  And I figured a way within the system to make those loans work and make those acceptable.
[06:45.840 --> 06:48.840]  And I built my reputation and my career on that.
[06:48.840 --> 06:57.840]  Due to the demise of the mortgage industry approximately three years ago, my career had pretty much stalled.
[06:57.840 --> 07:01.840]  And companies that I'd worked for had all gone on the wayside.
[07:01.840 --> 07:06.840]  And I started doing some research and I realized that basically everything I'd been taught,
[07:06.840 --> 07:13.840]  everything I'd learned and everything that had been common knowledge was a ruse. It was pretty much a lie.
[07:13.840 --> 07:18.840]  And I started doing some research and doing some background information
[07:18.840 --> 07:25.840]  and realizing that basically my career had been doing nothing but the opposite of what I thought it was.
[07:25.840 --> 07:29.840]  It really wasn't helping people in the grand scheme of things. It was hurting people.
[07:29.840 --> 07:36.840]  So that's how it led me to why you'd call me a reform blunder and really telling,
[07:36.840 --> 07:42.840]  identifying and showing people how in most cases the loans that they received and the monies they paid,
[07:42.840 --> 07:48.840]  they're charged for it, is not in their best interest. So it's been a long road.
[07:48.840 --> 07:54.840]  Yeah, that was an interesting point you brought up that in what you were doing,
[07:54.840 --> 08:00.840]  you felt like you were doing the right thing, that you believed you were helping people.
[08:00.840 --> 08:03.840]  And this is based on the training that you received.
[08:03.840 --> 08:06.840]  Absolutely. Absolutely.
[08:06.840 --> 08:13.840]  What did you do to convince you that what you were doing was helping people?
[08:13.840 --> 08:18.840]  Well, you're taught from the very beginning that the fundamentals of the banking industry
[08:18.840 --> 08:24.840]  and what you do everywhere from the lowly teller all the way up to the president and CEO of the bank
[08:24.840 --> 08:28.840]  is based on lending money. And that's the way the bank makes money.
[08:28.840 --> 08:32.840]  The bank does not make money on checking accounts. It loses money on checking accounts.
[08:32.840 --> 08:38.840]  The bank does not make money on savings accounts or vacation accounts or CDs or anything like that.
[08:38.840 --> 08:43.840]  Those are just tools to bring people in to get them to borrow money from the bank
[08:43.840 --> 08:46.840]  because that's really where all the money is made.
[08:46.840 --> 08:51.840]  So tying that with the human emotion of you're helping people and you're giving them what they want
[08:51.840 --> 08:53.840]  and you're giving them what they need.
[08:53.840 --> 08:59.840]  The other products that are offered out there are really just lost leaders to get them into the bank
[08:59.840 --> 09:04.840]  to take a loan of some sort, whether it's a credit card, it's a home equity line, it's a mortgage,
[09:04.840 --> 09:07.840]  it's an auto loan, whatever that lending product is.
[09:07.840 --> 09:12.840]  So it's really tied to that human emotion along with the profit margin.
[09:12.840 --> 09:19.840]  And you're taught that from the very beginning and it goes on all levels on all scales.
[09:19.840 --> 09:29.840]  So now that you've made the change, you've been saved, so to speak.
[09:29.840 --> 09:38.840]  I talked to Nick the other day and I was looking for the tricks and traps that lenders Paul.
[09:38.840 --> 09:44.840]  And can you kind of give us the rundown on what's Paul?
[09:44.840 --> 09:47.840]  Let's start with the application process.
[09:47.840 --> 09:49.840]  What do you need to know?
[09:49.840 --> 09:55.840]  Well, I think everyone needs to understand that the application process
[09:55.840 --> 09:58.840]  in most cases is really not what it seems.
[09:58.840 --> 10:04.840]  It's led to, whether it's a loan officer at a bank or it's a broker,
[10:04.840 --> 10:08.840]  we'll touch on the difference between a bank and a broker or a lender later on,
[10:08.840 --> 10:15.840]  but the application process itself leads most borrowers to believe that it's something very light
[10:15.840 --> 10:19.840]  information gathering and it's really here for their benefit.
[10:19.840 --> 10:21.840]  Again, remember, that's the common thread through all of this.
[10:21.840 --> 10:26.840]  We're doing this for you, you're not doing it for us, but that's not the truth.
[10:26.840 --> 10:30.840]  So you're gathering information and you're filling it out in this form.
[10:30.840 --> 10:35.840]  Now, for a mortgage application, those forms are fairly regulated at a federal level.
[10:35.840 --> 10:38.840]  They're Fannie Mae forms or they're Freddie Mac forms.
[10:38.840 --> 10:40.840]  They're uniform in design.
[10:40.840 --> 10:43.840]  They're updated on a quarterly, weekly, sometimes monthly basis,
[10:43.840 --> 10:47.840]  yearly basis depending upon what information needs to be captured.
[10:47.840 --> 10:55.840]  And every single box, every single line, every single checkmark needs to be completed
[10:55.840 --> 11:00.840]  or needs to be put in as that it's NA, it's not applicable, it doesn't apply.
[11:00.840 --> 11:04.840]  Most documents, if not all of them, but those loan applications,
[11:04.840 --> 11:07.840]  are left blank in many places.
[11:07.840 --> 11:09.840]  There is information that they say, well, we'll get to that later.
[11:09.840 --> 11:11.840]  You don't need that now.
[11:11.840 --> 11:14.840]  If you don't have it, don't worry about it, we'll get back to it.
[11:14.840 --> 11:19.840]  Every time that that's done, it leaves out information that's pertinent to the transaction.
[11:19.840 --> 11:25.840]  And in doing so, it leaves the borrower, it means you the borrower,
[11:25.840 --> 11:30.840]  in a very precarious situation because that means that there is information
[11:30.840 --> 11:36.840]  that is critical to making a proper loan decision based on your financial profile
[11:36.840 --> 11:40.840]  or your residential profile, it's all information gathering.
[11:40.840 --> 11:44.840]  Once that's, if it's not there, you really can't make the proper decision
[11:44.840 --> 11:46.840]  going through the process.
[11:46.840 --> 11:48.840]  Now, here's how it goes.
[11:48.840 --> 11:50.840]  The loan officer says, well, don't worry about it.
[11:50.840 --> 11:53.840]  We're not really sure what your credit score is right now,
[11:53.840 --> 11:57.840]  so we'll just give you a nice round interest rate, like around 6%.
[11:57.840 --> 11:59.840]  We'll just put that in there.
[11:59.840 --> 12:01.840]  But you're applying for a loan at 6%.
[12:01.840 --> 12:05.840]  Now, if the rates are going for 4 and you have an 820 credit score,
[12:05.840 --> 12:09.840]  what you're doing is you're setting yourself up for the wrong type of loan,
[12:09.840 --> 12:12.840]  the wrong product, and something that you're going to overpay for.
[12:12.840 --> 12:14.840]  And this happens all the time.
[12:14.840 --> 12:18.840]  There are incomplete 1003s, that's the 1003, that's the Federal Fannie Mae form
[12:18.840 --> 12:23.840]  for the application, the uniform application that most borrowers fill out.
[12:23.840 --> 12:27.840]  When that is left blank, there are all types of errors that happen,
[12:27.840 --> 12:31.840]  all types of errors that occur because most of our handwritten
[12:31.840 --> 12:33.840]  or many times they're taken on the computer,
[12:33.840 --> 12:36.840]  but those go to some centralized processing place.
[12:36.840 --> 12:41.840]  And those incomplete applications generate disclosures.
[12:41.840 --> 12:46.840]  Now, those are required disclosures, meaning that I take the information
[12:46.840 --> 12:50.840]  as Mr. Loan Officer, I've gotten it from you, Mr. Borrower, Mrs. Borrower,
[12:50.840 --> 12:53.840]  and that information goes into our processing center.
[12:53.840 --> 12:57.840]  Now, that data gets reported to the government on a monthly basis,
[12:57.840 --> 13:00.840]  and it's all based on demographics and regionalities
[13:00.840 --> 13:03.840]  and all the data that the government likes to collect and report back.
[13:03.840 --> 13:06.840]  So if that information is not correct, now they are not reporting it
[13:06.840 --> 13:08.840]  to the government correctly.
[13:08.840 --> 13:12.840]  They've also breached their own responsibility to you
[13:12.840 --> 13:16.840]  because loan officers serve two masters, okay?
[13:16.840 --> 13:20.840]  They're supposed to serve you as the borrower because they're supposed to act
[13:20.840 --> 13:23.840]  in your best interest because you're their client,
[13:23.840 --> 13:25.840]  and they're supposed to give you the best product at the best price
[13:25.840 --> 13:28.840]  for your financial profile and your situation, your house, your car,
[13:28.840 --> 13:29.840]  whatever it is.
[13:29.840 --> 13:32.840]  But at the same time, they also need to make money.
[13:32.840 --> 13:36.840]  And whether they're making it for the bank or they're making it for a mortgage broker
[13:36.840 --> 13:40.840]  or a car lender, whomever it is, they are doing that
[13:40.840 --> 13:43.840]  because they need to make money for themselves.
[13:43.840 --> 13:46.840]  So in doing so, they have their own self-interest at heart
[13:46.840 --> 13:51.840]  while trying to hold on to that responsibility of you, the borrower.
[13:51.840 --> 13:53.840]  So you can see where they're already conflicted.
[13:53.840 --> 13:56.840]  Before they even step in the door, before they even sit down at their chair,
[13:56.840 --> 13:58.840]  they're already conflicted because they're thinking,
[13:58.840 --> 14:01.840]  how much money am I going to make on doing this loan?
[14:01.840 --> 14:03.840]  So that's where the incomplete application comes in
[14:03.840 --> 14:08.840]  because your information that's on there drives the loan.
[14:08.840 --> 14:12.840]  Those documentations, excuse me, the disclosures that go out
[14:12.840 --> 14:16.840]  from your incomplete application are captured data that gets reported
[14:16.840 --> 14:20.840]  to the government, and it also goes back to you.
[14:20.840 --> 14:22.840]  So anytime you fill out a mortgage application,
[14:22.840 --> 14:26.840]  three days later you get this stack of disclosures in the mail
[14:26.840 --> 14:29.840]  with the same information regurgitated back to you,
[14:29.840 --> 14:31.840]  but it's generated from a computer.
[14:31.840 --> 14:33.840]  Everyone gets those and says, well, what is this?
[14:33.840 --> 14:35.840]  So you call up your loan officer, you say, well, what is this?
[14:35.840 --> 14:36.840]  Oh, don't worry about it.
[14:36.840 --> 14:39.840]  We send those out to everybody.
[14:39.840 --> 14:42.840]  Well, here's the key, and this is what everyone needs to really understand.
[14:42.840 --> 14:47.840]  Those disclosures are the key to looking for whether you got screwed
[14:47.840 --> 14:52.840]  on your loan or not because anytime your loan changes in any way,
[14:52.840 --> 14:56.840]  shape, or form, whether it's the loan amount, interest rate,
[14:56.840 --> 14:59.840]  it's the terminal, and you go from a 30-year to a 20-year,
[14:59.840 --> 15:03.840]  a 20-year to a 15, 15 to a 10, five-year arm, three-year loan.
[15:03.840 --> 15:05.840]  There's hundreds of products out there.
[15:05.840 --> 15:08.840]  Those disclosures are supposed to be redone,
[15:08.840 --> 15:11.840]  recaptured with the correct and true information,
[15:11.840 --> 15:15.840]  and sent out again because it's a federal regulation that you're
[15:15.840 --> 15:20.840]  disclosing information that you're giving for the application.
[15:20.840 --> 15:22.840]  They're disclosing it back to you.
[15:22.840 --> 15:24.840]  So remember, it's a two-way street.
[15:24.840 --> 15:27.840]  They're supposed to give you the information back stating exactly what
[15:27.840 --> 15:28.840]  you're getting.
[15:28.840 --> 15:30.840]  Well, I would say that...
[15:30.840 --> 15:38.840]  That's in 12 CFR 22619.
[15:38.840 --> 15:39.840]  Yes.
[15:39.840 --> 15:42.840]  I'm just happy to go look at that today.
[15:42.840 --> 15:46.840]  It's not because I'm so smart.
[15:46.840 --> 15:51.840]  I think you are, but I'll let you slide on that one.
[15:51.840 --> 15:52.840]  Thank you.
[15:52.840 --> 15:55.840]  The thing with these disclosures are no one...
[15:55.840 --> 15:57.840]  If they did that, and this is the reason,
[15:57.840 --> 16:00.840]  their justification for not doing it, the lenders, most of them,
[16:00.840 --> 16:05.840]  is all they would be doing is generating a mountain of paperwork.
[16:05.840 --> 16:08.840]  Now, some states have different disclosures,
[16:08.840 --> 16:12.840]  and the way the application works, the application process,
[16:12.840 --> 16:17.840]  as well as the lending process, every group is regulated on a state level
[16:17.840 --> 16:20.840]  unless you're an FDIC bank.
[16:20.840 --> 16:23.840]  So depending upon which law they want to pick
[16:23.840 --> 16:27.840]  and which governing body that's going to regulate them that day,
[16:27.840 --> 16:29.840]  or they're going to pick is going to regulate them that day,
[16:29.840 --> 16:31.840]  those are the laws that they pick with.
[16:31.840 --> 16:36.840]  So they operate in a kind of a gradient.
[16:36.840 --> 16:37.840]  Okay.
[16:37.840 --> 16:42.840]  This is wonderful.
[16:42.840 --> 16:43.840]  We're going to go to break.
[16:43.840 --> 16:47.840]  We'll pick back up on the other side with Nick Denning.
[16:47.840 --> 16:51.840]  This is Randy Kelton, Deborah Stevens, Eddie Craig,
[16:51.840 --> 16:52.840]  Rue La Radio.
[16:52.840 --> 17:01.840]  We'll be right back on the other side.
[17:01.840 --> 17:04.840]  Capital Coin and Bullion is your local source for rare coins,
[17:04.840 --> 17:08.840]  precious metals, and coin supplies in the Austin metro area.
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[17:39.840 --> 17:42.840]  You are welcome to stop in our shop during regular business hours
[17:42.840 --> 17:47.840]  or call 512-646-6440 with any questions.
[17:47.840 --> 17:52.840]  Ask for Chad and say you heard about us on Rue La Radio or 90.1 FM.
[17:52.840 --> 17:59.840]  That's Capital Coin and Bullion, 512-646-6440.
[17:59.840 --> 18:04.840]  Are you being harassed by debt collectors with phone calls, letters, or even losses?
[18:04.840 --> 18:08.840]  Stop debt collectors now with the Michael Mears proven method.
[18:08.840 --> 18:12.840]  Michael Mears has won six cases in federal court against debt collectors,
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[18:16.840 --> 18:20.840]  on how to win in court using federal civil rights statutes,
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[18:38.840 --> 18:40.840]  Personal consultation is available as well.
[18:40.840 --> 18:43.840]  For more information, please visit ruleoflawradio.com
[18:43.840 --> 18:48.840]  and click on the blue Michael Mears banner or email michaelmears at yahoo.com.
[18:48.840 --> 18:56.840]  That's ruleoflawradio.com or email m-i-c-h-a-e-l-m-i-r-r-a-s at yahoo.com
[18:56.840 --> 19:11.840]  to learn how to stop debt collectors now.
[19:11.840 --> 19:36.840]  Okay, this is Randy Kelton, David Stevens, Eddie Craig from Rule of Law Radio,
[19:36.840 --> 19:44.840]  and we forgot to start the show out with the 20th of January 2011.
[19:44.840 --> 19:49.840]  We're talking with Nick Denning about the loan process.
[19:49.840 --> 19:58.840]  You just mentioned state regulated except for FDIC.
[19:58.840 --> 20:01.840]  How do we tell the difference?
[20:01.840 --> 20:06.840]  Well, I think it's important to discuss the difference between what type of entities
[20:06.840 --> 20:10.840]  and that will help you decipher which one, how they're regulated.
[20:10.840 --> 20:14.840]  Banks are regulated on three different levels.
[20:14.840 --> 20:21.840]  When I say bank and lender, in most cases I'm talking about the same entity, not always,
[20:21.840 --> 20:24.840]  because a bank is either regulated by the FDIC,
[20:24.840 --> 20:31.840]  which means that the Office of the Comptroller of Currency, who reports to the Department of Treasury, regulates these banks.
[20:31.840 --> 20:35.840]  So if something goes bad and they steal $10 million of your money,
[20:35.840 --> 20:41.840]  you go to the OCC, the Office of the Comptroller of Currency, and then they go to the Department of Treasury.
[20:41.840 --> 20:45.840]  The FDIC ensures them they also report to the Department of Treasury.
[20:45.840 --> 20:52.840]  So at a federal level, banks, major banks, Citibank, Bank of America, Wells Fargo, JP Morgan Chase,
[20:52.840 --> 20:56.840]  all those are federally regulated banks, FDIC banks.
[20:56.840 --> 21:03.840]  Now if you go down to ABC Bank in Tulsa, Oklahoma, or XYZ down in Kansas City, Missouri,
[21:03.840 --> 21:06.840]  many of those banks are state regulated banks.
[21:06.840 --> 21:12.840]  It has to do with their size, but it also has to do with the type of regulations that they're subject to.
[21:12.840 --> 21:17.840]  Does it necessarily mean that they don't have funds that come through the Treasury?
[21:17.840 --> 21:20.840]  Does it necessarily mean that your funds aren't insured by the Treasury?
[21:20.840 --> 21:24.840]  It just means that their regulatory body is the state.
[21:24.840 --> 21:29.840]  Now the state has different rules than the FDIC does, than the OCC.
[21:29.840 --> 21:34.840]  Then you throw in things like credit unions, which have state regulations to them,
[21:34.840 --> 21:37.840]  and in some cases those cross state lines.
[21:37.840 --> 21:42.840]  So depending upon, you can reside in one state, the regulatory body for that credit union
[21:42.840 --> 21:47.840]  or that state chartered bank could be in another state, and then you've got some gray area again.
[21:47.840 --> 21:53.840]  Remember, gray area is where everybody, the lenders and everyone get away with all their sneakiness
[21:53.840 --> 21:56.840]  because if you don't understand what the regulations are,
[21:56.840 --> 22:01.840]  you can't hold them to those regulations that they're required to act under.
[22:01.840 --> 22:06.840]  So when you're looking at an institution, it's fairly simple.
[22:06.840 --> 22:09.840]  If they are an FDIC insured bank, they're going to be very proud of it.
[22:09.840 --> 22:12.840]  It'll be on their website. It'll be all over their information.
[22:12.840 --> 22:15.840]  It'll be in their application process.
[22:15.840 --> 22:18.840]  They will disclose it, not because they're proud of it.
[22:18.840 --> 22:21.840]  In many cases they are, but they have to. That's a requirement.
[22:21.840 --> 22:25.840]  If they're a state chartered bank, they also have to disclose that.
[22:25.840 --> 22:30.840]  Now sometimes it's in the micro-print and the fly-fond stuff at the bottom of their website
[22:30.840 --> 22:34.840]  or their documentation, but they have to disclose it.
[22:34.840 --> 22:39.840]  So that determines how the application process works, how the lending process works.
[22:39.840 --> 22:44.840]  It also determines who you go after during that process.
[22:44.840 --> 22:49.840]  So if you're in Oklahoma, you would go to the banking board for that state,
[22:49.840 --> 22:51.840]  for a state chartered bank.
[22:51.840 --> 22:58.840]  If it's a city bank out of Oklahoma, you would still go through Oklahoma if you reside there,
[22:58.840 --> 23:02.840]  but you could go to FDIC, you could go to the Department of Treasury, OCC,
[23:02.840 --> 23:08.840]  for that type of process for any issues regarding regulation.
[23:08.840 --> 23:10.840]  But that trickles all the way down.
[23:10.840 --> 23:14.840]  And the reason it trickles down, because if I'm Mr. Loan Officer
[23:14.840 --> 23:20.840]  and the borrower comes in and wants a mortgage, they say, great, I want my mortgage.
[23:20.840 --> 23:24.840]  If I am an agent of the bank, meaning that I work for the bank,
[23:24.840 --> 23:27.840]  I work for one of these large banks or even a small state chartered bank,
[23:27.840 --> 23:30.840]  I am protected by that bank.
[23:30.840 --> 23:32.840]  I do not need to be licensed.
[23:32.840 --> 23:36.840]  I do not need to be regulated other than what the bank protects me.
[23:36.840 --> 23:40.840]  Now, many states have enacted a mortgage licensing policy,
[23:40.840 --> 23:45.840]  and just recently there's been a national test that has been enacted.
[23:45.840 --> 23:50.840]  But most of the loans that are fraudulent or have errors
[23:50.840 --> 23:56.840]  or have all these deficiencies in them started prior to that type of licensing
[23:56.840 --> 23:58.840]  and that type of oversight.
[23:58.840 --> 24:02.840]  So if I'm Mr. Loan Officer and I act and I'm part of the bank,
[24:02.840 --> 24:06.840]  whether I'm a teller or I'm someone who's taking a loan application,
[24:06.840 --> 24:09.840]  I'm an underwriter, I'm a funder who funds the loans,
[24:09.840 --> 24:11.840]  puts the money out to do the title companies,
[24:11.840 --> 24:16.840]  we're all the same because we all act under the umbrella of that bank,
[24:16.840 --> 24:18.840]  and the bank is responsible for our actions.
[24:18.840 --> 24:20.840]  It's kind of like the bank is the captain of the ship
[24:20.840 --> 24:23.840]  and we're all on the ship together, and we're all responsible,
[24:23.840 --> 24:26.840]  and the captain of the ship is responsible for what we do.
[24:26.840 --> 24:30.840]  A broker, on the other hand, is many of these companies where you go
[24:30.840 --> 24:33.840]  on the yellow pages and you'll see hundreds of them,
[24:33.840 --> 24:35.840]  and they've got all kinds of creative names
[24:35.840 --> 24:38.840]  and all these interesting ads and all these products,
[24:38.840 --> 24:40.840]  and they tell you they're going to give you a better rate.
[24:40.840 --> 24:45.840]  Those are federally, I'm sorry, state-regulated entities
[24:45.840 --> 24:51.840]  that they originate loans and they either sell them to the banks
[24:51.840 --> 24:56.840]  or they originate them for the banks, but they're not agents of the bank.
[24:56.840 --> 25:01.840]  That means that they work for themselves, they work for their own entity,
[25:01.840 --> 25:03.840]  they have no money of their own, but the bank says,
[25:03.840 --> 25:07.840]  if you do this loan to all the conditions that we wanted,
[25:07.840 --> 25:11.840]  we'll put the money on the table and we'll take that loan off your hands.
[25:11.840 --> 25:14.840]  Now, you can see where serving two masters
[25:14.840 --> 25:17.840]  becomes very precarious in that situation
[25:17.840 --> 25:21.840]  because you have to make money to be able to originate that loan,
[25:21.840 --> 25:26.840]  but you also have to serve the fiduciary responsibility of your borrower,
[25:26.840 --> 25:28.840]  of the person who's getting the loan.
[25:28.840 --> 25:30.840]  How does that happen?
[25:30.840 --> 25:35.840]  Well, rate is one of them, product is another, term,
[25:35.840 --> 25:38.840]  there's all the conditions, all the things that cost you money
[25:38.840 --> 25:42.840]  are the things that make the loan officer money,
[25:42.840 --> 25:44.840]  and that's important for everyone to understand.
[25:44.840 --> 25:48.840]  If I take a loan and I give it to someone at 1%,
[25:48.840 --> 25:50.840]  the bank doesn't make any money on that,
[25:50.840 --> 25:53.840]  they don't really want that loan, but if I write the same loan at 10%,
[25:53.840 --> 25:55.840]  they're going to clamor for it.
[25:55.840 --> 25:57.840]  As a matter of fact, I'll have four different banks I can take it to
[25:57.840 --> 26:00.840]  who are going to pay me for that loan.
[26:00.840 --> 26:05.840]  Now, does that mean a 1% loan is better for my borrower than a 10% loan?
[26:05.840 --> 26:10.840]  In most cases, it is, but is that the right loan for that borrower
[26:10.840 --> 26:14.840]  based on their financial profile and the terms and conditions of the property
[26:14.840 --> 26:18.840]  of the transaction itself with the realtor, whether it's a purchase, whatever,
[26:18.840 --> 26:20.840]  that's what they're supposed to serve the other master on.
[26:20.840 --> 26:23.840]  They're supposed to serve you, and they're supposed to serve you first.
[26:23.840 --> 26:26.840]  And what's happened in the last five to seven years in this industry
[26:26.840 --> 26:28.840]  is that it hasn't.
[26:28.840 --> 26:32.840]  They've put themselves out in front above everyone else
[26:32.840 --> 26:34.840]  because they want to make a buck.
[26:34.840 --> 26:36.840]  Not only were they making a buck, they're making a lot of bucks.
[26:36.840 --> 26:39.840]  They're making mountains of money doing this.
[26:39.840 --> 26:44.840]  And again, I'm part of this, I'm saying this because I saw it with my own eyes,
[26:44.840 --> 26:47.840]  I know this is going on, and there were more times where they would put themselves
[26:47.840 --> 26:52.840]  first in front of the responsibility of the borrower,
[26:52.840 --> 26:55.840]  of what the borrower's best interests are.
[26:55.840 --> 26:59.840]  So that's why the application and all the terms and redisclosures
[26:59.840 --> 27:04.840]  and all the terms of that, and it's a rate, term, product type,
[27:04.840 --> 27:07.840]  it is whether it's a full documentation loan, limited doc,
[27:07.840 --> 27:09.840]  which would be like if you gave 12 months of bank statements
[27:09.840 --> 27:14.840]  or 24 months of bank statements, stated income, dirty stated income loans.
[27:14.840 --> 27:16.840]  Everyone knows about those.
[27:16.840 --> 27:21.840]  These are the items that change how much the bank is willing to pay
[27:21.840 --> 27:23.840]  Mr. Loan Officer or Mr. Broker.
[27:23.840 --> 27:28.840]  Now, the same situation exists for the person who's captive with the bank.
[27:28.840 --> 27:32.840]  The difference is they get paid less because they're sitting there,
[27:32.840 --> 27:34.840]  they get a salary, they're getting the benefits,
[27:34.840 --> 27:37.840]  they're getting all the employee benefits of working for the bank
[27:37.840 --> 27:39.840]  and being on that ship with them.
[27:39.840 --> 27:43.840]  As an independent contractor, as a broker, they get paid significantly more,
[27:43.840 --> 27:45.840]  but of course they're out there without a net.
[27:45.840 --> 27:48.840]  So it's very important that everyone understands that the broker
[27:48.840 --> 27:51.840]  and the lender are two separate entities,
[27:51.840 --> 27:55.840]  and the brokers are the ones that really started getting out of hand
[27:55.840 --> 27:58.840]  with all the nonsense and all the really bad and evil things
[27:58.840 --> 28:00.840]  that have happened with these loans.
[28:00.840 --> 28:02.840]  It started, in most cases, with the brokers,
[28:02.840 --> 28:05.840]  and then the lenders knew about it and they turned a blind eye
[28:05.840 --> 28:08.840]  because they wanted more loans at higher rates
[28:08.840 --> 28:10.840]  so they could package them up in these mortgage-backed securities
[28:10.840 --> 28:12.840]  and sell them off and fractionalize them
[28:12.840 --> 28:16.840]  and make money on top of money on top of money on top of money.
[28:16.840 --> 28:19.840]  So once everyone understands that, you understand that,
[28:19.840 --> 28:24.840]  wow, okay, my application, I gave it to someone who doesn't really work for the bank
[28:24.840 --> 28:28.840]  if it went to a broker, and that information could have gone anywhere.
[28:28.840 --> 28:32.840]  The brokers will take that information and they'll send it out to five different companies
[28:32.840 --> 28:38.840]  to try to get the best rate that they think they can that makes them the most money.
[28:38.840 --> 28:42.840]  Now, if I took that application at 6 percent and I came back and said to you,
[28:42.840 --> 28:45.840]  you know, your rate and the product isn't available,
[28:45.840 --> 28:47.840]  I'm going to give it to you at 7.5 percent,
[28:47.840 --> 28:49.840]  you should have got a new set of disclosures.
[28:49.840 --> 28:53.840]  I guarantee 99.8 times you do not.
[28:53.840 --> 28:55.840]  That in itself is a violation.
[28:55.840 --> 28:59.840]  It's also non-disclosure of change of terms,
[28:59.840 --> 29:01.840]  which is a violation of their own policy.
[29:01.840 --> 29:05.840]  So not only are they doing things that are against what they're supposed to be doing,
[29:05.840 --> 29:11.840]  but policies unto themselves, they're breaking in most cases out of just sheer laziness pretty much.
[29:11.840 --> 29:14.840]  I mean, they're just not redisclosing because they think it just costs too much money
[29:14.840 --> 29:16.840]  to keep generating these documents.
[29:16.840 --> 29:21.840]  So that's important when you're looking at the documentation process.
[29:21.840 --> 29:23.840]  You're looking at the types of loans.
[29:23.840 --> 29:27.840]  You really, in most cases, most borrowers do not know who's sitting in front of them
[29:27.840 --> 29:30.840]  and what their responsibility is.
[29:30.840 --> 29:32.840]  So that's where it gets a little sneaky.
[29:32.840 --> 29:35.840]  We're about to go to break, and when we come back,
[29:35.840 --> 29:38.840]  speaking of types of loans,
[29:38.840 --> 29:44.840]  I would like to go into the different types of loans that are out there
[29:44.840 --> 29:51.840]  and how they're used to extract more profit for us, the borrowers.
[29:51.840 --> 29:52.840]  Great.
[29:52.840 --> 29:55.840]  Okay, this is Randy Kelton, Deborah Stevens, and Craig,
[29:55.840 --> 29:59.840]  Real Love Radio, we'll be right back.
[29:59.840 --> 30:00.840]  I lost my son.
[30:00.840 --> 30:01.840]  My nephew.
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[30:07.840 --> 30:11.840]  World Trade Center 7, a 47-story skyscraper, was not hit by a plane.
[30:11.840 --> 30:15.840]  Although the official explanation is that fire brought down Building 7,
[30:15.840 --> 30:19.840]  over 1,200 architects and engineers have looked into the evidence
[30:19.840 --> 30:21.840]  and believe there is more to the story.
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[30:25.840 --> 30:26.840]  Go to buildingwhat.org.
[30:26.840 --> 30:30.840]  Why it fell, why it matters, and what you can do.
[30:30.840 --> 30:33.840]  Getting hitched may be one of the best moves a man can make,
[30:33.840 --> 30:36.840]  according to new research about the health benefits of marriage.
[30:36.840 --> 30:39.840]  I'm Dr. Catherine Albrecht, and I'll be back in just a moment
[30:39.840 --> 30:42.840]  to tell you why men should be grateful for their wives.
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[31:24.840 --> 31:25.840]  Why is that?
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[31:31.840 --> 31:33.840]  Married men are better cared for when they're sick,
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[31:44.840 --> 31:48.840]  men, you should be grateful for that proverbial ball and chain.
[31:48.840 --> 31:50.840]  I'm Dr. Catherine Albrecht.
[31:50.840 --> 31:55.840]  For more news and information at CatherineAlbrecht.com.
[32:20.840 --> 32:26.840]  Okay.
[32:26.840 --> 32:28.840]  Randy Kelton, WC, Rene Craig.
[32:28.840 --> 32:31.840]  This is our radio.
[32:31.840 --> 32:35.840]  We were talking on the break about the different types of loans
[32:35.840 --> 32:43.840]  that Nick, you were going to start talking about the surprise loans.
[32:43.840 --> 32:45.840]  Absolutely.
[32:45.840 --> 32:47.840]  Actually, what I'd like to show everyone
[32:47.840 --> 32:50.840]  and illustrate for everyone is the different types of loans
[32:50.840 --> 32:53.840]  and a general sense of what are available.
[32:53.840 --> 32:56.840]  There are specific categories of loans,
[32:56.840 --> 32:58.840]  and then there's products under those loans.
[32:58.840 --> 33:00.840]  I want to make sure everyone understands that.
[33:00.840 --> 33:02.840]  There's what are called conforming loans,
[33:02.840 --> 33:06.840]  and the conforming loans are ones that conform to Fannie Mae
[33:06.840 --> 33:08.840]  or Freddie Mac, everyone knows who they are,
[33:08.840 --> 33:11.840]  what their terms are, and what they will insure,
[33:11.840 --> 33:13.840]  and what they will buy.
[33:13.840 --> 33:17.840]  Those are usually borrowers that have excellent credit,
[33:17.840 --> 33:21.840]  long-term stability, they have long time on the job,
[33:21.840 --> 33:23.840]  they have reserves available.
[33:23.840 --> 33:26.840]  What you would consider your A borrower,
[33:26.840 --> 33:29.840]  your perfect borrower in those cases.
[33:29.840 --> 33:31.840]  There's what's called Alt-A borrowers,
[33:31.840 --> 33:34.840]  and Alt-A was an alternative to the A borrower
[33:34.840 --> 33:36.840]  kind of by the moniker itself,
[33:36.840 --> 33:39.840]  and that is someone who doesn't quite meet the exact criteria
[33:39.840 --> 33:43.840]  of being conforming, but at the same time,
[33:43.840 --> 33:47.840]  they're still better than your bad case scenario loans.
[33:47.840 --> 33:51.840]  So you have a just missed bracket that's in there.
[33:51.840 --> 33:53.840]  Then you fall into subprime loans,
[33:53.840 --> 33:55.840]  and subprime is exactly that, they're subprime,
[33:55.840 --> 33:59.840]  they're non-conforming, they're below your Alt-A,
[33:59.840 --> 34:01.840]  and they're really kind of everything else.
[34:01.840 --> 34:03.840]  Now, the thing about subprime loans,
[34:03.840 --> 34:05.840]  and everyone has heard of these,
[34:05.840 --> 34:07.840]  and they've heard how horrible they are,
[34:07.840 --> 34:10.840]  and what a bad thing they are for the economy,
[34:10.840 --> 34:12.840]  and how it's crushed the housing market.
[34:12.840 --> 34:15.840]  In most cases, and by all studies,
[34:15.840 --> 34:19.840]  less than between 2% and 5%, depending on who you talk to,
[34:19.840 --> 34:21.840]  of all the loans that have been ever originated
[34:21.840 --> 34:24.840]  are actually in that subprime bucket.
[34:24.840 --> 34:27.840]  The problem is that a lot of them, and most of them,
[34:27.840 --> 34:31.840]  are so horrendous that those loans have such a,
[34:31.840 --> 34:34.840]  their default rate is anywhere from 2 to 10 times,
[34:34.840 --> 34:36.840]  50 times, depending upon the product,
[34:36.840 --> 34:40.840]  greater than all the other types combined.
[34:40.840 --> 34:44.840]  Yes, but aren't they enough?
[34:44.840 --> 34:49.840]  I mean, most of the borrowers in this very large country
[34:49.840 --> 34:53.840]  are people who have already owned a home,
[34:53.840 --> 34:57.840]  they have a lot of equity, they have time and experience,
[34:57.840 --> 35:01.840]  and they've built up resources,
[35:01.840 --> 35:04.840]  they move from one home to another.
[35:04.840 --> 35:06.840]  Absolutely, that's correct.
[35:06.840 --> 35:12.840]  And the ones that are in trouble are the people entering into the market,
[35:12.840 --> 35:18.840]  or those people who are convinced to sell a home
[35:18.840 --> 35:22.840]  they could afford and buy one they couldn't afford.
[35:22.840 --> 35:27.840]  Oh, that's a small percentage of the market overall.
[35:27.840 --> 35:30.840]  The people that are having this happen to them
[35:30.840 --> 35:36.840]  are all kind of in the same social stratus.
[35:36.840 --> 35:41.840]  Randy, I would say that my experience is that it actually transcends
[35:41.840 --> 35:44.840]  all demographics and all geographics.
[35:44.840 --> 35:48.840]  And the reason is that products, while some products,
[35:48.840 --> 35:50.840]  remember we're talking about loan types,
[35:50.840 --> 35:55.840]  some products to themselves are really designed for failure.
[35:55.840 --> 35:59.840]  And these are types of products that are negative amortization loans.
[35:59.840 --> 36:03.840]  They are option arms where you start off your first month and you're at 1 percent,
[36:03.840 --> 36:06.840]  and then the second month it spikes up to 6 or 7 percent.
[36:06.840 --> 36:09.840]  Those loans really are designed to fail,
[36:09.840 --> 36:12.840]  and they were never designed to be long-term products.
[36:12.840 --> 36:14.840]  But they were sold as long-term products.
[36:14.840 --> 36:19.840]  Again, remember what we said, the difference between the responsibility of the loan officer,
[36:19.840 --> 36:22.840]  the person who's telling you what's the best product for you,
[36:22.840 --> 36:24.840]  because you're not an expert, none of us are experts,
[36:24.840 --> 36:27.840]  when it comes to these products and we're sitting down as a borrower,
[36:27.840 --> 36:31.840]  we take the advice of the person who's a trusted professional
[36:31.840 --> 36:33.840]  that should be telling us what's the best product.
[36:33.840 --> 36:40.840]  What happens is the transcension of these products and these loans
[36:40.840 --> 36:46.840]  are affected on every level because while many individuals got the loan product
[36:46.840 --> 36:50.840]  they should have within reason and didn't have any issues,
[36:50.840 --> 36:52.840]  if they lose their job, they lose their job.
[36:52.840 --> 36:53.840]  It doesn't matter what type of loan you have.
[36:53.840 --> 36:56.840]  If you can't afford the loan, you can't afford the loan.
[36:56.840 --> 36:58.840]  Some people are more conservative.
[36:58.840 --> 36:59.840]  They put 20 percent down.
[36:59.840 --> 37:02.840]  They have a smaller mortgage that they can handle.
[37:02.840 --> 37:06.840]  So in your instance where you said they sold a house that they could afford
[37:06.840 --> 37:10.840]  and bought a McMansion they couldn't because someone showed them
[37:10.840 --> 37:15.840]  that there was a methodology, a systemic methodology to do that,
[37:15.840 --> 37:19.840]  then they would go from a $250,000 house to an $800,000 house.
[37:19.840 --> 37:22.840]  And then, of course, you could miss two paychecks
[37:22.840 --> 37:24.840]  and you wouldn't be able to afford that house.
[37:24.840 --> 37:28.840]  I agree with you on many levels with that.
[37:28.840 --> 37:31.840]  It's difficult to determine whether that happened
[37:31.840 --> 37:34.840]  because you have to look at the application process
[37:34.840 --> 37:38.840]  and you have to look at the static of where they started and where they ended up
[37:38.840 --> 37:40.840]  and what happened between those two points.
[37:40.840 --> 37:44.840]  And the devil is always in the details, absolutely in the details.
[37:44.840 --> 37:54.840]  So you're saying that essentially this 2 percent really occurs across the board?
[37:54.840 --> 37:58.840]  In essence, yes, in essence.
[37:58.840 --> 37:59.840]  Absolutely.
[37:59.840 --> 38:04.840]  Well, as it is now, there seems to be other factors.
[38:04.840 --> 38:09.840]  Rather, this 2 percent caused the cascading failures
[38:09.840 --> 38:13.840]  or other factors in the economy caused the cascading failures.
[38:13.840 --> 38:16.840]  It's certainly beginning to cascade.
[38:16.840 --> 38:23.840]  And it seems to be moving to most every area of the loan market
[38:23.840 --> 38:31.840]  because Las Vegas is looking at 50 percent of all of the loans
[38:31.840 --> 38:35.840]  foreclosing in the next year and a half to two years.
[38:35.840 --> 38:36.840]  Absolutely.
[38:36.840 --> 38:38.840]  I think that's already happened in Michigan.
[38:38.840 --> 38:43.840]  California is next, Arizona, New Mexico is climbing up.
[38:43.840 --> 38:47.840]  This thing is really beginning to cascade right now.
[38:47.840 --> 38:48.840]  Absolutely.
[38:48.840 --> 38:52.840]  See, subprime became such a hot button right when this happened
[38:52.840 --> 38:55.840]  because the media needed a scapegoat.
[38:55.840 --> 39:00.840]  And they needed a scapegoat that it could be relatable and easy for people to understand.
[39:00.840 --> 39:03.840]  Well, not all subprime loans went bad.
[39:03.840 --> 39:05.840]  Not all of them were bad.
[39:05.840 --> 39:12.840]  Some of them were just, you know, very identifiable products that met a certain need,
[39:12.840 --> 39:18.840]  but it didn't fit within the general logic of lending of the last 30 or 40 years.
[39:18.840 --> 39:21.840]  So typically you'd walk into a bank and you'd say, I'm 20 percent down.
[39:21.840 --> 39:23.840]  I've been on my job for five years.
[39:23.840 --> 39:24.840]  I've saved up this money.
[39:24.840 --> 39:25.840]  I have reserves.
[39:25.840 --> 39:26.840]  And they give you a loan.
[39:26.840 --> 39:29.840]  You walk in and you say, I've been self-employed for six months.
[39:29.840 --> 39:33.840]  I've just made, you know, half a million dollars because new venture.
[39:33.840 --> 39:34.840]  And I need a loan.
[39:34.840 --> 39:37.840]  And 20 years ago, they'd laugh you out the door.
[39:37.840 --> 39:39.840]  Now they said, we have this different product for you.
[39:39.840 --> 39:40.840]  It's not conforming.
[39:40.840 --> 39:42.840]  It's not all day.
[39:42.840 --> 39:44.840]  They lump it in with a subprime loan.
[39:44.840 --> 39:49.840]  And then they give that loan to a borrower, whether you agree with it or not.
[39:49.840 --> 39:52.840]  At the time, it was a product that met a need.
[39:52.840 --> 39:56.840]  When you throw it out to the media and say, well, see, of course that loan went bad.
[39:56.840 --> 39:58.840]  He only had six months' worth of income.
[39:58.840 --> 39:59.840]  The media jumped all over it.
[39:59.840 --> 40:06.840]  And so that 2 percent became, you know, the ugly duckling that no one wanted to talk about
[40:06.840 --> 40:09.840]  that they had to put out in front to say, well, this is what it is.
[40:09.840 --> 40:14.840]  Because if not, they would say, it's actually economic demise that we have in this country
[40:14.840 --> 40:18.840]  for losing jobs and everything else that was going on at that time about, you know,
[40:18.840 --> 40:19.840]  two and a half, three years ago.
[40:19.840 --> 40:21.840]  And they couldn't do that because then the sky has fallen.
[40:21.840 --> 40:25.840]  So it's easier to put the ugly duckling out there than scream around Chicken Little
[40:25.840 --> 40:26.840]  and the sky has fallen.
[40:26.840 --> 40:30.840]  So that's the reason subprime became the forefront of it.
[40:30.840 --> 40:33.840]  And let's face it, it only affected 2 percent of loans out there.
[40:33.840 --> 40:36.840]  So a very small cross-section of people are screaming around going,
[40:36.840 --> 40:38.840]  well, wait a minute, I've got one of those loans, but they're the minority.
[40:38.840 --> 40:45.840]  So financially and systemically, it was designed that it didn't make that big of a difference
[40:45.840 --> 40:47.840]  because 98 percent of the rest of the people said, well,
[40:47.840 --> 40:50.840]  of course they shouldn't have got those loans.
[40:50.840 --> 40:55.840]  But it's important that these type of products, no matter what the loan is,
[40:55.840 --> 41:03.840]  it's important that people understand that every type of scheming as part of this happens.
[41:03.840 --> 41:08.840]  And it comes from products, products from loans and rates, bait and switch,
[41:08.840 --> 41:13.840]  and that bait and switch can be rate, it can be fees, it can be service providers.
[41:13.840 --> 41:19.840]  I think people forget that everybody that has anything to do with your loan
[41:19.840 --> 41:21.840]  is doing it because they get paid.
[41:21.840 --> 41:23.840]  They need money.
[41:23.840 --> 41:26.840]  They're doing this, they stand around there waiting with their handout
[41:26.840 --> 41:29.840]  at the closing to say, I want to get paid.
[41:29.840 --> 41:33.840]  Well, that's very important to know because you're paying them
[41:33.840 --> 41:36.840]  and you're paying them a significant amount of money.
[41:36.840 --> 41:41.840]  And most of the time, you don't get a choice on who your service providers are.
[41:41.840 --> 41:45.840]  In the real world, you get to go out and you get to pick your dry cleaner,
[41:45.840 --> 41:48.840]  you get to pick your automotive mechanic, you get to pick your grocery store.
[41:48.840 --> 41:52.840]  But when you go to your loan officer, you go to your bank, they pick your appraiser,
[41:52.840 --> 41:56.840]  they pick your property inspector, they pick your title company.
[41:56.840 --> 41:58.840]  They don't pick your realtor, but in some cases,
[41:58.840 --> 42:01.840]  they encourage different realtors that you use.
[42:01.840 --> 42:06.840]  Now, what they forget to tell you in many cases is they have what are called CBAs,
[42:06.840 --> 42:13.840]  controlled business arrangements, whereby they get paid for using specific providers.
[42:13.840 --> 42:19.840]  Well, when you have a monetary incentive to use a specific provider, guess what happens?
[42:19.840 --> 42:25.840]  It also creates some modicum of control because guess who's signing the check?
[42:25.840 --> 42:30.840]  The same people that are controlling your loan and what product and what rate.
[42:30.840 --> 42:35.840]  What duty do they have to disclose these CBAs?
[42:35.840 --> 42:38.840]  They're actually done state by state.
[42:38.840 --> 42:46.840]  In some states, they should be, from a moralistic standpoint, they should be disclosing a fund.
[42:46.840 --> 42:52.840]  In most states, there is some type of regulation that is on the books that requires them to say,
[42:52.840 --> 42:56.840]  we have this relationship, and most of them are contractual.
[42:56.840 --> 42:57.840]  Not all.
[42:57.840 --> 43:02.840]  Just because they have a favorite appraiser or they know some gal at the title company
[43:02.840 --> 43:06.840]  or there's a property inspector who happens to be the largest one in the state,
[43:06.840 --> 43:11.840]  they aren't always necessarily contractual business arrangements.
[43:11.840 --> 43:17.840]  The fact that they would give them 80 or 90% of their business has the same effect over time.
[43:17.840 --> 43:22.840]  I'm going to explain to you a perfect example of how that happens.
[43:22.840 --> 43:26.840]  You take your loan application, you put it in there, go through the process,
[43:26.840 --> 43:29.840]  and you think your house is worth $300,000.
[43:29.840 --> 43:35.840]  Your loan is predicated on the fact that you need to have that value.
[43:35.840 --> 43:39.840]  I think we need to probably come back to this because this is a little bit longer.
[43:39.840 --> 43:42.840]  Okay, this is Sheriff Treck. I was looking for a breaking point.
[43:42.840 --> 43:47.840]  Okay, when we come back, we will continue with Ms. Lyne.
[43:47.840 --> 43:53.840]  This is Brandy Kelter, Deborah Stevens, Eddie Craig, Lula La Radio, Nick Dinning.
[43:53.840 --> 43:59.840]  And after this next segment, we'll be opening the phones, 512-646-1984.
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[46:18.840 --> 46:30.840]  Okay, this is Randy Kelton, Deborah Stevens, Eddie Craig, Rue de la Radio.
[46:30.840 --> 46:33.840]  I jumped in there quick because we're getting so much information.
[46:33.840 --> 46:35.840]  I'm getting excited here.
[46:35.840 --> 46:43.840]  Okay, we were talking about CBAs, controlled business arrangements,
[46:43.840 --> 46:46.840]  and how they work against the borrower.
[46:46.840 --> 46:51.840]  Now, after this segment, we're going to open up the phone lines now
[46:51.840 --> 46:52.840]  so you can start calling in.
[46:52.840 --> 46:56.840]  We'll start taking your calls after the top-of-the-hour breaks.
[46:56.840 --> 47:01.840]  The call-in number is 512-646-1984.
[47:01.840 --> 47:04.840]  Okay, Nick, you're on.
[47:04.840 --> 47:05.840]  Excellent.
[47:05.840 --> 47:11.840]  What I was saying before the break, Randy, was that say that you have a loan application
[47:11.840 --> 47:17.840]  and your loan is predicated on the value of your home being $300,000, for example.
[47:17.840 --> 47:22.840]  Now, what I would do if I was Mr. Loan Officer, whether I work for a bank or a broker,
[47:22.840 --> 47:28.840]  is the loan would go through the process and I would have a preferred appraiser list.
[47:28.840 --> 47:33.840]  Now, in many cases, these are contractual business arrangements,
[47:33.840 --> 47:37.840]  controlled business arrangements that they have to work only with specific companies.
[47:37.840 --> 47:42.840]  Now, the reason for those, they would tell you they're anything from they have top qualities,
[47:42.840 --> 47:46.840]  that their turn time are great, their documentation is perfect, whatever.
[47:46.840 --> 47:51.840]  In reality, in most cases, it's because they can give them the number they need.
[47:51.840 --> 47:55.840]  Now, if you have two identical houses that sit one right next to the other,
[47:55.840 --> 47:58.840]  they're built by the same builder that have all the same amenities,
[47:58.840 --> 48:02.840]  have all the same floor plans and elevations and garages and everything,
[48:02.840 --> 48:05.840]  you would assume that in most cases they're worth the same.
[48:05.840 --> 48:09.840]  The problem is that if the house across the street is the same house,
[48:09.840 --> 48:13.840]  it's a foreclosure or say someone got transferred and they moved
[48:13.840 --> 48:16.840]  and they had to sell the house fast and they sold it for $250,000,
[48:16.840 --> 48:19.840]  that actually brings the market value of the homes,
[48:19.840 --> 48:25.840]  those two same homes across the street down because it's only worth what someone's willing to pay for it.
[48:25.840 --> 48:31.840]  So as a lender, it's their idea to determine what is the true market value
[48:31.840 --> 48:34.840]  because that's what they base their loan upon.
[48:34.840 --> 48:38.840]  If I'm only going to do 80% loan and the value is $300,000,
[48:38.840 --> 48:40.840]  then I'm only going to do 80% of $300,000.
[48:40.840 --> 48:45.840]  Well, if my payoff on my first loan and the credit card I'm going to roll into it
[48:45.840 --> 48:49.840]  and the car loan only equate, they come up to $250,000,
[48:49.840 --> 48:52.840]  well then I don't have a loan, not if it's only worth $275,000,
[48:52.840 --> 48:55.840]  or if it's worth $250,000, it certainly doesn't work.
[48:55.840 --> 48:56.840]  So here's where it gets good.
[48:56.840 --> 49:00.840]  Listen, they take the appraiser and they say, I really need $300,000.
[49:00.840 --> 49:04.840]  Can you find me $300,000 on this? And they do it.
[49:04.840 --> 49:05.840]  They give them this.
[49:05.840 --> 49:11.840]  They say, well, we'll take a comparable sale and they'll go to the next neighborhood,
[49:11.840 --> 49:15.840]  or they'll go to a house that was maybe six or eight months ago that sold for $320,000.
[49:15.840 --> 49:18.840]  They'll say, well, it's the same house, but it was six months ago,
[49:18.840 --> 49:23.840]  or they'll find a house that is different enough but close enough that they kind of,
[49:23.840 --> 49:27.840]  that's the gray area again, they fudge the numbers on it and they make it work.
[49:27.840 --> 49:28.840]  Why do they make it work?
[49:28.840 --> 49:34.840]  They make it work because they want more business from the lender, from the broker, from the bank.
[49:34.840 --> 49:39.840]  This is where the controlled business arrangement, it helps them, but it works against you.
[49:39.840 --> 49:43.840]  There are a lot of people that have loans right now because of inflated values
[49:43.840 --> 49:47.840]  that were given by licensed appraisers, the state licensed every appraiser,
[49:47.840 --> 49:51.840]  given by licensed appraisers only to serve what master?
[49:51.840 --> 49:55.840]  The lender and the broker and the loan officer, anyone.
[49:55.840 --> 50:03.840]  And a point here, the licensed professionals working under the consumer protection laws
[50:03.840 --> 50:11.840]  were intended to protect the unsophisticated lender from getting into a loan,
[50:11.840 --> 50:17.840]  the tribulations of which was beyond his experience.
[50:17.840 --> 50:24.840]  Don't you mean the naive borrower, not the naive lender?
[50:24.840 --> 50:29.840]  Did I say the lender? I always mix those up, the naive borrower.
[50:29.840 --> 50:32.840]  It's like our traditions.
[50:32.840 --> 50:39.840]  Traditions were put in place to keep us from having problems that weren't apparent on the surface,
[50:39.840 --> 50:45.840]  to keep us from doing things where problems would sneak up on us later on.
[50:45.840 --> 50:49.840]  That's what all of these consumer protection laws were put in place for.
[50:49.840 --> 50:55.840]  That's why all of these individuals were licensed, to protect the buyer from hazards
[50:55.840 --> 50:58.840]  that they couldn't necessarily anticipate.
[50:58.840 --> 51:03.840]  And in not doing that, they breach their fiduciary duty.
[51:03.840 --> 51:04.840]  Is that right, Nick?
[51:04.840 --> 51:06.840]  Absolutely, absolutely.
[51:06.840 --> 51:10.840]  And it happens with every service provider, every service provider.
[51:10.840 --> 51:14.840]  It's not just the appraisers. It's not just the property inspectors.
[51:14.840 --> 51:17.840]  It's not just the realtors. It's not just the title companies.
[51:17.840 --> 51:22.840]  It's the collective of everyone that's got their hand out looking to get paid off of your transaction
[51:22.840 --> 51:26.840]  with your money that comes out of the loan every time.
[51:26.840 --> 51:33.840]  Credit bureaus, the credit bureaus themselves are the ones that are out there looking for the dollars
[51:33.840 --> 51:36.840]  for you to pay them so they can give you your own score.
[51:36.840 --> 51:43.840]  And that's something that the whole loan is predicated on, is your credit bureau and that score.
[51:43.840 --> 51:47.840]  You have to pay them, and every one of them has their incentive to do that.
[51:47.840 --> 51:51.840]  Now you say, well, they're a service provider and they provide a service, so they should get paid.
[51:51.840 --> 51:54.840]  Sure, but you don't get a choice on which credit bureau you get to pick.
[51:54.840 --> 51:58.840]  You don't get a choice on which appraiser that you get to use.
[51:58.840 --> 52:01.840]  You don't get a choice to use what title company you use.
[52:01.840 --> 52:05.840]  I mean, you can look at three different loans done on the same block for three different borrowers,
[52:05.840 --> 52:08.840]  and I guarantee you there's probably two or three different title companies in there,
[52:08.840 --> 52:13.840]  and the fees would range anywhere 30, 40, 50 percent different between the three loans,
[52:13.840 --> 52:15.840]  and you'd never get a choice of it.
[52:15.840 --> 52:20.840]  In some cases, the realtor gets to choose the title company or the attorney.
[52:20.840 --> 52:27.840]  We haven't even talked about attorneys yet, or attorney closings, and we'll get you a whole show just on those.
[52:27.840 --> 52:32.840]  But the service providers have the incentive to make the dollars off of your transaction
[52:32.840 --> 52:38.840]  and make the loan work because the lender is the one that in most cases is driving it,
[52:38.840 --> 52:40.840]  or in conjunction with everyone else, especially if it's a purchase.
[52:40.840 --> 52:44.840]  The realtors have their hands knee-deep in it.
[52:44.840 --> 52:50.840]  So what's the remedy?
[52:50.840 --> 52:54.840]  Well, again, the devil's in the details, and the details are in your application.
[52:54.840 --> 52:55.840]  Absolutely.
[52:55.840 --> 52:59.840]  Every piece of documentation...
[52:59.840 --> 53:00.840]  Sorry.
[53:00.840 --> 53:07.840]  That is interesting that everything goes back to the application.
[53:07.840 --> 53:14.840]  Where do we look in the application for telling details?
[53:14.840 --> 53:22.840]  Well, it's the beginning and the end, and the beginning is when you started your application process,
[53:22.840 --> 53:25.840]  whether it's a purchase or a refinance, it doesn't really matter,
[53:25.840 --> 53:31.840]  and those first disclosures that went out that you received versus the actual loan you received.
[53:31.840 --> 53:34.840]  Now, we hear stories of this and have heard these for years.
[53:34.840 --> 53:41.840]  Well, I applied for a 6% loan, but the loan I got was 10%, or I applied for a 15-year, but I got a 30,
[53:41.840 --> 53:45.840]  and the title company told me that if I didn't get it, I wouldn't close for another 30 or 45 days.
[53:45.840 --> 53:50.840]  If I didn't take this rate, then I wouldn't get the loan, and my credit cards would go to Lincoln,
[53:50.840 --> 53:54.840]  or if I didn't take this loan, then my stuff would sit in the moving truck,
[53:54.840 --> 53:57.840]  and we wouldn't be able to move in over Memorial Day weekend,
[53:57.840 --> 54:03.840]  and we've got no place to go because we sold our other house, and we either take it or tough luck.
[54:03.840 --> 54:10.840]  These are the types of things that the beginning to the end and really every step in between that changes.
[54:10.840 --> 54:15.840]  Remember, the application you take in the beginning should match the loan you get at the end.
[54:15.840 --> 54:21.840]  If it doesn't, there are indications in there that you have some type of breach of fiduciary responsibility
[54:21.840 --> 54:24.840]  from one of your service providers.
[54:24.840 --> 54:30.840]  Most of the time, it'll run back to the loan officer or the broker of record that gave you that loan.
[54:30.840 --> 54:37.840]  Yes, and as I recall, the percentage rate quoted in the original good faith estimate
[54:37.840 --> 54:42.840]  has to be within eighth of a percent of the closing rate?
[54:42.840 --> 54:44.840]  Absolutely. Absolutely.
[54:44.840 --> 54:50.840]  Now, if it's lower, they should disclose if it's higher.
[54:50.840 --> 54:56.840]  If it's lower, the statute actually doesn't require it to be.
[54:56.840 --> 54:59.840]  If it's lower than an eighth, it doesn't require it because you're getting a better rate,
[54:59.840 --> 55:02.840]  so nobody's going to complain about getting a better rate.
[55:02.840 --> 55:04.840]  But if it's higher, they should always.
[55:04.840 --> 55:09.840]  As a matter of fact, they're supposed to re-disclose and give you three days to review those documents
[55:09.840 --> 55:12.840]  if it's higher than that, and that didn't happen.
[55:12.840 --> 55:17.840]  Exactly. That's 226-1982-II.
[55:17.840 --> 55:22.840]  And any time there's a change, they have to notify you within three days
[55:22.840 --> 55:28.840]  or they have to get from a waiver of disclosure.
[55:28.840 --> 55:29.840]  Correct.
[55:29.840 --> 55:32.840]  And I've never seen a waiver of disclosure.
[55:32.840 --> 55:34.840]  Randy, I haven't seen one in 20 years.
[55:34.840 --> 55:40.840]  I don't think I'm going to see one anytime soon.
[55:40.840 --> 55:43.840]  Okay. What is the remedy?
[55:43.840 --> 55:48.840]  How do we address this in a way?
[55:48.840 --> 55:54.840]  Every time I write a legal document, I always write it for a jury to read.
[55:54.840 --> 56:01.840]  How do we address this in a way that it will claim a remedy in a way
[56:01.840 --> 56:09.840]  that an ordinary jury of our peers, not your peers, your industry insider,
[56:09.840 --> 56:14.840]  but someone off the street would understand?
[56:14.840 --> 56:20.840]  Well, it's really just looking at what the process was and what you got.
[56:20.840 --> 56:27.840]  You went in looking for one product or one type alone, and you got something else.
[56:27.840 --> 56:29.840]  If you go into a car dealership and say,
[56:29.840 --> 56:32.840]  hey, I'd like a four-door automatic blue model,
[56:32.840 --> 56:37.840]  and you walk out of there with a subcompact two-door stick shift with no power steering,
[56:37.840 --> 56:41.840]  you didn't get what you asked for and the responsibility.
[56:41.840 --> 56:45.840]  Like Deborah said earlier, there are consumer protection laws in place.
[56:45.840 --> 56:47.840]  They're designed to do what?
[56:47.840 --> 56:52.840]  To protect the naive borrower, uneducated borrower that doesn't have the ability
[56:52.840 --> 56:56.840]  or the knowledge to be the expert in that.
[56:56.840 --> 56:59.840]  That's why you rely on these types of service providers.
[56:59.840 --> 57:03.840]  And when they don't live up to what they're supposed to,
[57:03.840 --> 57:06.840]  you just identify those, and it's really not that hard.
[57:06.840 --> 57:08.840]  I mean, if you went in and you said, I got my loan.
[57:08.840 --> 57:09.840]  I applied for it.
[57:09.840 --> 57:12.840]  It was 6 percent, and I got a 10 percent note.
[57:12.840 --> 57:13.840]  Everyone understands that.
[57:13.840 --> 57:16.840]  Now, the question is, well, why?
[57:16.840 --> 57:19.840]  In most cases, it's because there is some variable,
[57:19.840 --> 57:23.840]  whether it's your credit or the documentation type or all that,
[57:23.840 --> 57:26.840]  but it should be clearly outlined.
[57:26.840 --> 57:29.840]  It should be clearly outlined why your loan changed.
[57:29.840 --> 57:31.840]  If you don't know why your loan changed,
[57:31.840 --> 57:36.840]  then 99 percent of the time there is a major flaw in your loan.
[57:36.840 --> 57:37.840]  It's just identifying what they are.
[57:37.840 --> 57:40.840]  You started off with 6 percent, and you ended up with a 10 percent rate.
[57:40.840 --> 57:42.840]  You were supposed to close on February 19th.
[57:42.840 --> 57:45.840]  You didn't close until April 1st.
[57:45.840 --> 57:51.840]  Any one of those variables leads to something that leads back to all these little tricks,
[57:51.840 --> 57:53.840]  all these little things that are in there.
[57:53.840 --> 57:54.840]  Here's a perfect one.
[57:54.840 --> 57:56.840]  Go ahead.
[57:56.840 --> 57:57.840]  I was going to say, you went in.
[57:57.840 --> 57:59.840]  You got perfect credit.
[57:59.840 --> 58:01.840]  You applied for a great loan, and they said,
[58:01.840 --> 58:05.840]  we can't close on you because you're going to run out of time,
[58:05.840 --> 58:06.840]  and we're going to give you a subprime loan.
[58:06.840 --> 58:08.840]  Your rate shoots through the roof.
[58:08.840 --> 58:11.840]  That's a big trick.
[58:11.840 --> 58:12.840]  Okay.
[58:12.840 --> 58:15.840]  I didn't quite understand that, so when we come back,
[58:15.840 --> 58:19.840]  I would like to go into that a little more deeply.
[58:19.840 --> 58:24.840]  We're going to our top-of-the-hour break, your three-minute break.
[58:24.840 --> 58:27.840]  The phone lines are open if you have some questions.
[58:27.840 --> 58:30.840]  We'll be taking questions for the next hour.
[58:30.840 --> 58:34.840]  I definitely want to talk about that when we come back,
[58:34.840 --> 58:38.840]  how we made it and how we switched and how we're strong-armed.
[58:38.840 --> 58:44.840]  This is Randy Kelton, Douglas Stevens, Eddie Craig, We Have Law Radio.
[58:44.840 --> 58:51.840]  Call us if you have questions or comments at 512-646-1984.
[58:51.840 --> 58:59.840]  We'll be right back on the other side.
[58:59.840 --> 59:03.840]  The Bible remains the most popular book in the world,
[59:03.840 --> 59:07.840]  yet countless readers are frustrated because they struggle to understand it.
[59:07.840 --> 59:11.840]  Some new translations try to help by simplifying the text,
[59:11.840 --> 59:16.840]  but in the process can compromise the profound meaning of the Scripture.
[59:16.840 --> 59:18.840]  Enter the recovery version.
[59:18.840 --> 59:22.840]  First, this new translation is extremely faithful and accurate,
[59:22.840 --> 59:27.840]  but the real story is the more than 9,000 explanatory footnotes.
[59:27.840 --> 59:31.840]  Difficult and profound passages are opened up in a marvelous way,
[59:31.840 --> 59:34.840]  providing an entrance into the riches of the Word
[59:34.840 --> 59:37.840]  beyond which you've ever experienced before.
[59:37.840 --> 59:42.840]  Bibles for America would like to give you a free recovery version simply for the asking.
[59:42.840 --> 59:47.840]  This comprehensive yet compact study Bible is yours just by calling us toll-free,
[59:47.840 --> 59:52.840]  at 1-888-551-0102,
[59:52.840 --> 59:56.840]  or by ordering online at freestudybible.com.
[59:56.840 --> 59:59.840]  That's freestudybible.com.
[59:59.840 --> 01:00:03.840]  This news brief brought to you by the International News Network.
[01:00:03.840 --> 01:00:07.840]  The Obama Administration is preparing to increase the use of military commissions
[01:00:07.840 --> 01:00:09.840]  to prosecute Guantanamo detainees.
[01:00:09.840 --> 01:00:14.840]  Two years ago, Barack Obama signed an executive order closing Guantanamo,
[01:00:14.840 --> 01:00:16.840]  but the prison remains open.
[01:00:16.840 --> 01:00:20.840]  The Administration is also preparing an executive order to indefinitely detain
[01:00:20.840 --> 01:00:23.840]  nearly 50 prisoners for life without trial.
[01:00:23.840 --> 01:00:27.840]  A type of parole board is to periodically review their cases.
[01:00:27.840 --> 01:00:32.840]  Many who will be tried were waterboarded by the CIA.
[01:00:32.840 --> 01:00:37.840]  Demonstrators crashed a mortgage bankers' association summit in Washington Wednesday,
[01:00:37.840 --> 01:00:40.840]  protesting the government's bailout of a financial system.
[01:00:40.840 --> 01:00:45.840]  AFL-CIO union workers pushed past security into the conference room,
[01:00:45.840 --> 01:00:47.840]  unraveling a banner that read,
[01:00:47.840 --> 01:00:50.840]  Show us the $900 million bailout money.
[01:00:50.840 --> 01:00:58.840]  Mortgage lender The Pult Group was given a $917 million tax break in 2009.
[01:00:58.840 --> 01:01:01.840]  Nobel Peace Laureate Barack Obama ate a state dinner
[01:01:01.840 --> 01:01:05.840]  with Chinese President Hu Jintao at the White House Wednesday,
[01:01:05.840 --> 01:01:11.840]  while this year's Nobel Peace recipient Lou Jabeau remained in a Chinese jail.
[01:01:11.840 --> 01:01:15.840]  Obama has avoided criticizing Hu overtly on human rights,
[01:01:15.840 --> 01:01:20.840]  saying instead they come from quote, very different cultures.
[01:01:20.840 --> 01:01:26.840]  A WikiLeaks cable has revealed the U.S. was advised to adopt a policy of covert sabotage
[01:01:26.840 --> 01:01:30.840]  of Iran's clandestine nuclear facilities, including computer hacking
[01:01:30.840 --> 01:01:34.840]  and unexplained explosions by a German think tank.
[01:01:34.840 --> 01:01:39.840]  Volker Pertes, director of the Institute for Security and International Affairs,
[01:01:39.840 --> 01:01:45.840]  told U.S. officials undercover operations would be more effective than a military strike.
[01:01:45.840 --> 01:01:51.840]  A sophisticated computer worm, Stuxnet, infiltrated the Natanz nuclear facility last year,
[01:01:51.840 --> 01:01:54.840]  delaying Iran's nuclear program by months.
[01:01:54.840 --> 01:01:59.840]  On Monday, Iran's top nuclear negotiator, Saeed Jalili,
[01:01:59.840 --> 01:02:02.840]  said the U.S. was found to have been involved in the attack
[01:02:02.840 --> 01:02:08.840]  that shut down one-fifth of Iran's nuclear centrifuges in November.
[01:02:08.840 --> 01:02:12.840]  People are questioning why U.S. states that face major budget shortfalls
[01:02:12.840 --> 01:02:15.840]  are continuing to subsidize Hollywood films.
[01:02:15.840 --> 01:02:19.840]  Hollywood has relied on taxpayer support for recent films like
[01:02:19.840 --> 01:02:23.840]  How Do You Know?, Love and Other Drugs, and 127 Hours.
[01:02:23.840 --> 01:02:29.840]  Like the main character in 127 Hours, many states trapped between a rock and a hard place
[01:02:29.840 --> 01:02:34.840]  might be forced to slash Hollywood subsidies to help solve budget shortfalls.
[01:02:34.840 --> 01:02:40.840]  The New Jersey State Legislature passed a bill last week reviving and expanding a tax credit
[01:02:40.840 --> 01:02:44.840]  that underwrites up to 20 percent of certain movie-making expenses.
[01:02:44.840 --> 01:02:50.840]  Governor Christopher Christie recently proposed cutting funding for public education by $820 million
[01:02:50.840 --> 01:03:04.840]  and aid for colleges and universities by $175 million.
[01:03:21.840 --> 01:03:28.840]  They want to charge down Babylon and burn down the whole nation.
[01:03:28.840 --> 01:03:31.840]  But they don't operate the land wrong.
[01:03:31.840 --> 01:03:34.840]  I'm going to tell the Republicans and Democrats, man,
[01:03:34.840 --> 01:03:36.840]  tell them I'm a libertarian.
[01:03:36.840 --> 01:03:38.840]  They say we're going to lose but we're going to win.
[01:03:38.840 --> 01:03:40.840]  Come on, rap, how are you?
[01:03:44.840 --> 01:03:46.840]  How are we set?
[01:03:46.840 --> 01:03:49.840]  I've look through word, I look through words,
[01:03:49.840 --> 01:03:52.280]  как controls women,
[01:03:51.840 --> 01:03:53.840]  accomplished in women?
[01:03:53.840 --> 01:03:55.840]  How about broadband?
[01:03:56.840 --> 01:03:56.840]  clears out Richmond
[01:03:57.840 --> 01:03:59.840]  follows them
[01:03:59.840 --> 01:04:00.840]  They Travel
[01:04:04.840 --> 01:04:06.840]  I hear them when I talk when I see
[01:04:06.840 --> 01:04:09.840]  See all men were created equally
[01:04:10.840 --> 01:04:12.840]  doubt that Babylon was created equally
[01:04:12.840 --> 01:04:20.840]  And when night come, just for everybody So one by one, me have to chant them, man
[01:04:20.840 --> 01:04:27.840]  Me chant on Babylon, because Babylon is wrong The only right man, me say, is the rest, come on
[01:04:27.840 --> 01:04:34.840]  We take, me say, Lord, man, devour young man To chant on Babylon, no, not later
[01:04:34.840 --> 01:04:41.840]  To let Babylon know, say, we death in greater We bite the donkey, me say, to tell a lie
[01:04:41.840 --> 01:04:46.840]  Say, Jesus Christ, I'll rescue him, and I'll chant down by
[01:04:46.840 --> 01:04:52.840]  Okay, this is Brandon Kelton, Debra Stevens, Eddie Craig from Vlog Radio.
[01:04:52.840 --> 01:04:59.840]  We're back. We're taking callers. We do have a caller on the line.
[01:04:59.840 --> 01:05:04.840]  And before we go back to Nick, we will take Suzanne.
[01:05:04.840 --> 01:05:09.840]  Suzanne, what question or comment do you have?
[01:05:09.840 --> 01:05:16.840]  You've got a good question for Nick.
[01:05:16.840 --> 01:05:18.840]  Suzanne, are you there?
[01:05:18.840 --> 01:05:20.840]  Can you hear me? Hello?
[01:05:20.840 --> 01:05:21.840]  There we go.
[01:05:21.840 --> 01:05:22.840]  Can you hear me, Suzanne?
[01:05:22.840 --> 01:05:23.840]  Hello, Suzanne.
[01:05:23.840 --> 01:05:24.840]  Yes.
[01:05:24.840 --> 01:05:25.840]  Do you have a question for Nick?
[01:05:25.840 --> 01:05:36.840]  Yes. I wanted to ask him, what would happen if you're not on the note and the mortgage was attained in your name through a forgery?
[01:05:36.840 --> 01:05:39.840]  What would happen then?
[01:05:39.840 --> 01:05:44.840]  I'm not sure I understand your question. If you're not on the note but it was obtained in your name.
[01:05:44.840 --> 01:05:48.840]  No, a mortgage was obtained in my husband's name.
[01:05:48.840 --> 01:05:59.840]  He didn't borrow the money, but the mortgage was used, a forgery was used with his name on it, so he didn't borrow the money.
[01:05:59.840 --> 01:06:03.840]  In other words, your husband's name was forged on the application for the loan?
[01:06:03.840 --> 01:06:09.840]  No, he made no application. The note was filed by somebody else.
[01:06:09.840 --> 01:06:21.840]  They borrowed the money, and the mortgage that was put against the property was used by a forgery with a private attorney.
[01:06:21.840 --> 01:06:24.840]  Yes, that's fraud. That's a fraud.
[01:06:24.840 --> 01:06:31.840]  That's something that's a note title company closing attorney, whomever allowed that to happen.
[01:06:31.840 --> 01:06:37.840]  Remember, the closing of a loan happens with a third party. It's supposed to be a neutral third party.
[01:06:37.840 --> 01:06:41.840]  Whether that's a licensed attorney in the state, what state are you in?
[01:06:41.840 --> 01:06:43.840]  New York.
[01:06:43.840 --> 01:06:49.840]  New York is an attorney closing state. There's an attorney that is responsible for that closing,
[01:06:49.840 --> 01:06:55.840]  and that attorney is supposed to determine that the person sitting in front of them signing those documents
[01:06:55.840 --> 01:07:01.840]  is one in the same as the person with the identification. They walk in there and are executing those documents.
[01:07:01.840 --> 01:07:08.840]  If they did not, they breached their fiduciary responsibility, not only as the closing attorney,
[01:07:08.840 --> 01:07:11.840]  but they would have problems with the State Bar Association too.
[01:07:11.840 --> 01:07:16.840]  Have you taken any action against the closing attorney?
[01:07:16.840 --> 01:07:22.840]  No, they sued us for the mortgage, the bank, and we were held liable for it.
[01:07:22.840 --> 01:07:28.840]  Wait, stop. Did you take any action against the closing attorney?
[01:07:28.840 --> 01:07:36.840]  We didn't know about it until 2008, and we'd been trying to get documents, and they refused to give it to us.
[01:07:36.840 --> 01:07:41.840]  We were sued for the mortgage and for the note.
[01:07:41.840 --> 01:07:45.840]  Wait a minute. You're going back to the same place. We got that part.
[01:07:45.840 --> 01:07:49.840]  You were sued for the mortgage and note that you didn't sign for.
[01:07:49.840 --> 01:07:51.840]  Yes.
[01:07:51.840 --> 01:08:00.840]  Remedy. What Nick is saying, the attorney who did the closing, he got paid to do that,
[01:08:00.840 --> 01:08:06.840]  and he had a duty to ensure everything was right. Sue him. File against him.
[01:08:06.840 --> 01:08:14.840]  If you have reason to believe that he had knowledge that the documents before him weren't valid,
[01:08:14.840 --> 01:08:17.840]  file against him criminally.
[01:08:17.840 --> 01:08:23.840]  Recently, in the last few years in New York, they reworked their grand jury system.
[01:08:23.840 --> 01:08:29.840]  You actually have a pretty good grand jury system if you start using it.
[01:08:29.840 --> 01:08:38.840]  I understand from talking to you before that the courts were corrupt.
[01:08:38.840 --> 01:08:42.840]  I think she's already gone to the grand jury, and they wouldn't do anything about it.
[01:08:42.840 --> 01:08:54.840]  We went to the DA. The bank also told the judge and got a foreclosure notice signed,
[01:08:54.840 --> 01:09:00.840]  and they lied to the court stating that my husband was on the note and the mortgage.
[01:09:00.840 --> 01:09:05.840]  Okay. We got that part. Hold on. We got that part.
[01:09:05.840 --> 01:09:08.840]  Your husband's name was forged on the note.
[01:09:08.840 --> 01:09:12.840]  But then it's my husband on the loan, and he didn't because he didn't borrow the money.
[01:09:12.840 --> 01:09:18.840]  Okay. Wait a minute. We got that. What we're suggesting is remedy.
[01:09:18.840 --> 01:09:22.840]  There is remedy, but you have to exercise it.
[01:09:22.840 --> 01:09:25.840]  Make up a complaint. You file a complaint with the district attorney,
[01:09:25.840 --> 01:09:28.840]  and the district attorney refused to act, right?
[01:09:28.840 --> 01:09:34.840]  Yeah. They're citing statute of limitations.
[01:09:34.840 --> 01:09:36.840]  How old?
[01:09:36.840 --> 01:09:41.840]  They took the loan out in 1999, but we didn't find out about it until earlier.
[01:09:41.840 --> 01:09:45.840]  Okay. He's full of crap on us. This is fraud.
[01:09:45.840 --> 01:09:47.840]  They took the loan twice.
[01:09:47.840 --> 01:09:52.840]  Fraud goes to when it's discovered, not when the act was committed.
[01:09:52.840 --> 01:09:54.840]  That's the nature of fraud.
[01:09:54.840 --> 01:09:58.840]  So when did you discover this situation?
[01:09:58.840 --> 01:10:02.840]  Well, we still haven't discovered it because the bank refused to act.
[01:10:02.840 --> 01:10:04.840]  Stop. Wait a minute. Wait a minute.
[01:10:04.840 --> 01:10:07.840]  That's not what I'm asking.
[01:10:07.840 --> 01:10:14.840]  When did you discover that your husband's name was on a note that he didn't sign?
[01:10:14.840 --> 01:10:17.840]  His name was never on the note, never, ever.
[01:10:17.840 --> 01:10:20.840]  You're not answering my question.
[01:10:20.840 --> 01:10:23.840]  His name is in the mortgage, not the note.
[01:10:23.840 --> 01:10:26.840]  Okay. Look, look, look. We have to get things straight.
[01:10:26.840 --> 01:10:30.840]  Either your husband's name was on the note or it wasn't.
[01:10:30.840 --> 01:10:32.840]  Was your husband's name on the note?
[01:10:32.840 --> 01:10:36.840]  No. He did not take out the note.
[01:10:36.840 --> 01:10:38.840]  You're not answering my question.
[01:10:38.840 --> 01:10:43.840]  How did they hold him responsible if his name wasn't on it?
[01:10:43.840 --> 01:10:50.840]  They said that he, they said that he, what's that equity, that remedy in equity?
[01:10:50.840 --> 01:10:56.840]  He benefited by the note, by the fraudulent note.
[01:10:56.840 --> 01:10:57.840]  Okay. Wait a minute.
[01:10:57.840 --> 01:11:01.840]  You said earlier that someone forged his name on the note.
[01:11:01.840 --> 01:11:04.840]  No. He forged his name on the mortgage.
[01:11:04.840 --> 01:11:07.840]  The note did not have his name on it.
[01:11:07.840 --> 01:11:10.840]  He did not borrow the $100,000.
[01:11:10.840 --> 01:11:15.840]  The mortgage had his name forged on it.
[01:11:15.840 --> 01:11:17.840]  We didn't borrow the money.
[01:11:17.840 --> 01:11:20.840]  We didn't get the money, and it's not on the note.
[01:11:20.840 --> 01:11:22.840]  So his name wasn't forged on the note.
[01:11:22.840 --> 01:11:24.840]  No. No.
[01:11:24.840 --> 01:11:26.840]  Did he have an interest in the property?
[01:11:26.840 --> 01:11:32.840]  Yes. Yes. He owned the property with his brother.
[01:11:32.840 --> 01:11:37.840]  And they transferred the ownership to the father, who was in his 80s.
[01:11:37.840 --> 01:11:43.840]  Okay. So you're saying that someone forged his name on the lien document.
[01:11:43.840 --> 01:11:46.840]  Yes.
[01:11:46.840 --> 01:11:49.840]  When did you discover that?
[01:11:49.840 --> 01:11:56.840]  We discovered that in 2005, and we didn't find out.
[01:11:56.840 --> 01:12:01.840]  We haven't found out how they did this, because he took the Fifth Amendment.
[01:12:01.840 --> 01:12:05.840]  Okay. Statute of limitation doesn't go to how they did it.
[01:12:05.840 --> 01:12:07.840]  We don't know what they did.
[01:12:07.840 --> 01:12:09.840]  Only that it actually happened.
[01:12:09.840 --> 01:12:12.840]  The bank refuses to give us the document stating we're not the borrowers.
[01:12:12.840 --> 01:12:14.840]  Once you discover the fraud, then the statute of limitation starts to run,
[01:12:14.840 --> 01:12:18.840]  and the prosecutors write you're out of time.
[01:12:18.840 --> 01:12:20.840]  You're six years out.
[01:12:20.840 --> 01:12:26.840]  Well, I've understood from New York that when a bank demands the money from you,
[01:12:26.840 --> 01:12:29.840]  that's when the statute starts again,
[01:12:29.840 --> 01:12:33.840]  because otherwise your mortgage would be over in a couple years.
[01:12:33.840 --> 01:12:38.840]  And they demanded the money off of my husband in 2008.
[01:12:38.840 --> 01:12:44.840]  Okay. Then you can claim that as fraud against the bank.
[01:12:44.840 --> 01:12:51.840]  If you can show that the bank had some knowledge of the forgery on the lien.
[01:12:51.840 --> 01:12:56.840]  Yes. We wrote to the bank and the Banking Commission in 2005,
[01:12:56.840 --> 01:13:01.840]  and they said they'd better not bother you for this.
[01:13:01.840 --> 01:13:08.840]  But they came in anyway in 2008 and demanded that we pay for it, and we lost.
[01:13:08.840 --> 01:13:14.840]  You've got to understand the Banking Commission is a public relations agency for the banks,
[01:13:14.840 --> 01:13:19.840]  just like the bar is a public relations agency for attorneys.
[01:13:19.840 --> 01:13:25.840]  So don't expect them to do anything for you and certainly don't believe what they tell you.
[01:13:25.840 --> 01:13:27.840]  Okay. We really need to move on.
[01:13:27.840 --> 01:13:30.840]  This is way too complex a subject.
[01:13:30.840 --> 01:13:34.840]  We could spend all night bantering this one back and forth.
[01:13:34.840 --> 01:13:39.840]  Nick has way too much information to provide for us.
[01:13:39.840 --> 01:13:49.840]  I'm sorry. I think you're out of time, unless you can tie the bank to the fraud.
[01:13:49.840 --> 01:13:51.840]  Randy, can I ask a question?
[01:13:51.840 --> 01:13:54.840]  Absolutely.
[01:13:54.840 --> 01:14:02.840]  Ma'am, do you actually know whom it was that forged these documents?
[01:14:02.840 --> 01:14:05.840]  My husband's sister.
[01:14:05.840 --> 01:14:10.840]  Okay. So have you gone to the FBI for identity theft?
[01:14:10.840 --> 01:14:15.840]  Yes, and they said that the house isn't worth a million dollars,
[01:14:15.840 --> 01:14:18.840]  so they're not going to investigate it for their funds.
[01:14:18.840 --> 01:14:21.840]  But we lost our home, and we were evicted.
[01:14:21.840 --> 01:14:25.840]  We were thrown out, and they sold the house for half price,
[01:14:25.840 --> 01:14:29.840]  and it ruined my husband's credit, and we did not borrow the money.
[01:14:29.840 --> 01:14:31.840]  It was a crime that was...
[01:14:31.840 --> 01:14:34.840]  Stop, stop. Okay. We understand that.
[01:14:34.840 --> 01:14:42.840]  We hear a lot of horror stories, but we're here about trying to find remedy,
[01:14:42.840 --> 01:14:48.840]  and the problem with this one is it's too old, and eventually we run out of time.
[01:14:48.840 --> 01:14:50.840]  But we've been in litigation trying...
[01:14:50.840 --> 01:14:56.840]  We've been in litigation fighting it, and they said that we benefited by this loan.
[01:14:56.840 --> 01:14:58.840]  I want to know how you benefit...
[01:14:58.840 --> 01:15:01.840]  Okay, wait a minute, wait a minute. Okay.
[01:15:01.840 --> 01:15:06.840]  This is not a place to excise every detail of what went on your loan.
[01:15:06.840 --> 01:15:07.840]  We don't have time for it.
[01:15:07.840 --> 01:15:08.840]  But we didn't borrow the money.
[01:15:08.840 --> 01:15:13.840]  I thought under the laws and regulations, the note is what you borrow,
[01:15:13.840 --> 01:15:17.840]  and the mortgage is the security for that note.
[01:15:17.840 --> 01:15:20.840]  Now, if you're not on the note, there is no security.
[01:15:20.840 --> 01:15:25.840]  You don't have to be on the note to be on the mortgage.
[01:15:25.840 --> 01:15:30.840]  Well, if the mortgage is a fraud, then they had no legal action against you.
[01:15:30.840 --> 01:15:32.840]  Okay, just talking about fraud here.
[01:15:32.840 --> 01:15:37.840]  Everything you're saying is fraud, but it's not about the mortgage industry.
[01:15:37.840 --> 01:15:41.840]  It's about fraud. It's about corrupt courts.
[01:15:41.840 --> 01:15:46.840]  And it's about a bank who came after an innocent victim who didn't take the money.
[01:15:46.840 --> 01:15:50.840]  Well, what is your point? We need questions so we can give you answers.
[01:15:50.840 --> 01:15:52.840]  You're telling us all the bad things.
[01:15:52.840 --> 01:15:57.840]  Use your name and steal your house and your property and make you pay for it.
[01:15:57.840 --> 01:16:00.840]  Yes. Wait a minute. You're running the same thing over and over.
[01:16:00.840 --> 01:16:03.840]  Can they steal from you? You're right they can steal from you.
[01:16:03.840 --> 01:16:07.840]  They do it every day. Is it legal? No, it ain't legal.
[01:16:07.840 --> 01:16:12.840]  But the judge sanctioned fraud.
[01:16:12.840 --> 01:16:15.840]  Of course the judge. You're thinking judges aren't corrupt.
[01:16:15.840 --> 01:16:19.840]  But the bank is the one that lied saying we were on the note.
[01:16:19.840 --> 01:16:21.840]  So the bank is a liar.
[01:16:21.840 --> 01:16:24.840]  What are you doing? What do you want us to do?
[01:16:24.840 --> 01:16:29.840]  Do you want us to sit here and listen to you go excise for anger
[01:16:29.840 --> 01:16:31.840]  and tell us all of the bad things?
[01:16:31.840 --> 01:16:34.840]  Man, we hear all these bad things all the time. We know.
[01:16:34.840 --> 01:16:36.840]  What do you want to do?
[01:16:36.840 --> 01:16:38.840]  The time is out for us all.
[01:16:38.840 --> 01:16:41.840]  Do something for it.
[01:16:41.840 --> 01:16:43.840]  What?
[01:16:43.840 --> 01:16:49.840]  We're suggesting something to do and keep interrupting and going somewhere else.
[01:16:49.840 --> 01:16:51.840]  I have something for you to do.
[01:16:51.840 --> 01:16:54.840]  Let me get through it without telling you more bad stuff.
[01:16:54.840 --> 01:17:21.840]  We'll be right back on the other side.
[01:17:24.840 --> 01:17:29.840]  We are located at 5448 Burnett Road, Suite 3 at the corner of Burnett and Shulmont.
[01:17:29.840 --> 01:17:33.840]  And we're open Mondays and Fridays, 10 to 6, Saturdays, 10 to 5.
[01:17:33.840 --> 01:17:40.840]  You are welcome to stop in our shop during regular business hours or call 512-646-644-0.
[01:17:40.840 --> 01:17:41.840]  Any questions?
[01:17:41.840 --> 01:17:45.840]  Ask for a chat and say you heard about us on Google Law Radio or Texas Liberty Radio.
[01:17:45.840 --> 01:17:48.840]  That's Capitol Point in Bullion at the corner of Burnett and Shulmont.
[01:17:48.840 --> 01:17:52.840]  And we're open Mondays and Fridays, 10 to 6, Saturdays, 10 to 5.
[01:17:52.840 --> 01:17:59.840]  That's Capitol Point in Bullion, 512-646-644-0.
[01:17:59.840 --> 01:18:05.840]  It is so enlightening to listen to 90.1 FM, but finding things on the Internet isn't so easy.
[01:18:05.840 --> 01:18:08.840]  And neither is finding like-minded people to share it with.
[01:18:08.840 --> 01:18:11.840]  Oh, well, I guess you haven't heard of Brave New Books, then.
[01:18:11.840 --> 01:18:12.840]  Brave New Books?
[01:18:12.840 --> 01:18:13.840]  Yes.
[01:18:13.840 --> 01:18:19.840]  Brave New Books has all the books and DVDs you're looking for by authors like Alex Jones, Ron Paul, and G. Edward Griffin.
[01:18:19.840 --> 01:18:23.840]  They even stock inner food, Berkey products, and Calvin Soaps.
[01:18:23.840 --> 01:18:25.840]  There's no way a place like that exists.
[01:18:25.840 --> 01:18:31.840]  Go check it out for yourself. It's downtown at 1904 Guadalupe Street, just south of UT.
[01:18:31.840 --> 01:18:35.840]  By UT, there's never anywhere to park down there.
[01:18:35.840 --> 01:18:42.840]  Actually, they now offer a free hour of parking for paying customers at the 500 MLK Parking Facility, just behind the bookstore.
[01:18:42.840 --> 01:18:46.840]  It does exist, but when are they open?
[01:18:46.840 --> 01:18:51.840]  Monday through Saturday, 11 AM to 9 PM, and 1 to 6 PM on Sundays.
[01:18:51.840 --> 01:19:20.840]  So give them a call at 512-480-2503, or check out their events page at bravenewbookstore.com.
[01:19:21.840 --> 01:19:24.840]  I'm going to fool me with that same old trick again.
[01:19:24.840 --> 01:19:29.840]  I was blindsided, but now I can see your plans.
[01:19:29.840 --> 01:19:34.840]  You put the fear in my pocket, took the money from my hands.
[01:19:34.840 --> 01:19:43.840]  Ain't gonna fool me with that same old trick again.
[01:19:43.840 --> 01:19:59.840]  Ain't gonna fool me with that same old trick again.
[01:19:59.840 --> 01:20:07.840]  Ain't gonna fool me with that same old trick again.
[01:20:07.840 --> 01:20:14.840]  If I sound frustrated, it's because I feel your frustration, and I feel your anger.
[01:20:14.840 --> 01:20:20.840]  I hear these stories sometimes, and I get so angry I want to choke someone.
[01:20:20.840 --> 01:20:26.840]  And this is one of them, and I understand that things are corrupt.
[01:20:26.840 --> 01:20:31.840]  And unfortunately, the good guys don't always win.
[01:20:31.840 --> 01:20:38.840]  If you're going to get any traction, you're going to have to use grand juries to get the traction.
[01:20:38.840 --> 01:20:45.840]  And I can explain to you how to do it, but you have to let me get through it.
[01:20:45.840 --> 01:20:49.840]  You've already filed with the prosecuting attorney against them.
[01:20:49.840 --> 01:20:53.840]  The prosecuting attorney refused to act.
[01:20:53.840 --> 01:21:01.840]  I suggest you prepare complaints against the prosecuting attorney for obstruction of justice.
[01:21:01.840 --> 01:21:09.840]  And depending on what the state is, the state statutes are most likely official misconduct.
[01:21:09.840 --> 01:21:12.840]  Failure to perform a duty is required to perform.
[01:21:12.840 --> 01:21:18.840]  Now he's going to say he didn't have to perform it, and you're going to say, yeah, you did have to perform it.
[01:21:18.840 --> 01:21:27.840]  And build a complaint against the district attorney and file it with a district judge in his capacity as a magistrate.
[01:21:27.840 --> 01:21:37.840]  And the district judge will refuse to act on it, or whatever they call the highest judge in New York.
[01:21:37.840 --> 01:21:43.840]  I know the Supreme Court in New York is the lowest court, so I think it's a district court.
[01:21:43.840 --> 01:21:49.840]  But whatever the highest court is, just send the complaints to the judge. He'll ignore them.
[01:21:49.840 --> 01:21:57.840]  Then you make up a criminal complaint against the judge for official oppression,
[01:21:57.840 --> 01:22:05.840]  for failing to perform his duty as a magistrate, and file the complaints with a grand jury.
[01:22:05.840 --> 01:22:11.840]  And you send that to the grand jury addressed to the district attorney's office,
[01:22:11.840 --> 01:22:14.840]  but with the grand jurors, forming the grand jury's name on it.
[01:22:14.840 --> 01:22:17.840]  Well, the district attorney will get it and open it.
[01:22:17.840 --> 01:22:22.840]  And he's going to look at it, and he's going to know you set him up.
[01:22:22.840 --> 01:22:27.840]  You're trying to get the district judge indicted for not going after him.
[01:22:27.840 --> 01:22:31.840]  And he opened up the complaint addressed to the grand jury.
[01:22:31.840 --> 01:22:36.840]  Now you got him in a spot. He's going to know you set him up.
[01:22:36.840 --> 01:22:42.840]  The district judge is going to be livid when he finds out you're trying to get him indicted
[01:22:42.840 --> 01:22:45.840]  for not going after the prosecuting attorney.
[01:22:45.840 --> 01:22:47.840]  And he's going to go to the prosecuting attorney and say,
[01:22:47.840 --> 01:22:51.840]  what in the heck is going on here? Why are they coming after me?
[01:22:51.840 --> 01:22:53.840]  Because of what you did.
[01:22:53.840 --> 01:22:58.840]  And then the prosecuting attorney is going to go back to whoever these people are.
[01:22:58.840 --> 01:23:01.840]  Good chance you can get him to take some action.
[01:23:01.840 --> 01:23:05.840]  It's about the only shot you got.
[01:23:05.840 --> 01:23:09.840]  You have to make it political.
[01:23:09.840 --> 01:23:13.840]  The law won't win you your case in a corrupt system.
[01:23:13.840 --> 01:23:15.840]  This is a corrupt system.
[01:23:15.840 --> 01:23:20.840]  We have to find a way to bring politics to bear.
[01:23:20.840 --> 01:23:25.840]  Go after the individual with the appropriate party, the district attorney.
[01:23:25.840 --> 01:23:32.840]  When he doesn't act, go after the parties for not doing their jobs.
[01:23:32.840 --> 01:23:42.840]  Make their lives miserable so you create political influence from them to get what you need done.
[01:23:42.840 --> 01:23:46.840]  I don't see any other way of going about it.
[01:23:46.840 --> 01:23:57.840]  Have you filed criminal complaints or have you just went and made voluntary statements to agencies?
[01:23:57.840 --> 01:24:02.840]  We filed complaints to the district attorney's office.
[01:24:02.840 --> 01:24:05.840]  Okay, stop. Stop.
[01:24:05.840 --> 01:24:14.840]  Did you file a verified criminal affidavit or did you just file a statement with the district attorney?
[01:24:14.840 --> 01:24:16.840]  We verified the statements.
[01:24:16.840 --> 01:24:20.840]  We verified them making the complaint.
[01:24:20.840 --> 01:24:26.840]  A criminal complaint is a special document.
[01:24:26.840 --> 01:24:29.840]  It has a specific form.
[01:24:29.840 --> 01:24:40.840]  Just do a search on the Internet for criminal complaint New York and you see the form it takes.
[01:24:40.840 --> 01:24:50.840]  Write out a complaint in that form and write a statement of probable cause to go with it.
[01:24:50.840 --> 01:24:53.840]  Take them both to a notary, have them notarized.
[01:24:53.840 --> 01:24:57.840]  In law, notary is verification.
[01:24:57.840 --> 01:25:00.840]  Affirmation is your signature.
[01:25:00.840 --> 01:25:08.840]  Affirm them before a notary, have the notary verify the documents, give that to the prosecuting attorney.
[01:25:08.840 --> 01:25:13.840]  That is not a voluntary statement.
[01:25:13.840 --> 01:25:17.840]  That is a criminal complaint that directly invokes his duty.
[01:25:17.840 --> 01:25:22.840]  A voluntary statement, even if it's verified, does not invoke his duty.
[01:25:22.840 --> 01:25:25.840]  You have to have that criminal complaint with it.
[01:25:25.840 --> 01:25:29.840]  Then when he doesn't act, you do the same thing.
[01:25:29.840 --> 01:25:36.840]  You file a, prepare a criminal complaint against the prosecutor with a statement of probable cause
[01:25:36.840 --> 01:25:41.840]  and send that to the highest judge you can find.
[01:25:41.840 --> 01:25:47.840]  And you send it to him and it invokes his duty as a magistrate.
[01:25:47.840 --> 01:25:50.840]  Then when he doesn't act, you go back to the grand jury.
[01:25:50.840 --> 01:25:53.840]  We really have to move on.
[01:25:53.840 --> 01:25:58.840]  We have a lot of information we need to get through.
[01:25:58.840 --> 01:26:03.840]  Thank you for calling in.
[01:26:03.840 --> 01:26:15.840]  Nick, before the call, we were talking about the, I wanted to ask about bait switch strong arming,
[01:26:15.840 --> 01:26:25.840]  the tactics the lender uses to maneuver the borrower into a position to where they're trapped
[01:26:25.840 --> 01:26:27.840]  such that they have to have the loan.
[01:26:27.840 --> 01:26:32.840]  Like you mentioned, they're sitting there with all of their furniture in a moving truck
[01:26:32.840 --> 01:26:34.840]  because they've already sold their property.
[01:26:34.840 --> 01:26:39.840]  They come to closing and the lender changes the deal.
[01:26:39.840 --> 01:26:42.840]  Absolutely. Absolutely.
[01:26:42.840 --> 01:26:47.840]  Here's, this happened, and I don't know how much this is actually happening now
[01:26:47.840 --> 01:26:50.840]  because there are very few loans that are actually getting done.
[01:26:50.840 --> 01:26:53.840]  And of course, there's so much oversight on them.
[01:26:53.840 --> 01:26:59.840]  But if you walked into your local bank or your broker office or sat down with a loan officer
[01:26:59.840 --> 01:27:02.840]  and they said, you said, well, you know, I'd like to do this refinance.
[01:27:02.840 --> 01:27:12.840]  Now, in the boom days, there are anywhere from 2002, 2003 up through 2007, maybe even in 2008,
[01:27:12.840 --> 01:27:17.840]  there were so many applicants out there doing refinances and purchases and people buying up
[01:27:17.840 --> 01:27:21.840]  and that sort of thing, is that it's time to process those loans.
[01:27:21.840 --> 01:27:23.840]  You can only get so many of them through the system.
[01:27:23.840 --> 01:27:31.840]  We take anywhere from 45 days to 90 days and maybe even longer depending upon timing
[01:27:31.840 --> 01:27:34.840]  when it comes to, you know, selling a house and buying another.
[01:27:34.840 --> 01:27:37.840]  So what they would do is they'd say, okay, we'll get you in the system,
[01:27:37.840 --> 01:27:42.840]  we'll get you going so you're ready to go, and we're going to set your closing date.
[01:27:42.840 --> 01:27:43.840]  They always set a closing date.
[01:27:43.840 --> 01:27:47.840]  Well, that closing date rarely is a hard number in stone.
[01:27:47.840 --> 01:27:51.840]  Even if you have a purchase contract and you have back-to-back transactions,
[01:27:51.840 --> 01:27:55.840]  you're selling a house, you're purchasing a house, and then that seller is buying another house
[01:27:55.840 --> 01:27:59.840]  because the lender controls the process because they're the ones
[01:27:59.840 --> 01:28:01.840]  that are putting the money out for these loans.
[01:28:01.840 --> 01:28:03.840]  So therein lies the problem.
[01:28:03.840 --> 01:28:12.840]  The lenders get backed up or the loan officers do not want to take the –
[01:28:12.840 --> 01:28:13.840]  they don't want to say no.
[01:28:13.840 --> 01:28:16.840]  And that's always the biggest problem with salespeople anyways,
[01:28:16.840 --> 01:28:19.840]  but when you go through this process, they hate to tell someone no
[01:28:19.840 --> 01:28:24.840]  or they hate to tell someone, well, your rate is different because the appraisal came in lower
[01:28:24.840 --> 01:28:28.840]  and they couldn't fudge the appraisal enough so then the rate goes up
[01:28:28.840 --> 01:28:33.840]  because your loan value, the amount of the loan versus the value of the home, has changed.
[01:28:33.840 --> 01:28:37.840]  It's increased, so therefore your rate goes up because your risk is higher.
[01:28:37.840 --> 01:28:39.840]  That means your payments change.
[01:28:39.840 --> 01:28:42.840]  So they don't want to call someone up and say, Mr.
[01:28:42.840 --> 01:28:47.840]  or Mrs. Borrower, the payment I quoted you at $700 is now $1,100
[01:28:47.840 --> 01:28:49.840]  because they don't want to be the bad guy.
[01:28:49.840 --> 01:28:52.840]  So instead, they let the whole process go through.
[01:28:52.840 --> 01:28:55.840]  They get to the closing table, and it's a machine.
[01:28:55.840 --> 01:28:59.840]  It is there to generate closing after closing after closing.
[01:28:59.840 --> 01:29:04.840]  And anybody who did a loan in the last 10 years, 8 years, knows what it's like.
[01:29:04.840 --> 01:29:05.840]  You'd be in there.
[01:29:05.840 --> 01:29:07.840]  There would be a waiting room full of people.
[01:29:07.840 --> 01:29:08.840]  There's attorneys running in and out.
[01:29:08.840 --> 01:29:13.840]  There's closing agents and the attorneys shuffling papers all over the place.
[01:29:13.840 --> 01:29:14.840]  You're in there.
[01:29:14.840 --> 01:29:15.840]  You're there to do your closing.
[01:29:15.840 --> 01:29:16.840]  You look at your documentation and say, wait a minute.
[01:29:16.840 --> 01:29:20.840]  My rate is supposed to be six and a half, and this is eight,
[01:29:20.840 --> 01:29:22.840]  and there's no loan officer to be filed.
[01:29:22.840 --> 01:29:26.840]  The closing agent says, look, you either want this loan or you don't.
[01:29:26.840 --> 01:29:28.840]  Why do I want to talk to the bank or the broker?
[01:29:28.840 --> 01:29:32.840]  And so then the closing agent gets all exasperated and they say, fine,
[01:29:32.840 --> 01:29:36.840]  we'll get somebody on the call.
[01:29:36.840 --> 01:29:38.840]  Okay.
[01:29:38.840 --> 01:29:39.840]  Okay, hold on.
[01:29:39.840 --> 01:29:41.840]  We're about to go to another break.
[01:29:41.840 --> 01:29:44.840]  We'll pick this back up on the other side.
[01:29:44.840 --> 01:29:49.840]  This is Randy Kelton, Deborah Stevens, Eddie Craig, Rue La Radio.
[01:29:49.840 --> 01:29:55.840]  The phone lines are open, 512-646-1984.
[01:29:55.840 --> 01:29:59.840]  We'll be right back.
[01:29:59.840 --> 01:30:00.840]  I lost my son.
[01:30:00.840 --> 01:30:01.840]  My nephew.
[01:30:01.840 --> 01:30:02.840]  My uncle.
[01:30:02.840 --> 01:30:03.840]  My son.
[01:30:03.840 --> 01:30:04.840]  On September 11, 2001.
[01:30:04.840 --> 01:30:07.840]  Most people don't know that a third tower fell on September 11.
[01:30:07.840 --> 01:30:11.840]  World Trade Center 7, a 47-story skyscraper, was not hit by a plane.
[01:30:11.840 --> 01:30:15.840]  Although the official explanation is that fire brought down Building 7.
[01:30:15.840 --> 01:30:21.840]  Over 1,200 architects and engineers have looked into the evidence and believe there is more to the story.
[01:30:21.840 --> 01:30:24.840]  Bring justice to my son, my uncle, my nephew, my son.
[01:30:24.840 --> 01:30:26.840]  Go to buildingwhat.org.
[01:30:26.840 --> 01:30:31.840]  Why it fell, why it matters, and what you can do.
[01:30:31.840 --> 01:30:33.840]  Computer jargon can be confusing.
[01:30:33.840 --> 01:30:35.840]  Take SSL encryption.
[01:30:35.840 --> 01:30:41.840]  You may have heard the term, but did you know that using it could save you thousands of dollars and your privacy?
[01:30:41.840 --> 01:30:45.840]  I'm Dr. Catherine Albrecht, and I'll be back to tell you more in just a moment.
[01:30:45.840 --> 01:30:47.840]  Privacy is under attack.
[01:30:47.840 --> 01:30:50.840]  When you give up data about yourself, you'll never get it back again.
[01:30:50.840 --> 01:30:55.840]  And once your privacy is gone, you'll find your freedoms will start to vanish too.
[01:30:55.840 --> 01:31:00.840]  So protect your rights, say no to surveillance, and keep your information to yourself.
[01:31:00.840 --> 01:31:03.840]  Privacy, it's worth hanging on to.
[01:31:03.840 --> 01:31:10.840]  This public service announcement is brought to you by Startpage.com, the private search engine alternative to Google, Yahoo, and Bing.
[01:31:10.840 --> 01:31:14.840]  Start over with Startpage.
[01:31:14.840 --> 01:31:20.840]  SSL is short for Secure Sockets Layer, a way to transmit information securely over the Internet.
[01:31:20.840 --> 01:31:23.840]  Hackers can eavesdrop on your wireless Internet connections.
[01:31:23.840 --> 01:31:28.840]  But although pickup is a gobbledygook when you use SSL, that's why it's so important to you.
[01:31:28.840 --> 01:31:36.840]  You can tell you're protected with SSL when the Internet address in your browser window shows HTTPS, not just HTTP.
[01:31:36.840 --> 01:31:38.840]  The S is for secure.
[01:31:38.840 --> 01:31:42.840]  In addition, a little yellow padlock pops up at the bottom of your computer screen.
[01:31:42.840 --> 01:31:49.840]  You should always look for that padlock symbol before paying for purchases over the Internet or typing in a username and password.
[01:31:49.840 --> 01:32:00.840]  I'm Dr. Catherine Albrecht. More news and information at CatherineAlbrecht.com.
[01:32:00.840 --> 01:32:08.840]  Yeah, who you want to chip? Who you take me for? Fritoly? Who you want to chip? Me no Fritoly. You can't chip me.
[01:32:08.840 --> 01:32:14.840]  Almost like. Don't let them chip you in the morning. Chip you in the evening. Put a chip in your body.
[01:32:14.840 --> 01:32:22.840]  And then when you go computer reading, you can't hide me safe from nobody. When me say, chip in your mom, chip in your daddy.
[01:32:22.840 --> 01:32:29.840]  Chip in your grandpa and the granny. Chip in on me. Chip in on your baby. Chip in on your family, whole family.
[01:32:29.840 --> 01:32:36.840]  Chip in on your dad and the cap around me. Chip in on the beef and you still go EP. Chip in on the fish, them all in the sea.
[01:32:36.840 --> 01:32:41.840]  Chip in on the shark and the whale around me. You know still mankind, they don't chip crazy.
[01:32:41.840 --> 01:32:48.840]  They look in the tomb and they want to read it. Social security, they've got to tell me. Number when they give me, they'll rip it up you see.
[01:32:48.840 --> 01:32:55.840]  I'm chip you in the morning. Chip you in the evening. Chip you all the dinnertime. Experiment on mankind.
[01:32:55.840 --> 01:33:00.840]  Okay, this is Randy Kelton, Deborah Stevens, Eddie Craig, Lula La Radio.
[01:33:00.840 --> 01:33:09.840]  We're talking with Nick Denning and we were talking about closings and tricks and traps are used on closings.
[01:33:09.840 --> 01:33:23.840]  One of the questions I had was how many closings does a closing trustee expect to do in a day as a rule?
[01:33:23.840 --> 01:33:32.840]  Well today that number is if they're lucky they can do two because the market is so dramatically changed obviously.
[01:33:32.840 --> 01:33:42.840]  But at its peak, at the peak of the refi boom and of course that included all the purchases and people buying homes and trading up their homes.
[01:33:42.840 --> 01:33:54.840]  That number was as many as you could stick around for and there wasn't, there was no paradigm or there was no model that said
[01:33:54.840 --> 01:34:02.840]  if you're one person you can do effectively you can do 10 closings a day or 30 closings a day.
[01:34:02.840 --> 01:34:10.840]  It's as much as you can cram that paper down someone's throat, get them to sign the documents and get them out of there so you can get the next one in there.
[01:34:10.840 --> 01:34:17.840]  Because remember every closing agent has at least three people breathing down their neck all with their hands out.
[01:34:17.840 --> 01:34:21.840]  It's an attorney, in most cases it's a realtor and it's the loan officer.
[01:34:21.840 --> 01:34:26.840]  Now to add to that, on top of it you have someone that's called a funder.
[01:34:26.840 --> 01:34:32.840]  They work for the lender and they're out there looking for when do they send the money.
[01:34:32.840 --> 01:34:37.840]  They need the documents back, they need to be done in the manner and fashion that they expect them to be done.
[01:34:37.840 --> 01:34:40.840]  And then once they get those back they need to send that money.
[01:34:40.840 --> 01:34:47.840]  So this closer who's sitting in front of you is saying here's your documents, go ahead and sign them and we'll get you out of here.
[01:34:47.840 --> 01:34:52.840]  They're incentive because there are some title companies or they're an attorney.
[01:34:52.840 --> 01:34:58.840]  Obviously it's very obvious how they're getting paid that the more closings they do the better of an employee they are.
[01:34:58.840 --> 01:35:02.840]  They had incentives in some cases that the more closings they did they'd be better off.
[01:35:02.840 --> 01:35:08.840]  So it's not designed to give you ample time to review your documentation.
[01:35:08.840 --> 01:35:19.840]  It's certainly not designed to give you the time to review every single document, every single paragraph of every page and understand it by no means.
[01:35:19.840 --> 01:35:23.840]  If you sat there and said I think I want to read these documents, you know what they do?
[01:35:23.840 --> 01:35:29.840]  They pick you up, they say great I'm going to take you, I'm going to put you in this other room over here and you let me know when you're done
[01:35:29.840 --> 01:35:32.840]  and now come back to you and then we'll start over.
[01:35:32.840 --> 01:35:39.840]  And of course thereby segregating you and really in many cases making you feel like you're unwanted or you're a fool or anything like that.
[01:35:39.840 --> 01:35:42.840]  Like whoa, geez, I thought your lender went over these with you.
[01:35:42.840 --> 01:35:45.840]  I thought your loan officer talked to you about this.
[01:35:45.840 --> 01:35:49.840]  I'm not really sure what the problem is and that's where that strong arming comes from.
[01:35:49.840 --> 01:35:53.840]  In some cases it was pure idiocy.
[01:35:53.840 --> 01:36:01.840]  It was they didn't know any better, they didn't care because you're just one more person in the daisy train than trying to eat through this machine and get them in and out.
[01:36:01.840 --> 01:36:05.840]  And of course every one of these has dollar figures attached to them.
[01:36:05.840 --> 01:36:10.840]  That closing agent is charging you as a title agent for a number of fees.
[01:36:10.840 --> 01:36:15.840]  Go back to your settlement statements, look at those and you'll see what those fees are.
[01:36:15.840 --> 01:36:19.840]  You say I paid $5,000 for that kind of crappy service?
[01:36:19.840 --> 01:36:25.840]  I won't pay for that for a cheeseburger, why would I pay for it for the largest transaction that I've ever done in my life?
[01:36:25.840 --> 01:36:31.840]  And you realize wow, I get pushed through the system like everybody else and I got treated like dirt.
[01:36:31.840 --> 01:36:37.840]  Now it doesn't happen to everyone, but if you did a loan or a refi, in many cases you did get treated that way.
[01:36:37.840 --> 01:36:45.840]  And it's not only, it's morally wrong of course, but it's also a breach of their responsibility to allow you to have the time
[01:36:45.840 --> 01:36:51.840]  to review documentation on the largest transaction of your life in most cases for people.
[01:36:51.840 --> 01:36:59.840]  So that's one of the things I wanted to look at is how the trustee who's supposed to be that neutral party
[01:36:59.840 --> 01:37:09.840]  structured his business such that it would put this kind of undue pressure on the unsophisticated borrower.
[01:37:09.840 --> 01:37:14.840]  So I can come back and make the claim against the trustee.
[01:37:14.840 --> 01:37:22.840]  One of the problems they all have is this thing of vicarious liability.
[01:37:22.840 --> 01:37:33.840]  And under the doctrine of vicarious liability, anyone who participates in a harm that is indivisible,
[01:37:33.840 --> 01:37:41.840]  the courts have said that a harm that is indivisible cannot be divided up.
[01:37:41.840 --> 01:37:52.840]  So anyone who is in any way responsible for an ultimate harm can be held ultimately responsible for the entire harm.
[01:37:52.840 --> 01:38:03.840]  And if they feel that other individuals have a level of liability, they have to get their money from the other potential litigants.
[01:38:03.840 --> 01:38:12.840]  They can just complain or do whatever they want to, but the primary injured party need only sue one.
[01:38:12.840 --> 01:38:17.840]  And in trying to go after these people, that's been a problem because they keep saying,
[01:38:17.840 --> 01:38:21.840]  oh, I'm just servicing the note.
[01:38:21.840 --> 01:38:27.840]  I'm not responsible for what all those other people did, so you served the wrong party.
[01:38:27.840 --> 01:38:34.840]  And no matter what party you serve, they come back and say, oh, you got the wrong one.
[01:38:34.840 --> 01:38:40.840]  So it's kind of a card game to do shuffling the responsibility.
[01:38:40.840 --> 01:38:43.840]  So we go back after this.
[01:38:43.840 --> 01:38:48.840]  I can help you with that because one of the most closely, and it doesn't happen in every state.
[01:38:48.840 --> 01:38:56.840]  I can't speak for every state, but most states, when you have a title company member, a title company is a title insurer.
[01:38:56.840 --> 01:38:58.840]  And guess what?
[01:38:58.840 --> 01:39:02.840]  An insurer means that there's an insurance company backing them,
[01:39:02.840 --> 01:39:11.840]  and they have a bond that insures these title policies as well as they have errors and omissions insurance.
[01:39:11.840 --> 01:39:19.840]  Most individual signers, meaning closing agents, are required to have anywhere from a million to $3 million of errors and omissions insurance
[01:39:19.840 --> 01:39:23.840]  as well as a bond from the insurance company.
[01:39:23.840 --> 01:39:28.840]  So whether you're an attorney in an attorney closing state or you're actually a title company,
[01:39:28.840 --> 01:39:35.840]  going after that piece of it is much more significant because, you know, insurance companies hate to be sued.
[01:39:35.840 --> 01:39:39.840]  And if they find liability in that, it's a domino effect.
[01:39:39.840 --> 01:39:41.840]  Oh, wonderful.
[01:39:41.840 --> 01:39:48.840]  And the insurance company will put the pressure back on the other guys to make some kind of deal,
[01:39:48.840 --> 01:39:54.840]  and we're going to come back after you for fraud to recover our money from you.
[01:39:54.840 --> 01:40:01.840]  Well, it is all you have to do is find five closings from five different lenders that all occurred with the same one,
[01:40:01.840 --> 01:40:05.840]  and suddenly you've got a pattern that is easily established.
[01:40:05.840 --> 01:40:06.840]  It's really not that hard.
[01:40:06.840 --> 01:40:14.840]  I mean, there are so many of these transactions that happened over a short period of time that people were really just told,
[01:40:14.840 --> 01:40:19.840]  take it or, you know what, if you don't like it, maybe you should go and talk to your loan officer
[01:40:19.840 --> 01:40:23.840]  and reschedule their closing because we have all these other people behind you.
[01:40:23.840 --> 01:40:30.840]  It does not breed any type of conducive environment to allow someone to really review
[01:40:30.840 --> 01:40:35.840]  and understand the type of documentation they're signing, and it's a large amount of money.
[01:40:35.840 --> 01:40:39.840]  And it was sign it or get out, basically.
[01:40:39.840 --> 01:40:48.840]  I would consider that this was engineered this way in order to put this kind of undue pressure
[01:40:48.840 --> 01:40:51.840]  in order to force the person to close.
[01:40:51.840 --> 01:40:59.840]  On the average, what does a trustee charge to do a loan closing?
[01:40:59.840 --> 01:41:02.840]  Well, you have to divide up a couple of different things.
[01:41:02.840 --> 01:41:11.840]  The closing itself, depending upon geographics in the nation, was anywhere from, say, $250 to maybe $1,000.
[01:41:11.840 --> 01:41:15.840]  And most of them are done by loan size.
[01:41:15.840 --> 01:41:20.840]  Now, remember, you have title insurance, which is a separate line item that you'll see on your good data,
[01:41:20.840 --> 01:41:23.840]  on your settlement statement, rather.
[01:41:23.840 --> 01:41:30.840]  And then, of course, there's all these other fees like, you know, environmental fees, EPA charges, tax service fees.
[01:41:30.840 --> 01:41:35.840]  And these are just additional items that they charge for shuffling paper.
[01:41:35.840 --> 01:41:37.840]  So those can vary by state.
[01:41:37.840 --> 01:41:39.840]  They can vary by transaction.
[01:41:39.840 --> 01:41:47.840]  Some lenders limit the amount of fees that the title agents or the closing agents can charge because they're charging them.
[01:41:47.840 --> 01:41:54.840]  Sometimes we've seen it where the same item gets charged by the lender and the closing agent for whatever reason.
[01:41:54.840 --> 01:41:57.840]  And, of course, that's, you know, you double the thing on the same fees.
[01:41:57.840 --> 01:42:01.840]  And they'd both be providing the same service, and you're both being charged for it.
[01:42:01.840 --> 01:42:06.840]  But if you don't have the time to read the documentation and you're being shuffled through the assembly line
[01:42:06.840 --> 01:42:12.840]  and you sign off on it and you don't say anything about it, they figure, well, it's okay.
[01:42:12.840 --> 01:42:13.840]  It's not okay.
[01:42:13.840 --> 01:42:14.840]  It's obviously not okay.
[01:42:14.840 --> 01:42:18.840]  What do you know about junk fees?
[01:42:18.840 --> 01:42:20.840]  Junk fees.
[01:42:20.840 --> 01:42:23.840]  Junk fees are exactly that.
[01:42:23.840 --> 01:42:26.840]  They're the cotton candy of the origination world.
[01:42:26.840 --> 01:42:32.840]  There's a way to make money that is not tied directly to the lender.
[01:42:32.840 --> 01:42:34.840]  Now, I'll give you an example of this.
[01:42:34.840 --> 01:42:41.840]  If you're a bank and you're working for the bank, remember, you're on the boat that the captain of the ship is driving.
[01:42:41.840 --> 01:42:43.840]  It's a large institution.
[01:42:43.840 --> 01:42:47.840]  They usually have set parameters on what you can charge and what you can't charge.
[01:42:47.840 --> 01:42:51.840]  Now, there are some, depending on the bank and institution, there are some leeway with that.
[01:42:51.840 --> 01:42:56.840]  When you're a originator, you're a broker, there are a lot more fees that you can charge.
[01:42:56.840 --> 01:43:02.840]  And it's basically if you can get away with it and they'll sign for it, go ahead and charge it.
[01:43:02.840 --> 01:43:08.840]  But if they complain about it at the closing table or they don't want it, you know what?
[01:43:08.840 --> 01:43:10.840]  Go ahead and I'll take it off there.
[01:43:10.840 --> 01:43:13.840]  If you ask really high, you can always come down.
[01:43:13.840 --> 01:43:16.840]  If you never ask for those fees, you'll never get them.
[01:43:16.840 --> 01:43:19.840]  The problem with that is they have nothing to do with your loan
[01:43:19.840 --> 01:43:24.840]  because they're designed by nature to generate revenue.
[01:43:24.840 --> 01:43:26.840]  I mean, as we talked about at the beginning of the program,
[01:43:26.840 --> 01:43:31.840]  is the individual who's taking your application wants to get paid.
[01:43:31.840 --> 01:43:36.840]  And one of the ways they get paid is with these junk fees.
[01:43:36.840 --> 01:43:37.840]  Wonderful.
[01:43:37.840 --> 01:43:38.840]  Okay.
[01:43:38.840 --> 01:43:40.840]  We have one more segment.
[01:43:40.840 --> 01:43:45.840]  This is Randy Kelton, Deborah Stevens, Eddie Craig, U of LA Radio.
[01:43:45.840 --> 01:43:47.840]  We're talking with Nick Binning.
[01:43:47.840 --> 01:43:50.840]  When we come back on the other side, it'll be the last segment.
[01:43:50.840 --> 01:44:19.840]  So if you have any comments or questions, call in 512-646-1984.
[01:44:19.840 --> 01:44:20.840]  We'll be right back.
[01:44:49.840 --> 01:44:55.840]  Or call 1-866-497-7436.
[01:44:55.840 --> 01:45:00.840]  After you use Centrition, you'll believe in supplements again.
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[01:46:00.840 --> 01:46:29.840]  Music playing.
[01:46:29.840 --> 01:46:32.840]  Okay, this is Randy Kelton.
[01:46:32.840 --> 01:46:36.840]  This is Eddie Craig, Rule of Law Radio.
[01:46:36.840 --> 01:46:44.840]  And I was informed on the break there will be no more segments.
[01:46:44.840 --> 01:46:48.840]  From now on, we'll have segments.
[01:46:48.840 --> 01:46:53.840]  So I'm being taught to be more articulate.
[01:46:53.840 --> 01:47:01.840]  Anyway, back to Nick, and junk fees is one of my favorite issues
[01:47:01.840 --> 01:47:06.840]  because in the suit that we've crafted,
[01:47:06.840 --> 01:47:12.840]  we found something peculiar about these fees.
[01:47:12.840 --> 01:47:22.840]  In the suit, we make the accusation that the lender charged all of these junk fees.
[01:47:22.840 --> 01:47:28.840]  These fees for which there was no documentation showing that they were authorized by law
[01:47:28.840 --> 01:47:32.840]  were not otherwise excluded from being charged,
[01:47:32.840 --> 01:47:36.840]  as it's written in the Real Estate Standard Procedures Act,
[01:47:36.840 --> 01:47:41.840]  that the services supposedly billed for were necessary,
[01:47:41.840 --> 01:47:43.840]  that the amounts charged were reasonable,
[01:47:43.840 --> 01:47:51.840]  and that the lender didn't take a markup on the amounts charged by the vendor.
[01:47:51.840 --> 01:47:54.840]  So we claim all of them are bogus.
[01:47:54.840 --> 01:48:01.840]  Every single fee is improper because there was no documentation to support it.
[01:48:01.840 --> 01:48:06.840]  And then we say, well, if you provide the documentation to prove up the fees,
[01:48:06.840 --> 01:48:12.840]  well, we'll take it off the claim against you.
[01:48:12.840 --> 01:48:16.840]  Got any idea how many fees were proved up?
[01:48:16.840 --> 01:48:17.840]  Zero.
[01:48:17.840 --> 01:48:19.840]  Zero.
[01:48:19.840 --> 01:48:23.840]  They don't dare prove up the good ones
[01:48:23.840 --> 01:48:28.840]  because it will create the adverse inference
[01:48:28.840 --> 01:48:35.840]  that the ones not proved up were in fact false fees charged by the lender
[01:48:35.840 --> 01:48:40.840]  for the purpose of generating extra funds that they could use
[01:48:40.840 --> 01:48:48.840]  to pay the broker under the table in excess of the 1% origination fee they're allowed
[01:48:48.840 --> 01:48:52.840]  in order to induce the broker by bribery
[01:48:52.840 --> 01:48:57.840]  to breach his fiduciary duty to the lender by upselling the note to the lender.
[01:48:57.840 --> 01:48:59.840]  Absolutely.
[01:48:59.840 --> 01:49:02.840]  Never once have they addressed that issue.
[01:49:02.840 --> 01:49:07.840]  Rule 12th dismissed, RESPA doesn't count,
[01:49:07.840 --> 01:49:10.840]  the cookie cutter complains, everything else.
[01:49:10.840 --> 01:49:14.840]  Nobody has ever touched one of those.
[01:49:14.840 --> 01:49:21.840]  That's my favorite part because if there is one bogus fee in there,
[01:49:21.840 --> 01:49:26.840]  gotcha, Read the State Settlement Procedures Act on rescission,
[01:49:26.840 --> 01:49:34.840]  the last thing it says, if after foreclosure you can show more than $35
[01:49:34.840 --> 01:49:44.840]  expenditure to the originator undisclosed right to rescind renews.
[01:49:44.840 --> 01:49:50.840]  Nobody's touched it because they don't dare.
[01:49:50.840 --> 01:49:54.840]  Absolutely.
[01:49:54.840 --> 01:49:57.840]  You know, junk fees, I'm sorry, go ahead.
[01:49:57.840 --> 01:49:59.840]  No, go ahead, I was stopping.
[01:49:59.840 --> 01:50:04.840]  I was going to say, when it comes to junk fees, those are,
[01:50:04.840 --> 01:50:09.840]  I think it's important for everyone to understand, these junk fees are really,
[01:50:09.840 --> 01:50:12.840]  I hate to say regulated because that's the wrong word,
[01:50:12.840 --> 01:50:16.840]  but the allowances for them really are at the controls of the lender.
[01:50:16.840 --> 01:50:22.840]  If I put in a fee that I want the Mickey Mouse Club fee in there to beat $800
[01:50:22.840 --> 01:50:26.840]  and the borrower says, well, I love Mickey Mouse, I'd be glad to pay that fee,
[01:50:26.840 --> 01:50:29.840]  the lender looks at it and says, no, we don't allow Mickey Mouse fee,
[01:50:29.840 --> 01:50:32.840]  that's a junk fee, that's not right.
[01:50:32.840 --> 01:50:37.840]  So if there are any fees, the system is actually designed,
[01:50:37.840 --> 01:50:43.840]  you talked about systemic fraud, it's designed to allow a lot of these fees
[01:50:43.840 --> 01:50:50.840]  that go through either by indifference or categorically allowing them to be charged.
[01:50:50.840 --> 01:50:53.840]  Whether they're right or wrong, they make no determination of that
[01:50:53.840 --> 01:50:55.840]  other than what their own rules are.
[01:50:55.840 --> 01:50:58.840]  So in many cases where they say, you can charge a flood service fee,
[01:50:58.840 --> 01:51:01.840]  meaning that the broker would charge the flood service fee,
[01:51:01.840 --> 01:51:05.840]  but I'm going to charge the tax service fee, that's designed,
[01:51:05.840 --> 01:51:07.840]  it's actually hardwired into their system.
[01:51:07.840 --> 01:51:12.840]  When they get into these gray areas on, well, it's a loan discount fee.
[01:51:12.840 --> 01:51:15.840]  Well, a loan discount by nature is supposed to do what?
[01:51:15.840 --> 01:51:18.840]  It's supposed to discount your rate.
[01:51:18.840 --> 01:51:22.840]  Well, if the broker is getting fees on the backside from the lender,
[01:51:22.840 --> 01:51:25.840]  that most of the time aren't disclosed on there,
[01:51:25.840 --> 01:51:29.840]  or they're a line item way down on the bottom that says POC,
[01:51:29.840 --> 01:51:33.840]  means paid outside closing, if you ever see that on your settlement statement,
[01:51:33.840 --> 01:51:38.840]  it says maybe $3,400 or $10,000, it says POC.
[01:51:38.840 --> 01:51:43.840]  In most cases, that is an instance where the lender is paying the borrower,
[01:51:43.840 --> 01:51:47.840]  I'm sorry, the lender is paying the broker money for doing that loan.
[01:51:47.840 --> 01:51:51.840]  Now, if I'm charging a discount fee, I'm not discounting that.
[01:51:51.840 --> 01:51:53.840]  That doesn't go to the lender.
[01:51:53.840 --> 01:51:57.840]  That discount goes to the originator, the broker, the loan officer,
[01:51:57.840 --> 01:52:02.840]  for giving you a rate that's supposed to be discounted from the rate sheet.
[01:52:02.840 --> 01:52:03.840]  It's not.
[01:52:03.840 --> 01:52:06.840]  It's just discounted from what rate I told you you were going to get.
[01:52:06.840 --> 01:52:09.840]  And if I can charge you and get away with it, the lender doesn't care,
[01:52:09.840 --> 01:52:12.840]  because, well, you charged it for them, they agreed to it,
[01:52:12.840 --> 01:52:15.840]  you told them it was discount, who are we to go ahead
[01:52:15.840 --> 01:52:19.840]  and determine whether that's the correct rate or not?
[01:52:19.840 --> 01:52:24.840]  But they still control the valve on whether that's the right fee or not,
[01:52:24.840 --> 01:52:26.840]  whether they allow it.
[01:52:26.840 --> 01:52:29.840]  So some fees are junk fees that are sanctioned,
[01:52:29.840 --> 01:52:33.840]  and some junk fees are not sanctioned, and it's all at the lender's side.
[01:52:33.840 --> 01:52:36.840]  So ultimately, rounding it all the way back,
[01:52:36.840 --> 01:52:40.840]  it comes back to the lender's determining what fees are right
[01:52:40.840 --> 01:52:44.840]  and what fees are wrong, and that makes them liable.
[01:52:44.840 --> 01:52:53.840]  So if I went to the lender and asked them what fees were not sanctioned,
[01:52:53.840 --> 01:52:58.840]  and they gave me a list of what fees are not sanctioned,
[01:52:58.840 --> 01:53:04.840]  and then I look on the HUD-1 settlement statement,
[01:53:04.840 --> 01:53:10.840]  and I find a fee in there that cannot be supported by documentation
[01:53:10.840 --> 01:53:14.840]  or a fee that's obviously a junk fee,
[01:53:14.840 --> 01:53:22.840]  then I can go to the lender and say, well, you sanctioned this,
[01:53:22.840 --> 01:53:25.840]  so you're directly responsible for it.
[01:53:25.840 --> 01:53:27.840]  Theoretically, yes.
[01:53:27.840 --> 01:53:29.840]  In practice, absolutely not.
[01:53:29.840 --> 01:53:33.840]  You'll never get a list, because in many cases,
[01:53:33.840 --> 01:53:39.840]  the training was so haphazard for closers, the people drawing the documents,
[01:53:39.840 --> 01:53:42.840]  the people who are funding the documents.
[01:53:42.840 --> 01:53:46.840]  I mean, they were hiring people with a pulse that would show up
[01:53:46.840 --> 01:53:48.840]  to actually train them to draw these documents,
[01:53:48.840 --> 01:53:50.840]  and they knew nothing about the mortgage industry.
[01:53:50.840 --> 01:53:52.840]  They knew nothing about what they were doing.
[01:53:52.840 --> 01:53:54.840]  Okay, that's even better.
[01:53:54.840 --> 01:54:01.840]  If they don't give me a list of fees they didn't accept,
[01:54:01.840 --> 01:54:09.840]  then the presumption is any fee that anyone decided to put on the HUD-1
[01:54:09.840 --> 01:54:15.840]  settlement statement, the lender accepted without question
[01:54:15.840 --> 01:54:23.840]  and breaches fiduciary duty to protect the borrower from these false fees.
[01:54:23.840 --> 01:54:25.840]  They're stung either way we go about it.
[01:54:25.840 --> 01:54:26.840]  Right.
[01:54:26.840 --> 01:54:30.840]  And let me draw a perfect line from one to the other.
[01:54:30.840 --> 01:54:34.840]  And with many closings, you would get a preliminary HUD-1
[01:54:34.840 --> 01:54:38.840]  that states that this is what your transaction is going to look like,
[01:54:38.840 --> 01:54:40.840]  meaning that if you have to bring a check for $10,000,
[01:54:40.840 --> 01:54:43.840]  your closing amount is, you know, you're 20% down.
[01:54:43.840 --> 01:54:48.840]  And then your final HUD-1, if you have both of those in your file,
[01:54:48.840 --> 01:54:52.840]  you just set them down on the table, look at them one by one, go line by line,
[01:54:52.840 --> 01:54:58.840]  and you'll find fees that are in there that were set up for the closing
[01:54:58.840 --> 01:55:00.840]  that either made it or didn't.
[01:55:00.840 --> 01:55:03.840]  It doesn't matter which one, final or preliminary,
[01:55:03.840 --> 01:55:05.840]  if you have fees on one and not fees on the other,
[01:55:05.840 --> 01:55:08.840]  that draws a direct line on what they're either trying to get away with
[01:55:08.840 --> 01:55:12.840]  or what they did get away with.
[01:55:12.840 --> 01:55:13.840]  Interesting.
[01:55:13.840 --> 01:55:16.840]  That'll be a nice analysis to do.
[01:55:16.840 --> 01:55:22.840]  I already have planned into the system multiple truth and lending statements.
[01:55:22.840 --> 01:55:26.840]  Can you address good faith estimates and truth and lending statements?
[01:55:26.840 --> 01:55:31.840]  Truth and lending is one of the major places that we make fraud claims.
[01:55:31.840 --> 01:55:33.840]  Right.
[01:55:33.840 --> 01:55:35.840]  They go hand in hand.
[01:55:35.840 --> 01:55:38.840]  A good faith estimate, the truth and lending draws its information
[01:55:38.840 --> 01:55:40.840]  from the good faith estimate,
[01:55:40.840 --> 01:55:44.840]  which draws its information from that original application
[01:55:44.840 --> 01:55:48.840]  that you sat down with the bill loan officer and gave them their information.
[01:55:48.840 --> 01:55:51.840]  We're going all the way back to the beginning of the show
[01:55:51.840 --> 01:55:55.840]  when you sit down and this person is taking this information from you
[01:55:55.840 --> 01:55:58.840]  unless that is a complete application,
[01:55:58.840 --> 01:56:02.840]  you're going to find flaws in the type of transaction
[01:56:02.840 --> 01:56:06.840]  and the best product for you because, let's face it,
[01:56:06.840 --> 01:56:08.840]  if I go to the doctor and I say,
[01:56:08.840 --> 01:56:12.840]  well, I'm fine, Doc, and I don't tell you about the limp, what happens?
[01:56:12.840 --> 01:56:16.840]  If I fall down and break my leg because I had a limp,
[01:56:16.840 --> 01:56:20.840]  I'm not doing my responsibility as a loan officer.
[01:56:20.840 --> 01:56:24.840]  If I'm taking this application and not getting every single bit of information,
[01:56:24.840 --> 01:56:26.840]  that is on that application,
[01:56:26.840 --> 01:56:31.840]  because everything on that application relates directly to being credit worthy
[01:56:31.840 --> 01:56:33.840]  and getting the best possible product,
[01:56:33.840 --> 01:56:35.840]  it's garbage in, garbage out,
[01:56:35.840 --> 01:56:37.840]  and you'll see it on your good faith estimate.
[01:56:37.840 --> 01:56:39.840]  You'll see it if they re-disclose.
[01:56:39.840 --> 01:56:41.840]  You'll see it on your closing documents.
[01:56:41.840 --> 01:56:43.840]  It's not that hard.
[01:56:43.840 --> 01:56:44.840]  You follow the paper training.
[01:56:44.840 --> 01:56:47.840]  You start it from the beginning and get to the end,
[01:56:47.840 --> 01:56:48.840]  and you'll find these variances,
[01:56:48.840 --> 01:56:53.840]  and these variances will trigger mechanisms that people will remember.
[01:56:53.840 --> 01:56:55.840]  They'll say, well, okay, I applied for a 6% loan,
[01:56:55.840 --> 01:56:59.840]  and then the guy called me up and told me I got 8%, and I didn't know why.
[01:56:59.840 --> 01:57:01.840]  Well, that right there is something to look at,
[01:57:01.840 --> 01:57:06.840]  and that's somewhere to look at those documentation that you have in your file
[01:57:06.840 --> 01:57:09.840]  and try to remember what happened at that point,
[01:57:09.840 --> 01:57:12.840]  because I guarantee you someone either made some money on it
[01:57:12.840 --> 01:57:14.840]  or something went wrong with the loan,
[01:57:14.840 --> 01:57:16.840]  and they never bothered to tell you why,
[01:57:16.840 --> 01:57:18.840]  and then they try to tear on you into the deal.
[01:57:18.840 --> 01:57:24.840]  That is one of the most common complaints that I hear,
[01:57:24.840 --> 01:57:27.840]  is I thought I was getting this interest.
[01:57:27.840 --> 01:57:30.840]  When I got to closing, they changed.
[01:57:30.840 --> 01:57:32.840]  They said it was going to be this other interest.
[01:57:32.840 --> 01:57:34.840]  Correct.
[01:57:34.840 --> 01:57:39.840]  They pop you it on you at the last minute and tell you, well, take it or leave it,
[01:57:39.840 --> 01:57:43.840]  but by this time, you're so engaged in the process
[01:57:43.840 --> 01:57:49.840]  that you no longer have a viable option to walk away from the loan.
[01:57:49.840 --> 01:57:51.840]  That's absolutely true.
[01:57:51.840 --> 01:57:52.840]  They count on that.
[01:57:52.840 --> 01:57:54.840]  Oh, they all count on it.
[01:57:54.840 --> 01:57:56.840]  Definitely.
[01:57:56.840 --> 01:58:00.840]  This is part of what a structure is exactly,
[01:58:00.840 --> 01:58:07.840]  or at least enough information to indicate that when you got to closing
[01:58:07.840 --> 01:58:12.840]  and the numbers changed, it was engineered from the beginning to be that way.
[01:58:12.840 --> 01:58:14.840]  Absolutely.
[01:58:14.840 --> 01:58:15.840]  Okay.
[01:58:15.840 --> 01:58:16.840]  We are out of time.
[01:58:16.840 --> 01:58:18.840]  Thank you very much for a great show.
[01:58:18.840 --> 01:58:20.840]  This is going to be a great archive.
[01:58:20.840 --> 01:58:21.840]  Thanks for having me.
[01:58:21.840 --> 01:58:26.840]  I'm going to have to listen to it several times just to come up to speed.
[01:58:26.840 --> 01:58:27.840]  Okay.
[01:58:27.840 --> 01:58:30.840]  This is Randy Kelton, Deborah Stevens, Eddie Craig, Rule of Law Radio.
[01:58:30.840 --> 01:58:35.840]  We'll be back tomorrow night with our four-hour info marathon.
[01:58:35.840 --> 01:58:38.840]  Thank you all for listening.
[01:58:38.840 --> 01:58:43.840]  And get your fingers warmed up for calling in tomorrow.
[01:58:43.840 --> 01:58:47.840]  We hope to have a busy night.
[01:58:47.840 --> 01:59:13.840]  Thank you all for listening and good night.
[01:59:17.840 --> 01:59:44.840]  Thank you.
[01:59:44.840 --> 01:59:59.840]  Thank you.