Hey D.C. here,

Here’s today’s question of the day from Don.

Q: What is a straw buyer?

A: A straw buyer is a person who purchases real property
on behalf of another person. A straw buyer is used when
the real buyer cannot complete the transaction for some
reason.

Mortgage fraud is an epidemic that still continues to be
around even after the past few years that we have been
through. It can take form in many different ways whether
it be foreclosure rescue schemes, illegal flipping to straw
buyer scheme. Property flips are not inherently illegal and
not all transactions involving a rapid purchase and resell
are improper.

Straw buying is used in buying homes, where the real buyer
of the property may have poor credit and is unable to obtain
a loan. The real buyer promises to make all the payments and
may compensate the buyer for the use of his or her credit.
Straw buyers are loan applicants used by fraud perpetrators
to obtain mortgage and are used to disguise the true buyer
or the true nature of the transaction. In this case, there
is a mortgage loan on the property and the payments are made
by an entity or person other than the borrower. In some
cases the property is transferred to the straw buyer then it
is rented out to the homeowner who sold the property.

The straw buyer may be a friend, family member or even a
stranger. On an average the straw buyer is paid between
$5,000 to $15,000 to sign the paperwork using his name and
personal information to secure the loan. This individual
has no intention to live in the property or make payments on
the home.

There are many individuals that are involved in this kind of
transaction. Some of them are a realtor, a seller, a
homebuyer, a straw buyer and a mortgage broker. So how does
the straw buyer scam work?

The real estate agent sells the home to a buyer that does
not have good credit and cannot obtain a loan. So the
realtor convinces a different buyer (the straw buyer) to
purchase the home that is in foreclosure and offers him or
her thousands of dollars as a compensation for the use of
their name and credit. The straw buyer then qualifies for
the loan and closes on the property all the while assuming
that the real buyer of the property is going to be making
payments.

Once the real buyer defaults on the payments, it is the
straw buyer(s) credit and that will be ruined. The property
will go in to foreclosure and will have a negative effect on
the other houses in the neighborhood.

That was a great question! I hope my answer gave you
a detailed description of what a straw buyer is.



Thanks for another great session of Ask DC.
Keep those
 questions coming and I’ll keep the
information rolling!



Until next time,



DC



P.S. Module 1 of my Foreclosure Investing System 
has
great advice and detailed training that will help you
 reach
your goals in the shortest amount of time.

Members—make sure you don’t skip this one!



Not a member yet? What are you waiting for?

Click here to get started.



If you want to share this valuable information, forward
it on
to your friends and colleagues. If you have 
comments,
leave them on my blog. 



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Join my Facebook Fanpage and let’s chat:

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Hey DC here,

We’ve had a lot of requests for a replay of last night’s
webinar.. We won’t be having a replay but we will notify
you when I do this training again so you can get on live.

Now for today’s Ask DC- Question of the Day…

I got this question from Susan:

“Hey DC, Can you answer this question for me? What does it
mean to strategically walk away from your home?”

Ok Susan, here is the deal. This is a process by which
homeowners that can afford to continue making their monthly
payments, make a calculated financial decision to default on
their mortgage in order to get out from under the home if
the property is underwater.

This is a decision by a homeowner to stop making payments on
a debt despite having the ability to make the payments.
Many homeowners are using this method where they actually
force the lender to either foreclose or modify the loan.
This is also called Strategic Defaults.

There are many reasons why a homeowner chooses to default on
their mortgage. One of the reasons is that the property’s
value have dropped so much since the borrower bought it that
the unpaid portion of the loan is sometimes greater than the
current value.

Then there is the moral issue. When the lending fraud was
uncovered, many borrowers felt that they had been cheated.
Because of this they feel that they do not need to honor
their end of the deal and keep paying on their loans.

Borrowers do not have to be in default to qualify for a
short sale. When a homeowner is strategically defaulting on
their mortgage they typically are paying their other
obligations, such as car loans and credit cards.

Many homeowners who strategically default on their mortgages
go from a straight from a perfect payment history to no
mortgage payments at all. This is different from a
homeowner who cannot afford the payments and who tries to
keep paying on their mortgage even after they have fallen
behind.

They are also concentrated in negative-equity markets where
home values zoomed during the boom. This is the most common
reason why a homeowner chooses to default on their mortgage.
Strategic defaults are going to continues to be an ongoing
issue for many lenders and the real estate market with no
relief in sight.

As much as 80% of Americans think that defaulting on a
mortgage is immoral if you can afford to pay. By keeping up
with the mortgage payments you are helping preserve
neighborhood property values and supporting the broader
economy.

It is important to understand that you need to be aware of
whether or not your borrower is strategically walking away.
My negotiators are trained to look at bank statements and
determine whether or not the homeowners are hiding money or
strategically walking away. They can help you learn how to
determine whether or not your homeowners are trying to walk
away, whether it be by analyzing bank statements or reading
the hardship.

That was a great question! I hope my answer gave you an
understanding of what it means to strategically walk away
from your home.

Thanks for another great session of Ask DC. Keep those
questions coming and I’ll keep the information rolling!

Until next time,

DC

P.S. Module 1 of my Foreclosure Investing System
has great advice and detailed training that will help you
reach your goals in the shortest amount of time.
Members—make sure you don’t skip this one!

Not a member yet? What are you waiting for?
Click here to get started.

If you want to share this valuable information, forward
it on to your friends and colleagues. If you have
comments, leave them on my blog.

Can’t wait until the next email?
Join my Facebook Fanpage and let’s chat:
dcfawcett.com/facebook

Hey D.C. here,

Aside from the Patriots losing the Superbowl, I had a great
weekend. Tyler, Sarah and I went to Monster Jam Saturday
night. Tyler loved it. Grave Digger won… again. He has
more wins than any other truck in history. There were more
wrecks than I’ve ever seen before. It was crazy. I hope you
had a great weekend as well.

It’s important to get some quality R&R time on the weekend.
That is the biggest benefit to being in business for
yourself. You get to create your own schedule and do what
you want, whenever you want. Time spent with family and
living the life you want is more important than the money.

I’m very excited. I’m just putting the finishing touches
on a brand new training for you. I’m teaching 100% of this
training. I’m going to show you how you can win in business
and have your own publishing business that runs without you
so you can be free to do what you want, whenever you want.

During this week’s training, I’ll show you How to Build an
8 Figure Information Publishing Business from Scratch… even
if you’re NOT an Expert at ANYTHING at all!

I’ve never revealed these secrets before and you are going
to be let into the inner sanctum of online information
publishing.

Register for the Training Here:
www.dcfawcett.com/go

This training will be live and there will NOT be a replay.
You must attend live to discover this cutting edge
information.

Over the past 3 years, I became one of the biggest real
estate publishers by growing from 0 to 3 Million per year.
This did not happen by accident and I promise I will show
you how I did it step by step.

If you’ve always wanted to have an online business, an
information publishing business, or a seminar business but
didn’t know how to get started, this training is for you.

If you’ve ever had this thought:
“I’m not an expert at anything. I can’t get into the
publishing business.”

I urge you to attend this webinar because you’ll discover
you don’t need to be an expert yourself to be in the highly
profitable information publishing business.

Sign up Here:
www.dcfawcett.com/go

Talk to you on the training,

DC

PS: This is not a webinar where I’m promoting some
affiliate program. This strategy is actually 10 times more
profitable than affiliate marketing. I’m teaching 100% of
this live training. No Replay.

Join me Here:
www.dcfawcett.com/go

Ready for another round of Ask DC?

Here’s a question that just came in:

Q: Will the homeowner have a deficiency once the home has
been short sale, in other words will the banks go after the
homeowner for the balance? – from Earlene

A: Each lender will address the deficiency judgment issue
differently as well as each state has different laws when it
comes to debt forgiveness. The lender will either issue a
1099 or they will reserve the right to proceed to recover
the deficiency amount.

Deficiency judgments stem from the fact that a borrower
defaulted on the note and not the mortgage. A promissory
note is a promise to pay. Depending on how it is written it
can also provide for personal liability. This means that
the lender can come after your assets if you do not make
your payment.

The promissory note is secured by a mortgage. The mortgage
is recorded in the public records where the property is
located. This gives the public notice that the home has a
lien on it. If the promissory note is not paid as agreed,
the lender has the right to foreclose on the property.

A deficiency is the difference between the principle balance
due and the amount received. Whether the bank can pursue a
deficiency judgment after a short sale depends in part on
whether or not the seller is personally liable for the debt
and the other part is whether or not state law says that the
lender can pursue for deficiency.

A non- recourse loan does not allow the lender to pursue
anything other than the collateral. These types of loans
create the most risk for lenders because they can only
collect the home. Once the short sale has gone through, the
lender cannot take further legal action against you.

A recourse loan allows the lender to pursue for the amount
that you owe, even after they take the home. The lender can
garnish your wages and levy your bank accounts to collect
the amount that you owe.

The state laws dictate whether or not the loan is a recourse
or non-recourse. Every state has their own rules when it
comes to deficiencies and whether or not they can pursue for
the money.

Short sales are an excellent way for a homeowner to avoid
foreclosure. Knowing the law for each state is important
when negotiating short sales. The laws are changing each
and every day and the mitigators that I have on staff know
how to get around the deficiency judgments or negotiating a
payment that the homeowner can afford.

That was a great question! I hope my answer gave you insight on a homeowners position in the short sale process.

Thanks for another great session of Ask DC. Keep those questions coming and I’ll keep the information rolling!

Until next time,

DC

P.S. Module 1 of my Foreclosure Investing System has great advice and detailed training that will help you reach your goals in the shortest amount of time.
Members—make sure you don’t skip this one!

Not a member yet? What are you waiting for?
Click here to get started.

If you want to share this valuable information, forward it on to your friends and colleagues. If you have comments, leave them on my blog.

Can’t wait until the next email?
Join my Facebook Fanpage and let’s chat:
dcfawcett.com/facebook

Or follow me on Twitter

Hey D.C. here,

I got this question from Joe other day:

“Hey DC, Can you answer this question for me? When do I start talking to the homeowner of an identified short sale target? How do I get around the listing realtor to talk directly to the homeowner?”

Ok Joe, Here is the deal. If the property is already listed with a realtor, then you have to contact the realtor. While the sellers may feel comfortable showing you around their home, most of them do not want to discuss the terms of an offer directly with a buyer.

Many sellers do not feel comfortable talking about the offer; they do not want to bypass their agent, simply because the agent offers a seller knowledge, experience and a fiduciary relationship. The sellers trust their agent.

Remember that not every seller knows about real estate and they may have been taken advantage of by a mortgage broker or realtor at one time. They may be very cautious and unsure of the situation.

Once you have spoken to the realtor and they agree to move forward, the ultimate goal is to secure and introduction and meeting with the seller. At this meeting you will be able to explain the short sale process and thus in turn obtain the sellers agreement to move forward.

It is important to create an environment that is open for questions and concerns. So preparation for questions and concerns is important. Let them know that your process delivers a solution for their seller and that it will get their property sold.

People in foreclosure are inundated with mailers and calls, so the investor who can answer the seller’s questions and make him feel good will likely get the seller’s trust and ultimately the deal.

It is important to understand the mindset of the homeowners who are facing foreclosure. Foreclosure lands a huge blow to a person’s sense of personal security. They become scared and anxious about their future. They worry about finding a place to live and providing a safe stable environment for their family.

They also have feelings of self doubt, embarrassment and shame. Many times this prohibits them from contacting lenders and other sources. They feel that they have lost control of their lives and it leaves them with a feeling of helplessness and depression.

These reasons are why many sellers choose to list their homes with a realtor. They feel a sense of security when they have a realtor who is looking out for their best interest. By having a realtor that represents their interest, it will filter out the people that are unscrupulous and are trying to take advantage of them.

I have developed proven ways to work with the realtors and the sellers. I have developed scripts to assist you in speaking with realtors in getting an appointment with the seller. I have proven techniques to get the realtors and sellers on board with the short sale process. The trick to succeed is to gather a team who can jointly support you in assisting the seller through this process.

To ensure that you are speaking to the realtor and seller correctly, you need to have the appropriate tools and you need to dedicate time for training.

That was a great question! I hope my answer gave you insight on how to work with listing realtors and homeowners.

Thanks for another great session of Ask DC. Keep those questions coming and I’ll keep the information rolling!

Until next time,

DC

P.S. Module 1 of my Foreclosure Investing System has great advice and detailed training that will help you reach your goals in the shortest amount of time.
Members—make sure you don’t skip this one!

Not a member yet? What are you waiting for?
Click here to get started.

If you want to share this valuable information, forward it on to your friends and colleagues. If you have comments, leave them on my blog.

Can’t wait until the next email?
Join my Facebook Fanpage and let’s chat:
dcfawcett.com/facebook

Or follow me on Twitter

Hey D.C. here,

I got this question from Harry other day.

“Hey DC, Can you answer this question for me? Can you give
me tips for putting together a great short sale team? I am
in the process of getting into the real estate industry
doing short sales, but as I understand you need a good team
to be successful in this industry.”

Ok Harry, here is the deal. You need to have a team that
has knowledge, desire, dedication and talent or you cannot
be successful. To build a good team you need people with
expertise in your field, who are eager to learn and who are
ambitious about making money.

First you are going to make a list of the characteristics
you want in your employees/referral parties and evaluate
people on how well they fit your needs. You are going to
want to hire an applicant that sells himself to you, which
will indicate how well they will sell your service or
product.

You are going to need a support team and an acquisition
team. The members of your team are going to be the
Realtor, Title Company and the Short sale negotiator.

The support team could be fellow investors, a coach,
business partner or a mentor. Share your goals with your
support team. When you surround yourself with other
motivated people they will be there to help you succeed and
they will give you the support when you need it the most.

The acquisition team is your solid team that assists you
with all the parts of the transaction. They can assist you
with identifying a property that is a good candidate for
short sale, analyzing to come up with an offer price,
inspection of the property, negotiations for the short sale
and fund the transaction.

You are going to want to ask the realtor if they are real
estate investors. If not, then they should be. They
should be able to guide them much better and you can ask
them questions to learn how they think and act as
investors.

For the title company, you are going to want to interview
them and make sure that they are able to handle an investor
driven short sale. Not all title companies are able to
handle these types of transactions. Go into the title
company and interview them. Take a copy of your disclosures
and let them review the paperwork. They will be able to
give you guidance.

For the short sale negotiator, you are going to want to have
someone who is informed about what is going on in the
industry and be able to work with the lender to come up with
an acceptable offer.

By using my negotiator, you are already started building
your short sale team. They have a proven track record. They
have developed relationships with the lender and understand
how the process works. They know how to structure a package
so that it makes it to the negotiators desk quicker.

Want to get more tips like this every day?

Join my Facebook Fanpage and let’s chat:
dcfawcett.com/facebook

Talk soon,

DC

P.S. Module 1 of my Foreclosure Investing System
has great advice and detailed training that will help you
reach your goals in the shortest amount of time.
Members—make sure you don’t skip this one!

Not a member yet? What are you waiting for?!
Click here to get started.

Hey D.C. Here,

I got this question the other day.

“DC, I am negotiating a short sale, but the lender denied
my offer because the seller does not have a hardship. I was
shocked and dumbfounded. Can you go over some reasons for
defaulting on a loan?”

My response:

Bankers don’t care what causes people to default on their
mortgages. Approximately 80% of US Mortgages issued to
subprime borrowers were Adjustable-rate mortgages. As ARM’s
began to raise so did the delinquencies.

While in 2007 through 2009 we saw people losing their homes
to foreclosure due to the subprime mortgages. They are the
people who took out a loan to purchase a property that they
could not afford. They looked at these loans as a way of
saving money, but did not think ahead for when the interest
rate rise and the payments doubled.

Now we are seeing defaults on mortgages for different
reasons. These reasons stem from the economy, the loss of
jobs, mandatory pay reductions and property damage and
repairs.

14 Million Americans remain unemployed in the US. In the
month of August the Bureau of Labor Statistics reported that
the economy created zero, yes that is zero jobs for the
entire month.

These are not statistics, these are people. Families
struggling to put food on the table, send their kids to
school and keep the lights on. The loss of a job can have a
profound effect on the emotional well being. It is a cycle
that includes denial, anger, frustration and eventually
adaption.

Many homeowners who are facing a job loss are in denial.
Many homeowners who are having difficulty do not want to
talk about foreclosure or what they are going to do to get
out of it. As an investor it is important to be sympathetic
to their emotions and educate them about their options.
They do not want to admit that they are going to lose their
home.

Many companies instead of laying people off are reducing
their pay. This creates a hardship for many homeowners.
While they are still employed they have to make changes to
their budget and even after they make changes to it still
may not be enough. They are still working the same amount of
time, but not making enough money to support their
household.

This situation can be very stressful and embarrassing for
the homeowner. You need to approach the homeowner with
compassion. Let them know that you are the solution to
their problems. Many homeowners see investors as
untrustworthy. Homeowners have been taken advantage of by
loan officers who may have sold them an Adjustable Rate
Mortgage.

Many homeowners who have lost their jobs or had mandatory
pay reductions have tried to cut costs in an effort to keep
their homes. One of the first things that they do is not to
keep the property in good condition. They let the home
become in disrepair. With home values plummeting, this also
decreases the value of the home even more.

As a real estate investor this is an important thing to look
at. Typically the banks will not pay for repairs. Many
short sales are sold “As-Is”. The bank does not care about
the repairs that the property needs they just care about
getting market value for that home. You can use this as a
negotiating tactic.

It is important to make sure that the repairs are serious.
Obtain at least 2 bids from licensed contractors. Many
homes are older and will need some updating, but typically
the carpet and paint are only cosmetic and the banks will
not look at these items as being serious.

Want to get more tips like this every day?

Join my Facebook Fanpage and lets chat:

dcfawcett.com/facebook

Talk soon,

DC

P.S. Got a question you’d like me to answer on the next
“ASK DC”?

Ask me here and I might answer it for you in the next issue.

Hey D.C. here,

I wanted to talk about why it’s good to work with investors
because a question recently came in about this.

They asked: “Why is it good to work with real estate
investors?”

Here is the deal…

Investors are purchasing more now then ever. Current
housing conditions have made it easy for many people to
choose investing as a second career and they are successful
at doing it.

You have to add value to the services you provide. You need
to set yourself apart from the competition.

You as an investor have created a better opportunity that
the transaction will close. Investors speed up the process
and provide more flexibility in the deal if there are
problems that are encountered along the way. You need to
stand out from other real estate professionals by learning
about your clients and their needs. You need to develop a
“How can I help” mentality. By developing this mentality,
you will build a more meaningful and solid relationship with
the realtors that you want to work with.

You are also giving a solution for the seller. By selling
to an investor, the property will be sold and the debt will
be settled. The investor is buying the home As-Is, so the
seller will not have to make costly repairs to the home. It
reduces the homeowners reduce their stress and ease the
process of selling the home.

You will be giving the Realtors that you work with a return
on their time.

We all know that time is our most valuable asset. If
Realtors are working on short sales for their clients then
they will realize the value in not spending time on the
phone with the lenders. Realtors need to do what they do
best and that is selling homes. By negotiating for them on
their short sales, you are giving them back their time to
increase their business by working on revenue generating
opportunities.

Investors know how to negotiate with junior lien holders,
tax liens, homeowners’ association liens and they can pay
them in the transaction.

Many realtors do not know how to negotiate multiple liens.
As an investor you know how to structure the deal when there
are multiple liens and the first lender will only allow the
other lien holders can get $1,000.00- $2500.00. This is
valuable knowledge and without this knowledge, 90% of their
deals will be declined by the lender.

Partnerships with real estate investors can be very
lucrative for a realtor. With the right direction and
partnership, real estate can be a great and profitable
opportunity for all parties involved.

Want to get more tips like this every day?

Join my Facebook Fanpage and lets chat:
dcfawcett.com/facebook

Talk soon,

DC

P.S. Got a question you’d like me to answer on the next
“ASK DC”?

Ask me here and I might answer it for you in the next issue.

Hey D.C. Here,

I got this question from Walter other day.

“Hey DC, I know that if I want to make money, I need to start making offers on short sales.  How do I find a realtor who is investor friendly?”

Here’s my answer:

In this market, real estate investors are still closing on deals.  Many investors are willing to work with anyone that can bring them deals.  Investors have a much defined set of criteria that must be met before they are going to enter into a contract to purchase a property.

Investors are very different types of buyers than retail buyers.  What many realtors struggle with is that investors will not pay more than 60% -65% or below current market value. If the property needs work, the investor will reduce their price by the amount of repairs that the property needs.

Investors who have been around are very knowledgeable and are willing to listen if a deal makes sense. Realtors and agents often need a period of time where they can get used to working with each other and figure out each other’s wants and needs.  Investors want to do several deals.

Investors are known for thinking “outside of the box”.  They are can come up with non-conventional solutions for solving problems.  Many Realtors think that some of the techniques that investors utilize are either unethical or illegal. It is important that you learn about investors and how they do business.  Just because you may not understand their strategy does not mean that it is illegal.  An investor will buy a property today, if not from you, from somebody.

I’ll be covering our latest advanced strategies at our upcoming Accelerated Wealth Summit February 16 – 19. This will be a place where you can “think outside the box”.

I will also be covering how to make huge profits with homes in foreclosure or headed for foreclosure.  If you have my Deluxe VSSI system, your admission has already been paid for and you were sent an email to reserve your seat. Make sure you fill out that form so we can save your seat. We cannot guarantee you a seat for late reservations.

I’m doing my live event in February to start your year off with a bang. I’m not one of those guys that runs around the country speaking at other speaker’s events. This is your opportunity to come hang out with me and my coaches for 4 days in the best environment of like-minded investors in the country.  2012 is going to be the best year you’ve ever had in real estate.

Go here to see what the attendees of my last event had to say about it:

www.vssivip.com/fwsndc

Talk soon,

DC

P.S. If you think you qualify to attend this event for free because you already invested in one of our systems that includes 2 tickets to the event, please contact us at 800-764-8064 or email support at support@dcfawcett.com and we will take care of your registration for free.

Hey, D.C. Here,

Up to 9 million homes may enter foreclosure between the 2011 and
2013 period, versus one million in a typical year. This will
send shock-waves through the stock markets and world
economy.

It may as well be the “dark ages” for homeowners and lenders
alike…and the wave of mortgage re-sets will continue in a
relentless onslaught…with no mercy!

This can equate to 500 billion in lender losses…

The ARM’s, Option ARM’s, Subprime and Alt-A will be the main
casualties – but the contagion will spread into the prime
classes too.

The “Too Big to Fail” banks are under the gun for the shady
practice of “robo-signing,” which covers a wide range of
foreclosure paperwork abuses. This serious “mess” has
launched massive legal probes around the country, including
an investigation led by an angry hive of state attorney
generals which reportedly could end up costing banks upward
of $20 billion in settlements to ripped-off foreclosed
home-owners.

The big lenders will be in the “hurt locker” and desperately
seeking investors willing take distressed residential and
commercial.

As you know, 60% of all Option ARM and ALT-A mortgages that
were originated in the “Sand States” – California, Nevada,
Arizona, and Florida began to adjust in 2011. And I’ve got
news for you…

It’s not over yet by a long shot…

This year in 2012, it’s going to go through the roof, impacting the
entire nation with pre-foreclosure and foreclosure activity.
Many of the major lenders will hold vast amounts of toxic
foreclosures…and are on the edge of extinction. They are
doing a wild spin into C-, D- and finally E- credit ratings
– and that’s end-game.

This massive shift has created a huge opportunity for real
estate investors in 2012. Now is the time to tap into this
gold rush… and join my exclusive Accelerated Wealth Summit
event – showing you exactly how to do it.

Savvy investors will have an incredible amount of “low
hanging fruit” waiting for them as “super-deal” investments…
when the banks beg investors to take the HUGE property
surplus off their hands.

I’ll be covering our latest advanced strategies at our
upcoming Accelerated Wealth Summit February 16 – 19.

I will also be covering how to make huge profits with homes
in foreclosure or headed for foreclosure. If you have my
Deluxe VSSI system, your admission has already been paid for
and you were sent an email to reserve your seat. Make sure
you fill out that form so we can save your seat.

We cannot guarantee you a seat for late reservations.

I’m doing my live event in February to start your year off
with a bang. I’m not one of those guys that runs around the
country speaking at other speakers events. This is your
opportunity to come hang out with me and my coaches for 4
days in the best environment of like-minded investors in the
country. 2012 is going to be the best year you’ve ever had
in real estate.

Go here to see what the attendees of my last event had to
say about it:

www.vssivip.com/fwsndc

Talk soon,

DC

P.S. If you think you qualify to attend this event for free
because you already invested in one of our systems that
includes 2 tickets to the event, please contact us at
800-764-8064 or email support at support@dcfawcett.com and
we will take care of your registration for free.