11/10/2023
11/04/2023
Another Bank Bites the Dust 2023
Another bank bites the dust. This is bad news.
The fifth bank to be shut
down in 2023.
A Siouxland bank has closed after suffering heavy losses on loans not previously identified, according to Iowa banking officials.
Banks are required
to file financial regulatory reports with the OCC. These reports must
include:
- The bank's financial condition
- The results of its operations
- Risk exposure
Banks are also required to file
Consolidated Reports of Condition and Income also known as a Call Report.
This report includes:
- A balance sheet
- An income statement
- Supporting schedules
- Details on assets, liabilities,
and capital accounts
- Details on income and expenses
Banks must file the Call Report as of
the close of business on the last day of each calendar quarter.
Trucking and some farm equipment loans went non paying when interest rates rose this year. The bank was ordered to hire a Special Loan Consultant in thirty days to manage the workouts on these bad loans. The bank failed to correct it's problem and the hammer came down.
Citizens Bank in Sac City was legally shut down Friday November 3rd, 2023 at 4:00 by the Iowa Division of Banking (IDOB).
As part of the closure
by IDOB Superintendent Jeff Plagge, the bank was placed into the receivership
of the Federal Deposit Insurance Corporation (FDIC).
The release states that bank examiners “identified significant
loan losses that had not previously been identified by the bank” while
conducting an examination of the bank. Call reports were not accurate. Officials
said Citizens Bank had a “concentration of out-of-territory and out-of-state
loans to one industry” and then suffered heavy losses from some of those loans.
The bank has since been declared insolvent.
All deposit accounts have been purchased and transferred to Iowa Trust & Savings Bank, Emmetsburg. At the time of shuddering Citizens Bank had one main office and drive-up facility.
Iowa Trust
& Savings Bank now holds the deposits.
As of its third quarter call report,
Citizens Bank reported
$65,558,000 in total assets
and $58,930,000 in total deposits.
The bank was declared insolvent. The bank had a concentration of out-of-territory and out-of-state loans to one industry and incurred heavy losses on some of those loans.
Bad loans on Auto Loans, Recreational Vehicle Loans,
HELOC s, Home Improvement Loans, Personal Loans, Mortgage Loans to Investors, Agriculture loans to farmers
for equipment and livestock, and Commercial loans.
FDIC
insures qualified deposits to $250,000.
10/31/2023
California Probate Rules
CALFORNIA Probate Rules
Probate hearings in California are
held in the Probate Department of the Superior Court in the county
where the decedent lived at the time of their death. The petition
should be filed at the Superior Court office located in the county in which the
decedent resided. This can be found on the county of record’s website.
Every county provides the blank fillable forms needed. This is not a simple
process, and the forms need to be correct, or the judge will delay your process. The forms may be hand written if legible- print very carefully. All documentation submitted by pdf must be clear and readable.
The Probate Department handles
decedents' estates, trusts, and conservatorships. It also hears petitions
to establish fact of birth, death, and marriage as well as elder abuse
petitions.
·
Probate time limits:
In California, executors or
administrators of estates have one year to complete probate. However,
extensions can be requested when delays occur. The probate process
generally takes 12 to 18 months.
·
Probate not necessary if under this
dollar amount total:
Probate is not necessary if the total
value of the assets at the time of death does not exceed $166,250. This
figure does not include vehicles and certain other assets. Since real estate property in California is high cost, many families/heirs find they will need to go through probate. You will need a copy of any mortgage payment on the real estate and HOA bills.
·
Hearing dates:
The court could set a hearing date 15
days after the petition is filed. However, most probate courts set
hearings between 30 and 45 days from filing. Some courts still allow virtual
hearings, see your county website.
·
Notice requirements
Notice must be given by first class
mail or by personally delivering a copy to each person or entity at least 15
days prior to the hearing. Each person should receive a copy of the
"Notice of Petition to Administer Estate" showing the hearing date
information.
·
Factors for attorney's fee
Rule 7.955(b) of California Rules of
Court contains a list of factors courts may consider in determining a
reasonable attorney's fee. These factors include the experience,
reputation, and ability of the attorney performing the legal services, and the
time and labor required.
Initial
filing fee for a probate case in California is $435.
Additional
fees
- Petitions: For the
appointment of a personal representative, objections to petitions, or
other court filings
- Copies: To certify copies of
court documents
- Notice: To publicize probate
notice
Fee waivers If you can demonstrate in
writing financial hardship, you can apply to the court for a fee waiver.
Attorney fees California is one of a
handful of states that allows attorneys to bill according to a percentage of
the total value of the estate. For example, lawyers can collect 2.5
percent in fees. The executor of the estate can claim the same fee.
10/21/2023
Sub-to Get Rich Candy Cigarettes
You are thinking of investing in real estate. It seems impossible to get in while rates are so high. These gurus keep advertising they have the secrets to success and your American Dream. Come smoke the candy cigarettes.
OKAY I'm going to list things to make this easy:
Why a Realtor needs to be cautious.
Why a seller needs to ask deep questions.
Almost 99% of Assumable loans have conditions to be met to allow the assumption.
Assuming a loan can take 60-90 days and the buyer is on their own without any help.
In a normal loan process there is a loan officer who vets the paperwork and assists with letter writing.
Servicers are not making money. Many have been taken over and merged due to market troubles.
For a lender to generate a new loan it costs $10000-$12000 in vendor and employee processing.
Servicers are not allowed to charge any processing, underwriting or all the vendor fees unless there
is a fee noted in the original promissory note.
Servicers work for trustees who own the note, the trustees can tell servicers to slowly turn down assumptions due to cost. Sometimes there are several trustees to get the nod from.
Generally the person doing subject to has low income/self employed showing no income and thinks this is the golden goose to buy real estate.
Pace Morby and Grant Cardone display themselves as driving Lamborghinis when they don't own one.
Pace's class costs $5000 initial for nothing, then another $5000 for the real candy cigarettes. There are his minions in the class who cheerleader to "help" lay people become "rich quick investors."
There is no such thing as due on sale insurance, do not be bamboozled.
Managing real estate is HARD. I've built and operated 91 properties, it takes skill to find the LOCATION, the cash flow, the tenant who doesn't die, get divorced, or flake... construction costs keep rising and though I was licensed contractor and built houses for Lennar nothing is easy. There is great financial risk, blisters on your hands, and worry.
Gurus say that after the half way point in an amortization schedule more is paid to principle and this is the secret sauce. Well sure it's nice but you still need to be able to make the principle interest taxes insurance and HOA monthly costs. None of these buyers understand the concept, it just sounds sweet. The buyer will not know anything about the actual promissory note or amort schedule until they close and some never get the note. Sellers rarely have a copy in a box. They need to order all the riders and note from the servicer.
Assuming a VA loan causes a hardship for the seller. Seller loses a percentage of his eligibility to purchase.
Agents are responsible to disclose this to seller and there are forms to sign. Rarely does the agents even get the seller to sign the forms because they don't know.
With a VA loan if the sub to goes bad the agents are liable.
Never ever do a sub to with a protected class. If seller is elderly which is often the case the heirs or the seller can come back and sue the agents and buyer for causing harm.
Trustee or servicing attorney is going to come after you with:
Accusations of Forgery, Bank Fraud, Wire Fraud,
Financial Schemes, Identity Theft, Concealment,
Mail Fraud, RICO Act, Equity Skimming,
violation of the Consumer Protection Act, and Money Laundering. Buyer needs a nice $40000 checking account to front the attorney fees at $400 an hour. Each court appearance will cost $9000.
Heirs will claim you defrauded the 'old guy.
Veteran is eligible for free legal aid.
Seller sells for higher price and agents win larger commission, all sounds great BUT when the buyer fails to pay they cannot sell as the value is not there.
Cost to foreclose is minimum of $100000. if buyer doesn't fight it. During that time period of a year or three no payments are made and the lender jumps in and forecloses, seller loses everything.
Lender foreclosing on seller's credit harms them for seven years. It shows long after the loss.
Insurance is very dangerous. Adding "buyer" to policy State Farm, Farmers, Allstate, Mercury and Chubb all deny these claims. The real estate is not covered at all. Roof damage, it's on you and tenant won't pay for uninhabitable home.
Changing insurance to buyer name alerts the servicer/lender in days. The loss payee notice to servicer/lender sends the file to a different division to be tracked. Often they put forced place insurance at four times the cost in the seller's name to cover the lender. Therefore buyer will pay for two policies at exorbitant cost.
Insurance right now is a nightmare. Any state that had disasters the underwriters are or already have put moratoriums on writing new policies. It's 98% likely buyer is going to need new insurance. The insurance agents do not want to write policies where the title is funky and there is a sub to because it entangles them in lawsuits.
Changing title in any way is a sale, excepting a FAMILY TRANSFER DEED. It is fraud to lie on the transfer deed. It's a transfer deed and servicer/lender gets a copy thus notifying or triggering. Transfer deed makes the property taxes increase in the months ahead. Buyer might not be able to afford the jump.
The gurus claim that buyers don't need title insurance. They joke about condoms, yes really in the seminars. However when it comes time to sell or the are forced to refinance because servicer called the note the title is a nightmare mess. If the seller is still alive and willing to play ball maybe they can get a notary to the seller to fix the transfers. Often the buyer puts the title in a LLC which they never keep current with the Secretary of State in the state where they registered. The buyer who doesn't have good credit to qualify for a loan isn't always the best with paperwork.
These guru classes cost $5000 -$10000 which would be better spent on down payment and trips to the library where the same information is available for free.
IF things go bad the seller cannot get a modification or forbearance which were offered in 2021.
When the servicer finds out they often dump the loan off in groups to the real nasty servicers like SPS.
Seller bankruptcy notice 99% goes to servicer. The bankruptcy court requires seller to disclose every loan on their credit report. If seller lies to the court they can be thrown out. Bankruptcy notice halts receiving payments and accelerates many extra costs. Buyer can get stuck with an additional $20000- $50000 in legal fees that the servicer imposes.
When seller dies and heirs go to probate, the probate court also notices the servicer. Payments are halted, fees incur.
The 1098 interest form goes to seller. Seller cannot re-assign the 1098. Buyer can't legally claim the interest unless the seller contracts with a collection servicer for a fee of 15% who acts as intermediary. These middle men are not that timely in handing over monthly payments and late fees incur and show on seller's name. Buyer cannot prove he made timely payments if they ever go to get a loan.
Most Realtors involved in these do not know RESPA laws and find themselves advising without a NMLS license. There are fines and jail time. Do not ever talk about rate, terms, payments...
Most licensed loan officers don't want to risk getting in the middle of this and the company they work under forbids it.
Sure it sounds honky dory to get a 2.75% mortgage and seller carries 100% but the property will never cash flow in California or any high cost state.
Why would servicers want to subsidize investors to do sub-to? They do not. They would rather see a new loan in the portfolio fully qualified at 7.5% where the machines make money.
Now coming out of the 2008 shadows are the apps that advertise listings claiming the interest rates are two percent without an APR or any truthful details. You've seen them... With Roam is one that got Venture seed funding of a million five. This app searches recordings and assumes the rate on FHA and VA loans without really knowing any of the terms. They charge $5500 nonrefundable to help a buyer find these deals. The broker Steve Bintz is licensed in thirty states so he uses his license to advertise listings claiming to have the secret sauce to get buyers in. The app then charges a one percent finders fee/ brokerage fee for leading buyers to holy water. The app has no particular connection with the Servicer or Trustee, they don't know what paperwork is required, they don't actually process anything. However they do charge the money. On their website they display rates:
They are not licensed to advertise interest rates for residential mortgages, but they do. Reminds me of all the modification shops that cropped up out of the cracks of 2008- those guys got fined and went to jail.
I know of eleven current cases in California and Arizona where servicer called the sub to note in September 2023 so servicers and trustees are finding recourse. Several of these buyers never could qualify and there is not enough equity to sell. Servicer refuses to short sale and puts up fraud accusations. This trend is a moving target. We will see how it unfolds.
Caroline Gerardo,
NMLS# 324982
(949) 784-9699
apply here:
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