With a high number of foreclosures still haunting homeowners, Jason Hartman and Chad Ruyle, principal and co-founder of YouWalkAway.com, discuss strategic defaults, homeowners’ rights, understanding the foreclosure process, and how homeowners can use the law to their advantage when their mortgage is in default. When should you walk away? How can you minimize foreclosure consequences?
Chad R. Ruyle has been interviewed by journalists for CBS 60 Minutes, ABC Nightline, The Today Show on NBC, Dylan Ratigan, and NBC Nightly News with Brian Williams to name a few. Ruyle is also a partner at the Law Firm of Ruyle& Ruyle in San Diego and has incorporated his extensive legal background into YouWalkAway.com. He sees mortgage defaulting as a business transaction not an emotional decision. Mortgage contracts are written with addressing potential foreclosures – clearly stating if the borrower ceases to make payments, the bank will take the house back. Ruyle focuses his practice on all areas of trusts and estates, business planning, and real estate transactions.
Be sure to also visit the Members section for guests such as Brian Tracy, Garrett Sutton, and Jim Rogers!
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ANNOUNCER: Welcome to Creating Wealth with Jason Hartman! During this program Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing: fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it! And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.
JASON HARTMAN: Welcome to the Creating Wealth Show, and Merry Christmas to all! This is Jason Hartman, your host, your real estate reporter, talking on topics of a broad variety, and interviewing guests from around the world, of course. So, today we have an interesting show again. Episode #233 here. Because we’re going to talk about the downside of investing. But if you followed my plan—and the plan of many others, it’s not just my plan—oddly enough, nowadays we really live in an upside down world, don’t we? We live in a world where the seemingly good behavior gets punished, and the seemingly bad behavior gets rewarded. And this show will really delve into that, and how it has happened, and continues to happen, in the world of real estate. And how you can play on the right side of that fence. It’s just like saving money.
I mean, think about it. Before 1971, the best thing to do, when we were on a gold standard, was to save money, was to save for a rainy day, defer gratification, delay gratification. Whereas nowadays, and since ’71, in many ways, the argument could be made, and made correctly, depending on exactly what you’re talking about, that the thing to do today is to spend more. And to have gratification today, rather than saving. I know that sounds ridiculous, it sounds irresponsible. But when you really drill down on these issues, what you find is that so many times, our societies are rewarding the wrong behaviors. So the question that each of need to ponder, and need to decide in our own financial lives, in this era of ridiculousness, this era of criminal behavior at every level of our financial system, where we have a game that is rigged—how are we going to play the game in order to win? When we have this type of behavior all around us, we cannot be this innocent little doe out there, or we are going to get slaughtered. We have got to wise up, we’ve gotta toughen up, we’ve got to realize and internalize the fact that again, just irresponsible, criminal behavior at every level of our financial system. The question is, how do we play the game? What do we do about it?
And, to kind of start this segment off, I want to play you a 10-minute clip, before we go to our guest today, of a guest who has been on the show before. And it’s Catherine Austin Fitts. She was on one of my favorite radio shows, Coast to Coast, and she was interviewed on there by George Noory, and it was a great show, great segment, and I just don’t think I could say this any better myself. Again, I think Catherine Austin Fitts is a very interesting person in the financial world, with her take on things. Just an extremely unique outlook on it. I also think Dan Ammerman, and I also think, well, not to pat my own back, but yours truly has an interesting take on it as well.
So, I want to play this little clip. It’s about 10 minutes long, and it’s just a clip from the radio show Coast to Coast that was aired publicly. And then I want to play—I’m gonna come back on, and I want to play you another very short clip that’s less than two minutes, where you’ll hear some of our regulators talking about Fannie Mae and Freddie Mac, before most of the problems were discovered. And just how incredibly ridiculous—I mean, it’s so ridiculous that you’ve just gotta think it’s a cover up. Just can’t be anything else. I mean, these people, you gotta ask yourself, can they really be that naïve? I mean, maybe they can. I don’t know. Maybe it’s just naivety, neglect, or maybe it’s something worse; it’s willful, and it is really mal-intent. So, we’ll get to that.
But I want to make sure that you are joining us at January 7th at our Creating Wealth Boot Camp in Phoenix, Arizona area. Well, actually, Tempe, Arizona. That will be at the Hyatt Place Hotel. We got a special group room rate for only $89 per night, and I went and looked at the site with our area coordinator just the other day, and we both liked it, and so we decided to try out this new location. You do not need a rental car, because it is right near the Phoenix airport, and they have an airport shuttle. Or you can just take a quick taxi, but I’d take the airport shuttle, because it’s free, and I think you’ll really enjoy this event. And then Sunday morning at 10AM, we’re having a tour of Phoenix properties. Now, this will be kind of an informal tour. We’re not renting a big diesel bus again like we did last spring for our Phoenix tour, but we will have a tour. And I think you’ll really enjoy seeing some properties. Since we’re actually doing the boot camp in one of our markets, we will have two of our local market specialists there. They will both speak on Saturday to talk to you about what you can see on Sunday, and you can really look at properties, meet their management teams, and everything like that. So, I think you’ll really enjoy it.
And by the way, I’ve gotta say it, because I can tell my voice is cracking—excuse my voice. I’ve been fighting a cold, and the cold was winning, but now I think I’m winning. You never appreciate your health as much until you lose it for a while. But I’m feeling better, but the voice is lagging, so excuse that. But let’s go to this clip. So, here’s the structure of this show. I’ve got this clip, about 10 minutes long, then I’ve got another clip that’s less than two minutes, and then I want to go to our guest, who is an attorney with a group called You Walk Away. Just talking about options, and how leverage was rewarded and is still rewarded, and because all of us need to realize, and you know, this is just my own thinking on this, is that we never really own our real estate. Because all real estate in the United States, and in most places around the world, has a perpetual lien on the property, even if you pay off the mortgage. You may have a homeowners association, of course, which has a perpetual lien. But you always have what? You know what I’m thinking, right? Property taxes, as a perpetual lien on the property.
So, again, two things I want you to notice about Catherine Austin Fitts here, is, when she talks about criminal behavior in our financial system, and then the other thing she says, as it gets into this little clip that I’m going to play, she talks about turning America into renters. Well, that’s really good news for us as real estate investors, isn’t it? Turning America into renters. So, I think you’ll get a lot out of this. It’s an interesting clip.
And by the way, not to jump around here too much, but the Creating Wealth Boot Camp—be sure to register for that at www.jasonhartman.com, and it’s got all the hotel information as well as a special link where you can register online for a discounted room rate, or the phone number where you can call them. So, let’s go to this little clip, and I will be back right after it. Again, this is about 10 minutes, so I will be back right after that.
GEORGE NOORY: As I reported at the top of last hour, more Americans than ever are showing a willingness to simply walk away from their underwater homes, according to a recent survey now. An underwater home, the house is worth less than the mortgage, so, people who were having trouble making their payments simply say adios, I’m gone. We’re gonna talk with Catherine Austin Fitts about that this hour, in just a moment, on Coast to Coast AM. Catherine Austin Fitts, you know her, she’s a regular here on Coast to Coast AM. Former US Assistant Secretary of Housing, and Federal Housing Commissioner, her website’s www.solari.com; she advocates permaculture, getting communities to do localized banking and food processing and everything else. Here she is, on Coast to Coast AM. Catherine, blub, blub, blub! Our houses are underwater, huh?
CATHERINE AUSTIN FITTS: Yeah. Well, mine is [LAUGHTER].
GEORGE NOORY: Everybody’s is. So what do we do? Well, are we gonna walk away from the mortgage? What do we do?
CATHERINE AUSTIN FITTS: Well, you know, I think, George, there are a couple different fact patterns. But one group of people are walking away from their mortgages because they don’t have the money to pay. I mean, they really just don’t. If your income has dropped to significantly below what your mortgage payment is, I mean, it’s simple math: you can’t pay, because you don’t have it. So, some people are walking away literally because they don’t have it. Other people are walking away, George, because their house is so underwater. That means their mortgage is worth more than their equity’s value. And they’re having to make difficult choices. If they stay and pay their mortgage, they’re gonna eat through their retirement savings, or they’re gonna aggregate other obligations to family, to themselves. And what’s interesting is, there’s a third group that sort of crosses over with that. And other people, George, who can afford not to walk, and normally they’d never have walked. You know, they really say, look, I made a contract, I’m gonna keep it. What’s happening is, they are either watching or dealing with so much criminal behavior on the part of the servicers, that they’re just saying, I don’t owe these guys anything. This is criminal enterprise, I want nothing to do with it, I’m getting out.
GEORGE NOORY: Yeah, I can’t sell my house and make money anyway, so I’m leaving. Right?
CATHERINE AUSTIN FITTS: But I think, you know, I think part of it is, for some of these people, it’s a political statement. In other words, you know, there’s nothing they can do [unintelligible] political statement, but one of the political statements they can do is they can just walk on their mortgage. And I’m—you know, I have to tell you, as a former assistant secretary of housing, the day is come when that’s an ethical statement, depending on who your mortgaged with.
GEORGE NOORY: Are the commercial real estate owners doing the same with their commercial property? The small strip malls, and things like that?
CATHERINE AUSTIN FITTS: I suspect they are. I’m not as up to—I’m not as current as to what’s happening in the commercial. But the commercial guys have always been pretty, you know, pretty business—mathematically oriented. So, they’re the one to walk if it’s good business. Now, one of the things we haven’t heard a lot of, George, and I’m still sort of waiting for this shoe to drop, which is decisions [unintelligible] judgment. It really depends—it’s a state by state issue, but in states where [unintelligible] walks, the short fall, the bank has the right to go after you for the short fall. And you know, we haven’t heard much about that. But it wouldn’t surprise me if that sort of raises its head. So, it’s a very complex—it depends on your unique fact pattern, whether it’s economically sensible to walk or not. So, for example, my mortgage is underwater. I have no plans of walking, because it wouldn’t make sense for me, for lots of other different reasons.
GEORGE NOORY: Well, most states have a walk away rule where the banks can’t get you—you just simply walk away, don’t they?
CATHERINE AUSTIN FITTS: Well, I don’t know what number of states there are where you’re protected against the banks coming after a deficiency judgment. I don’t know what the count is. But certainly that’s what we’re seeing so far, is most subscribers that I talk to, my subscribers in the states that they’re in, you know, they’re not—their accountants will say, don’t worry. Now, here’s the thing that’s very frustrating if you are either underwater or close. You can’t refinance. There’s all sorts of things you can’t do. The servicing, George, and my mortgage has been sold four times, and every time it’s sold, I swear to you, I think the new servicer is trying to get me to default! I mean, it’s—we have set up a whole series of procedures to make sure they can’t default in the first couple payments, and we end up usually paying with—I end up usually paying the mortgage twice in at least the first or second payment, just to make sure they don’t default. And you know, they’re trying!
GEORGE NOORY: And you know what’s also unfortunate, Catherine? The person who does make their payments gets penalized. Let me give you an example. They’re got a first mortgage for 5%. They’ve got a second mortgage that they took out a long time ago, and ate up a lot of their equity, but maybe they needed the money, for 10%. And now they want to refinance it. The house is underwater. They make their payments. The bank or the mortgage company says, we’re not going to do it. You’re underwater. We just won’t do it. But you continue to make your payments. They would at least negotiate somewhat if you were in default, wouldn’t they?
CATHERINE AUSTIN FITTS: Well, there’s some funny thought patterns. Because people who tried to negotiate really got put through the ringer in some cases. I was just talking with an attorney I know who’s handling a very significant number of foreclosures, and in a variety of different fact patterns, and I swear, George, even the things that are getting reported into me—you know, it just seems like they’re trying—they’re trying to throw as many things into default as they possibly can. Now, I keep being told that, you know, it’s all giant incompetency. You know, the servicers are in over their heads, or they don’t have [unintelligible]. You know, at some point, George, it just doesn’t hold water. So you really get a sense of a long term effort to convert America back to rentals. It’s—you know, it’s very, very strange. It doesn’t make economic sense. And the reality is, given what’s happened with the bailouts from the Fed, the banks really aren’t on the hook for any of this stuff. In one sense they’ve been refinanced out. So, we’re in a situation where nobody’s acting economically rational, because of the way the financing is set up, where it was the initial financing and securitization or the bailout, you know, the incentives are very conflicting, [unintelligible], certainly not—don’t have a goal of optimizing the equity in the home, or the equity in the community. Because make no mistake about it—when you have this level of foreclosures, you really harm the total real estate equity in a community.
GEORGE NOORY: Oh, absolutely. Senior vice president of RealtyTrac, which monitors foreclosures, says that the mortgage rates, the adjustable rates, are going to be reset upward over the next 12-15 months, adding, he says, an average thousand dollars to monthly mortgage payments on homes that are already 30-50% less than their original sales price.
CATHERINE AUSTIN FITTS: Well, here’s the question, because we’ve had—the King Report last week called it a 28-year bull market in the bond market, and I think that’s a fair description. You know, the bond market has been a safe haven and performs well relative to many other classes for quite some time, and we see interest rates come down. I know you and I get on the line and we say, can they come down any more? And then they do. So we’ve really reached through to the end of that sort of historic period in the bond market. And the problem, George, is the bond market is a huge market. And so, if money’s gonna move out of the bond market to other things, it’s quite a deep shift. And what it means is, a lot of players who had the benefit of interest rates dropping, are now going to be struggling with interest rates rising. And of course, residential real estate, and people with adjustable rate mortgages, are first in line. And even if you’re—even if you have all of your mortgage paid off, and you own your home, it’s gonna hit—it’s gonna hit home values. So, a rising interest rate environment, which is probably what we’re coming into, is gonna be, you know, is gonna be a one two punch in housing, on top of everything else that’s happened.
GEORGE NOORY: What’s happening with credit scores these days, Catherine?
CATHERINE AUSTIN FITTS: I don’t—you know, I haven’t looked at what the numerical scores are, but I think they’re falling. Because you literally have one segment of the population that’s experiencing falling incomes and rising expenses. And so, there’s no way their credit scores can hold. Now, we see a lot of debt being paid off. Or debt levels dropping. But I think a lot of that, George, is because people are walking away or not paying. So, I think defaults are making a contribution to that, but you know, what I’ve seen, which is so interesting, is people who can afford to keep paying their mortgage but are walking away and saying, I don’t care what my credit score is, because I really—I’ve had it with the whole system. So, there are real issues about the credibility of the system, and that’s, you know, that’s causing people to—I don’t care about what my credit score is. I really don’t. It’s just, I’m not gonna fall into that trap. So, if you look at how I organize my finances, it’s a different kettle of fish. But I think there’s real—you know, there’s real deep distrust of the system.
JASON HARTMAN: Okay, well, wasn’t that interesting, though? Some of the things she said, she and George said, were very interesting there. Now I want to play you a little clip, and I’m doing this one live, this is not spliced in, so pardon the variance in audio quality. But it’s really short. It’s a YouTube video talking about how our idiotic leaders, one of them being Maxine Waters, from California, my formerly home state, which is like the band of idiots are running that state, it’s unbelievable. I know that most of you would agree with me, even if you live there. Still, I am so glad to be out. I can’t even tell you. But, they’re just defending Fannie Mae and Freddie Mac. It is unbelievable. Now, this video tries to make it kind of funny by repeating things, so, that is not a mistake, that’s not a technical glitch, when you hear them repeated over and over a couple of quick times in rapid succession, okay? So, here’s the clip. I’ll be back in less than two minutes.
MAXINE WATERS: Frankly, we were trying to fix something that wasn’t broke. That wasn’t broke. That wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac. We do not have a crisis at Freddie Mac. We do not have a crisis at Freddie Mac. We do not have a crisis at Freddie Mac. And in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Of Mr. Frank Raines.
GREGORY MEEKS: There’s been nothing that was indicated that’s wrong, you know, with Fannie Mae. Nothing that was indicated that’s wrong, you know, with Fannie Mae. Freddie Mac has come up on its own. The question that then presents is the competence that your agency has—and what would make you—why should I have confidence? Why should anyone have confidence in you as a regulator at this point?
MAXINE WATERS: Under the outstanding leadership of Mr. Frank Raines, everything in the 1992 Act has worked just fine. In fact, the GSEs have exceeded their housing goals. The GSEs have exceeded their housing goals. The GSEs have exceeded their housing goals. What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission, a mission that has seen innovation flourish from desktop underwriting—
JASON HARTMAN: Just a little comment there, from me. As Maxine Waters is talking about desktop underwriting, remember—I used to own, I’ve owned a couple of mortgage businesses, okay, over the years. And desktop underwriting? That was one of the ways that made it so easy to commit mortgage fraud. All of these “tools and advances” were a lot of the reason we had a mortgage crisis, in my humble opinion. Because it made it so easy for mortgage brokers who were getting commissions—I mean, all the incentives on the wrong side of the table here. No one was incentivized to put the brakes on these deals and to be prudent and careful. So, here’s the rest of the clip. And it’s almost over.
MAXINE WATERS: To 100% loans.
JASON HARTMAN: Oh, 100% loans. Huh, Maxine, that’s an innovation? Oh, gee. Brilliant. Yeah. But the point is, again, if the idiots are out there doing this, take what they have, use it responsibly, and there you go. Now here’s another brilliant guy, and I’m saying that of course sarcastically. A guy with no experience in banking, good old Barney Frank. Here he is.
BARNEY FRANK: But I have seen nothing in here that suggests that the safety and soundness are an issue. And I think it serves us badly to raise safety and soundness as a kind of a general shibboleth when it does not seem to me to be an issue.
FRANKLIN RAINES: These assets are so riskless—
JASON HARTMAN: This is Franklin Raines, the—well, in my opinion—crooked, or at least ridiculously overpaid guy that was running Fannie Mae. He was the chairman and CEO for a time, and you hear all these people. Here is this company, this government-sponsored entity, that is just doing terrible things, yet all of these people are saying, we shouldn’t talk about them, we shouldn’t cast a shadow on them, it’s ridiculous to regulate them more—and listen, I’m no fan of regulation. But I’m no fan of having a government-sponsored entity in the first place. Anyway, about 10 more seconds.
FRANKLIN RAINES: So riskless. So riskless. So riskless. That their capital for holding them should be under two percent.
JASON HARTMAN: So, Franklin Raines said it was so riskless, right? Yeah, unbelievable. So anyway, let’s get to our interview. Join us on January 7th, Hyatt Place Hotel, Phoenix airport, Tempe—technically it’s in the city of Tempe, but it’s right near the Phoenix airport. No need for a rental car. And we’ll look forward to seeing you January 7th. The boot camp will be all day Saturday. Who knows, maybe I’ll even join everybody for dinner if I’m not too exhausted from that event. And then we will have our tour on Sunday morning, so you’ll get to see some actual Phoenix properties that you can purchase. So we will look forward to seeing you there. Register at www.jasonhartman.com. We will be back in less than 60 seconds with today’s guest from You Walk Away, and have a Merry Christmas.
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JASON HARTMAN: It’s my pleasure to welcome Chad Ruyle to the show today. He is with YouWalkAway.com, and we are going to talk about the all-popular and interesting topic today of strategic defaults, and whether short sale makes sense, loan modification makes sense, foreclosure makes sense, and kind of what people are doing out there. Obviously all of you listeners know that people are very upset with banks and Wall Street right now, and I think rightfully so, and Chad is actually an attorney, and he started this site to help homeowners really understand their options. I think I’m describing that correctly, but I’ll let him do the rest. Chad, welcome! How are you?
CHAD RUYLE: I’m good! Thanks for having me on the show.
JASON HARTMAN: My pleasure. Tell us a little bit about your background, and how you came to get into this side of the business.
CHAD RUYLE: Well, my background is, I’m an attorney. And as an attorney, I get a lot of questions in all fields of the law. And around 2007, a lot of people were coming to me asking about their mortgage, and the foreclosure process, because there really wasn’t information out there; there weren’t attorneys or services out there to help them. So my business partner and I, Jon Maddux, we got together to start a site, the You Walk Away, to help these homeowners understand their rights and their options how to get through the foreclosure process in the best way possible. So, these people were spending a lot of money on attorney’s fees or fly by night company sites that really didn’t offer any sort of help, they just took money up front and promised to do things, promised to modify loans, and in the end, didn’t really perform their service.
JASON HARTMAN: Fantastic. So, there’s been a lot of, just a lot of litigation, a lot of upset people who hired loan mod firms—a lot of these were attorney-backed, they said, that’s sort of the way they said it—attorney-backed, you know, I’m holding up quotes as I say that, Chad. And some weren’t at first, and then there was a new law that was passed about charging upfront fees, and all this kind of stuff. Is there a difference between what you do, and those other loan modification firms?
CHAD RUYLE: Yeah. So, what You Walk Away does—we don’t deal with the bank, we don’t do loan modifications. What we primarily do is help the homeowner first understand what their options are with the information we provide them. So, what we provide is a You Walk Away kit that has all that information in there. It’s got form letters. We track their foreclosure, and give them an update as to what’s going on. Part of the service is they get an attorney consultation within the state that they’re in, and we are a nationwide company. And they also get a consultation with a CPA for tax advice on the tax ramifications. So, we essentially help the homeowner understand their options, and then in going through foreclosure, understanding their rights, the timing, the ramifications, but we also have a division that does short sales nationally as well. So we do help people with short sales. In regards to loan modifications, we don’t do them, we don’t deal directly with the bank. We just give information to the homeowner so that they understand if they should go that route, and if they do, what to expect, and what the process is like.
JASON HARTMAN: What is the sentiment of people out there nowadays? I mean, certainly all of our listeners now have heard of the concept of strategic default. Should people walk away? Is that the best thing to do? And when they walk away, what’s the right way to walk away? I think most walk aways are people living in their house for free for two or three years, and then they’re taking out everything including the kitchen sink and taking it with them.
CHAD RUYLE: Yeah. Well, we certainly don’t recommend that. There are some ramifications. But, yeah. In terms of the options, you know, first the homeowner has to decide, do they want to stay in the property or not. Is it something that’s sentimental, or location wise, their family is there, and there’s a difference in what we’ll talk more about, but is it an investment property versus owner occupied. Is it their residence. And so, they first have to decide, do they want to stay in the property or not. If they want to stay in the property, then that’s where the loan modification would come into play. Or if they could refinance; obviously most people aren’t able, because there’s not enough equity. So then there’d be—you know, they’d look at a loan modification. The loan modification is very difficult. The banks are just extremely difficult to work with. They’re very slow moving. It’s kind of a catch-22. You have to have enough income to show you can make the new payments, but you have to have little enough income that they want to work with you in lowering your payment, because obviously if you show too much income they’ll say, well, just keep paying this mortgage.
JASON HARTMAN: And a comment on that, Chad, is that nobody seems to know what the magic number is. It seems to be this secret, highly guarded underwriting criteria that only the people of the Bilderberg Group know. I mean it’s like absurd. Nobody knows what to do or how to qualify for a loan mod. It just seems like a big game.
CHAD RUYLE: Yeah, there’s really no magic number. Banks don’t even know themselves. Because each loss mitigation at each bank’s different, and it just depends on who you talk to. You know, I’ve seen all across the board, different types of loan modifications where in one case they would say, that doesn’t make sense, or we won’t allow that. And then, months later, the same thing they said they wouldn’t approve, they approve. So, yeah. With loan modifications, short sales, it’s just very difficult to deal with with the bank, because there’s just no logic there. And so, if the homeowner though decides to get rid of the property, then their option would be a short sale or foreclose on it. You know, go through the foreclosure process. So, the decision in that is really an effect on your credit.
So, there are certain ramifications of whether the bank can come after you for the difference or not. On short sales, the object is really to get the bank to sign off, to agree that they won’t come after you for the difference. And so, the short sale would be to help their credit. It’s much better than having a foreclosure on your credit. The process is that you know, someone would negotiate, like our company would negotiate a short sale with the bank, and so, if the property is only worth $200,000, and at the height it was worth $400,000, the loan was a 100% loan, like a lot of these, and it was $400,000, then you know, you’ve got that difference of $200,000 that has to be figured out with the bank. And so in that short sale process, the bank hopefully approves that new number or reduction in principal. The property’s sold, the bank takes that loss, homeowner is out of the property, and it’s less an effect on their credit. So, those are really the options. And again, depending on whether they want to stay or not, and what their end goal is.
JASON HARTMAN: Okay. So Chad, talk for a moment about if they wanna stay. So, say someone wants to stay in a property, and of course we’re talking about homeowners now, not investors, but I’d like you to maybe parse that up a little bit too, because there are some nuances that differ with investment properties versus your personal residence, right?
CHAD RUYLE: Yeah, so, I mean, whether they stay or not, I mean, the differences would be whether the bank has recourse, I mean particularly in California, Arizona, has similar laws, where if it’s your residence, and there’s a deficiency amount, in my example where the property’s worth $200,000 now, and the loan was for $400,000, that deficiency of $200,000, with a residence, there’s anti-deficiency rules, where the homeowner would not owe the bank that difference by law.
JASON HARTMAN: One distinction first, and that is providing it is a purchase money loan that has the deficiency, right? Because if that person refinanced, or put a second trust deed on the house, then it can be recoursed, is that correct? I just want to make sure people knew that.
CHAD RUYLE: Yeah, correct. But there could be a second that is a purchased money. A lot of these loans, they had a first they took, that the second was used towards the purchase. So yeah, if there’s a second that was not used towards the purchase, it was a home equity line, they pulled money out and used it for something else, then you’re correct, they’re not covered under the anti-deficiency statute.
JASON HARTMAN: So, the listeners should understand that a purchase money loan just means loan proceeds that you use to acquire the property. If you refinanced it, even in a state like California that is a non-recourse state, that loan then becomes a recourse loan, if you’ve refinanced. Right?
CHAD RUYLE: Yeah, correct.
JASON HARTMAN: Okay, wanted to make sure people knew that. Go ahead.
CHAD RUYLE: And so, that brings up a good point as well. So, we’re talking about the difference whether it’s an investor or it’s their residence, and so, there’s more protection for a homeowner that lives in it. But at the end of the day, what we’re really seeing is, you know, it’s a question of whether the bank will come after the owner for the difference. So, not talking law, we’re talking more of a reality. If the deficiency amount, and typically we’re seeing this where the first it’s been wiped out, or it’s wiped out the second, whether that second lien will come after the homeowner, and a lot of times we’re seeing the bank not do that, we’re seeing them charge it off, because the amount, the cost of them going through litigation, and the fees, are too much to try to recoup that difference.
JASON HARTMAN: Right, and Chad, that’s one of the things I’ve talked about in prior shows, because, and of course listeners, you’ve gotta be careful with this conversation here. You can’t hang your hat on this necessarily, okay? It’s just—
CHAD RUYLE: Oh, absolutely.
JASON HARTMAN: It’s just an opinion.
CHAD RUYLE: I’m just telling you a lot of the cases we see, but that’s not true every—in every instance. And that’s why I was gonna just follow up and say, it just depends on the bank, it depends on the loan, it depends on the amount that you owe, the deficiency amount.
JASON HARTMAN: Right, right. But here’s my question for you though, Chad. On that issue, if there really are seven million people either in or on their way to foreclosure, and say we have that many foreclosures, or some really high number, right, how would all of the banks sue all of those people? It’s just—as a practical matter, it’s just not going to happen. Now, the problem is, it may be you rather than your next-door neighbor. So, that’s why you gotta be careful. But here’s my question for you. How do you know that you’ve got a non-recourse deal? So, say for example, someone listening is in California. And it could be any state, but let’s just use them as an example. And say the statute here, or the law is, that it’s a recourse, because they have refinanced the property. Or say it’s in another state that is a recourse state, and they haven’t refinanced. So, it’s recoursed right away. So, you do a short sale, how do you know that the lender—it’s always kind of hanging out there, that maybe they have four years, possibly, to pursue the deficiency? Or two years, or whatever the thing is in that state—
CHAD RUYLE: Each state has a different statute of limitations on the recourse.
JASON HARTMAN: Right. So, how do you know they’re not going to pursue it? Even though they have the legal right to, how do you know? Now, you could have that in the paperwork, where you say, you and the bank agree that there’s no recourse. Of course that’s one way to do it, right?
CHAD RUYLE: Yeah. So, in a short sale, that’s typically what the realtor, negotiator, will try to do, is get the bank to agree in a contract that they won’t come after them for the difference. But they don’t always do that, and that’s kind of a negotiating point between the bank and the negotiator. But in terms of whether they will or not, you know, like you said, you can’t hang your hat on it that they won’t, but you have to look at how aggressive the banks are. And that’s tough for an individual consumer or homeowner to know. But there are certain banks that we know of that are more aggressive than others, in trying to recoup their deficiency. The biggest determining factor is really how much—what’s the difference? You know? If it’s a
$30, $40,000 difference, I’m not saying they won’t, but it’s unlikely that they’ll come after homeowners for that difference. The fees and cost that are involved for them to try and recoup that, it just doesn’t pencil out for them to pursue an action against them.
JASON HARTMAN: Right. And when they—when you say pursue an action, of course that makes sense, because anybody listening who’s been involved in litigation knows that $30-40,000 in attorney’s fees, that happens pretty quick. So, does the lender have to actually formally sue the borrower to recoup that deficiency? Or can they do it in a statutory manner, or is there another way, or is it just a full blown civil lawsuit?
CHAD RUYLE: Well, each state’s different. In some, it’s part of the foreclosure process, and then they would actually file a claim for the deficiency amount, and then get a judgment for that deficiency amount, and have to pursue that. In some it’s a separate action that the lender has to bring. It is a civil action, that they would have to bring to recoup the difference. They’d have to go through that civil trial process, and then get a judgment, and then also have to enforce the judgment. So, as many of your listeners probably know, the legal system isn’t cheap, and it isn’t quick. So, when the bank is looking at that lengthy, costly process, they’re gonna think twice about it if the deficiency amount is less. If it doesn’t make sense financially for them to do that.
JASON HARTMAN: I just want to clear a couple of those points up, but go ahead with what you were saying. I got you off on a few tangents here, and I apologize, but I just thought it was important for the listeners to know some of those things. So, differences between investment properties and homes, did you kind of cover that?
CHAD RUYLE: Yeah, so, with investment properties versus owner occupied, I mean, the main difference really is the deficiency amount. Or, the ability for the bank to come after the homeowner for the deficiency. But also, you know, it affects whether someone could get a short sale or a loan modification. The banks are not very willing to work with investors and investment properties, because it’s a second property, or a multiple property. They’re much more willing to work with an owner occupied, to do a loan modification or a short sale.
JASON HARTMAN: And I think part of the reason for that is just basic PR. The banks have a pretty bad image right now, and they want to lessen, if possible, the number of people that are kicked out and talking on cameras and so forth.
CHAD RUYLE: Sure.
JASON HARTMAN: Or calling in to talk radio shows. But I will tell you that the banks are so flipping confused, and just disorganized. It’s mind-boggling to me, that half the time it seems like they don’t even know whether you’re occupying the property or not. They literally have no idea. I mean, I have received letters in the mail on properties I own all over the country, and Bank of America is, in an attempt to justify the money they’ve taken—actually, I should say stolen—from our government, us the taxpayers, in pretending that they’re willing to do loan modifications, right? They’ll say, well, we’re having an event in your area, and here, the property’s in Georgia, and they’re inviting me to it—they just have no clue what is going on. And you can tell when you talk to their call centers and they’re processing people that they just, they just don’t even know. I mean, these portfolios are so big, and it’s just a mess. I mean, you’ve certainly heard and read about the MERS system, and what a disaster. I mean, it’s just mind-boggling what’s going on.
CHAD RUYLE: You know, I’ve tried to understand it, and I think you’re certainly right, that it really has to do with this whole department that was created in ’07, or around there—2007—where they had these departments of—for loans, and procuring loans, and putting homeowners or people into homes, and then they had to all of a sudden switch from that, and get rid of all these people, and take on a loss mitigation department. So, it’s not a whole new department, because they always had a loss mitigation department, but they’ve had to increase it substantially. I couldn’t give you numbers, I don’t know how many new employees at each bank in the loss mitigation departments, but—but anytime a company or a department grows that quick and that large, there’s just gonna be chaos. You know, you can’t do that. So, I think part of it is this unorganization, this chaos that’s going on at the loss mitigation departments at banks. And just to clarify, loss mitigation departments—those are the departments of people that a homeowner would talk with or negotiate with—if they’re trying to get a loan modification, they’d be talking to the loss mitigation department at a bank. If they’re trying to do a short sale, it’s also at the loss mitigation department. So, they’re dealing with these people at the banks. A lot of them really don’t know what’s going on. So, I think there is that chaos, but I also think that these banks aren’t really willing to move through short sales and modifications quickly, because I think then they’d have to write down these assets. So if they took it all on at once, it would kill their balance sheets, to show all these losses at once, so—
JASON HARTMAN: That’s a great point. That is a great point, Chad, and I’m glad you brought that up. The other thing I’d just like to ask you about that is, it seems that the banks—and this is a purely anecdotal—you know, I have no data on this, it’s just a perception. It seems that they’re more willing to do short sales than loan modifications. And I don’t know if that’s the way their assets are valued, or the way that the investors, they sell off the loans are willing—I don’t know why it is, exactly. I’ll probably come to understand it. But at this time, I don’t. Do you perceive it that way too? That loan mods are harder to get than short sales?
CHAD RUYLE: I do. I think it’s what the bank is looking at, the reality they’re facing of someone doing a short sale versus a foreclosure—they’re further on in the process. So, it’s kind of like the second step, almost. They’ve tried a loan modification. Bank wasn’t willing to work with them. So now they’re in option two, looking at short sale. I’m not saying that’s what happens all the time, but a lot of times, that’s the process. And so, when they get to that short sale, the bank’s looking at either a short sale or a foreclosure, and every time they go with the foreclosure route, they’re going to lose money, because they have the costs and fees of going through the foreclosure, taking the property back, having to get the owner out of the property, and then the costs that are associated with it, and the loss in value, if there’s a depreciation. So, they’re gonna be losing a lot more money if they go through the foreclosure versus going through a short sale, because they reduced their costs and their fees. But, going back to the rationality of the banks—I’ve seen cases where people try to work out a short sale for, you know, say $400,000, and the bank’s just not willing to budge, they’re not willing to go down to $400,000. Property goes to a trustee sale, so it goes through the foreclosure, bank sells it at a trustee sale, and they sell it for $348,000. So, they’re selling it for $60,000 less than what they were unwilling to sell it for to a short sale. In addition to taking that $60,000 loss, they’re having to pay a lot more in costs and fees, because they went further along in the process. So it just doesn’t make sense.
JASON HARTMAN: Very good point. So, in terms of how someone should walk away, or if they should walk away, maybe circle back around. We started talking about that; what are some of the other things they should think of? I mean—for example, Chad, does it ever make sense to just do the foreclosure? Does that sometimes make more sense than the short sale? I mean, it hurts your credit more, and I do want to ask you a little bit—I know this isn’t your specific area, but you are involved with it. Credit repair, and credit restoration. Because with a foreclosure, the person can stay in the house longer, potentially, right?
CHAD RUYLE: Yeah. The determining factor is really their credit. So, do they—are they really, are they gonna buy a house in the near future? Do they need that credit for something? If they’re trying to save their credit, a short sale’s a better option. But a lot of these homeowners, they’ve already ruined their credit. They’re not looking to buy anytime soon, and the process of going through a short sale is a lot more difficult than just letting it foreclose, and as you pointed out, going through the foreclosure process, typically they get to stay in the home a lot longer than a short sale.
JASON HARTMAN: One thing I just want to mention there, if I may—I know I said that, and what you’re saying is interesting, and it’s right, but sometimes, the short sale is used as a gambit to sort of string lender along, and delay the foreclosure. So, sometimes you actually stay longer if you’re doing the short sale. Or at least pretending to do the short sale.
CHAD RUYLE: Sure. People use it as a tool, like you said, to stay in a property longer. They pretend that they’re gonna be doing a loan modification or a short sale. But you know, most of the people we see, they’re really trying to work something out with the bank. And the banks just aren’t cooperating. But yeah, so, going through the foreclosure, you know, I know people that have stayed in their properties for two, three years without paying a rent, without paying property taxes. So, they’re living essentially rent-free. And from a financial perspective, because they weren’t as concerned about their credit, it made much more sense to go through the foreclosure than it did to try to short sell the property.
JASON HARTMAN: Let me take a brief pause; we’ll be back in just a minute.
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JASON HARTMAN: Can people get their credit repaired? Can they fix up their credit after one of these experiences?
CHAD RUYLE: Yeah. So, on the credit side of it, there’s really two areas. One is the score, and one is the report. And they work together, but their difference is that the score can be recovered fairly quickly. And when I say fairly quickly, a year or two. Sometimes sooner. But that score can get back up to what they had before, but on the report, which is the information, kind of a history or timeline of their credit relationships, the foreclosure’s gonna be on there for up to seven years. So, a bank might see a good score, but they could look at the report, see a foreclosure on there, and then make a decision not to lend because they saw that foreclosure. But outside of that, I mean, that score is gonna be recovered, as I said, relatively quickly.
JASON HARTMAN: So, are banks looking at the report closely? Because most people talk in terms of scores. They just say, my FICO score is this with Experian, that with TransUnion, and that with Equifax, or my tri-merge, which means, the merger of the three reports together, my middle score is x. and by the way, you may have a commentary on this, and as an aside, I think that 650 is the new 720, when it comes to credit scores nowadays.
CHAD RUYLE: Yeah, and that’s a good point too. I’ll go back to your first point, but on the point of the relativity of scores now, I think they’ve changed—both things have changed. How they score, and also, lenders’ perception of that score. Because there are so many people that defaulted on their mortgage and missed payments, and people that had trouble with credit cards, and missing those payments, that you have a large percentage of the population that has lower scores. So it’s—
JASON HARTMAN: It’s a bell curve. It’s a bell curve.
CHAD RUYLE: It’s a bell curve, exact—I was just going to say that. So, it’s the perception of the score, but it’s also the score itself that’s changing. No one knows that—how they score it exactly. It’s based on a lot of different factors. But in terms of the score, and looking at foreclosure, your credit and foreclosure, a lot of the people that we deal with, we advise them, if you’re not gonna pay your mortgage, and you’re concerned about the effect that foreclosure will have on your credit, take that money you’re saving, if you can—some people can’t. But if you can, use part of that to pay off your credit card debt. Because credit card debt, we’ve heard—roughly you know, balance is roughly 30% of your score, the effect on it. So there’s ways to use the foreclosure and your savings there to your advantage, to try to build that score back up.
JASON HARTMAN: That’s similar to what I had predicted I think correctly now, looking back, when consumer spending went up like a year ago last spring, and the Obama administration was bragging about the recovery. Yeah, sure. I said, at the time, this is just simply people who aren’t making their mortgage payments going to the shopping mall. It’s a matter of people using money they would otherwise be paying a mortgage with, to spend.
CHAD RUYLE: Yeah. There was a Bloomberg article recently that I just—I don’t think it’s aired yet, but I just interviewed with Fox News, and the piece was on that. This, what are people doing with the money that they’re saving by not paying their mortgage. You know, a lot of the people that we see are using it responsibly, but obviously there’s people that are just spending it unwisely. But I think there is kind of—there’s an effect on the economy, because there’s money that’s being saved by not paying a mortgage, and they can go out to eat more, they can spend it on trips, and so, when that free ride ends—you know, not paying the mortgage—then that money’s gonna be taken out of the economy.
JASON HARTMAN: Yep. Couldn’t agree more. And that’s what happened during the refi boom, when all of these lenders were giving these liberally ridiculous loans, is that a large part of the country’s GDP was basically coming from people refi-ing their homes and buying stuff. That wasn’t real production. It was simply cycling fake equity into the shopping mall, the car dealership, and the travel agent.
CHAD RUYLE: It’s kind of like the foreclosed properties, the REOs, where investors were buying those up, that the realtors in that industry was playing you those numbers to say look, the housing market is recovering. People are buying again. But those weren’t real buyers. Those were mainly investor groups, or investors. But you know, on that point, and as it related to everything we’re talking about, there’s a difference of the homeowner who can make the payment, but they just decide because they’re so far upside down—
JASON HARTMAN: It’s just not worth it—
CHAD RUYLE: That they’re underwater, it’s not worth it, so those are strategic defaulters, where they’re just deciding, look, it’s not financially in my interest to continue paying a mortgage on a property I paid $400,000 for that’s worth $200,000. I’m not gonna recoup that for many, many years. A difference between them and then the homeowner who just can’t afford it. They aren’t making enough money, they lost their job, lost income, whatever their reason. People differentiate the two, but you also have to look at the gray area, where someone might be considered a strategic defaulter, and people say, well, they can afford it, they have enough income, but that means—that might mean they’re not putting money towards savings, or they might have to take money out of their retirement fund. They’re not paying for certain needs, and things for their family. So, at the cost of their family, their future, they would be able to continue making the payment. So, there’s definitely a gray area, I think, between a strategic defaulter and then just a homeowner who absolutely can’t afford that payment.
JASON HARTMAN: Well, the original question on that kind of started out as the difference between the score and the report on someone’s credit. Now—and you were going to get to this, and I know you’re working away there, but, like, are the lenders really looking at the reports closely? Or is it score-based?
CHAD RUYLE: You know, I couldn’t say for sure. I mean, each bank’s different. But most of them, you know, they look at the score. That’s what they go off of. It just depends on the size of the loan, and the procedure of the bank. But it’s mostly looking at the score. But I know the banks do, in certain cases, look at the report as well to see if there’s a foreclosure on the record.
JASON HARTMAN: Can you fix that? Can it be removed, or is that pretty impossible? You see all these ads, and all these companies; some seem rather hokey, to say the least, that say they can fix your credit. What is the real success rate in that kind of stuff?
CHAD RUYLE: You know, I couldn’t give you percentages. You Walk Away doesn’t do that. We don’t file lawsuits, or try to get foreclosure off the record. But just in my experience in hearing of different cases, it’s definitely successful. You know, it’s not something that happens most of the time. I couldn’t say that. But I’ve seen people that, for whatever reason, whatever violations that are there, from [unintelligible] violations, they’re able to get the bank to take the foreclosure off the record, and which significantly helps their score. Sometimes, you know, people will hire attorneys or companies to try to do that, credit restoration companies, to try to fix that. There’s games that people play with the bank of demanding that they produce the note, which essentially is showing them the loan documents that they actually have them in hand. You know, asking [unintelligible] question that many times, and the bank’s not complying, that they force them then to remove the foreclosure off their record. So, it definitely works, but you know, I think a homeowner going into this decision, foreclosure, short sale, loan mod, or continuing to pay, they shouldn’t bank on them getting a foreclosure off their record.
JASON HARTMAN: Very good point. In other words, don’t hang your hat on it. Well, Chad, what else do you want people to know about this whole area? What haven’t we covered in this talk?
CHAD RUYLE: Well, the question I get asked most by the media is the moral dilemma, or ethical dilemma, of someone that walks away, and specifically that strategically defaults. So again, they owe more than the house is worth, and from a financial perspective, doesn’t make sense. There’s this idea that no matter what, you pay your mortgage. That’s your obligation, that’s your word. But in my view, and if you look at the contract, it’s different than a credit card debt, which is just a guarantee that you’re gonna pay that back. There’s no collateral, no property. You know, in a mortgage, it’s a business transaction where there’s collateral, and the property—the bank, in their agreement, is lending you the money, and if you don’t pay that money back, they get to take that property. So it’s not—you’re not breaking your word, or your bond, or your contract, or doing anything illegal. You’re following the terms of the contract, to where it’s—if it’s—if you don’t pay—it doesn’t say if you can’t; it just says, if you don’t pay this mortgage, then we’ll take the property back. And they hedge their bets with interest rates. They hedge their bets in other ways, with certain credit default swaps and other investments. And also, banks, they should have been in a position to know better. They’re the ones that created these loans, sold them off many, many times in mortgage-backed securities. So, obviously we wouldn’t feel bad for the banks, but in this business transaction, you know, I think it’s completely ethical for a homeowner to decide to give the property back. They obviously have certain ramifications with credit, possible deficiencies that they owe, but they have to look at it as a financial decision. They can’t just be bound to these payments because someone says that it’s a moral obligation.
JASON HARTMAN: And you know what? I have to say that I agree with you. My attitude has changed pretty significantly on this. Because at the beginning of the financial crisis, when I was less informed than I am today, I really sort of thought—what are all these people whining about? They got lucky! They got to move into a house that they couldn’t otherwise have afforded. They got to live there for three, four years, and now they’re complaining that they’re getting kicked out on the street. And the media never asked the question, when they reported those stories, well, did you ever really deserve this house in the first place? Before this, you were living in a two bedroom apartment.
Now you’re living in a four bedroom, really nice McMansion. Or pseudo-McMansion. It’s sort of all relative. People just looked at it as oh, they lost their home, but they never looked at what level the home was. And so, I still think that. But on a larger picture, with what you said, that the bank has agreed that look, this is the business deal. Here’s the collateral. It’s not an installment debt, it’s not a credit card debt. If I don’t pay, or I can’t pay, you get the collateral back. And that is simply a business deal. It’s the same way people use corporations and LLCs in the broader business world. Shipping and exploration of the earth would have never been done if someone didn’t invent the corporation. There probably would have never been a Columbus, or any of those explorers, right? And so that’s the business deal. The liability goes only to the property. And there’s certainly a large school of thought that believes that the banks engineered this whole crisis in the first place. We did an article in my newsletter, the Financial Freedom Report, about Goldman Sachs, and how they’re the great bubble machine, and they always seem to profit, ultimately, from these bubbles, where they go in and they pump up asset values, they loan on them—you know, and this is all the behind the scenes stuff that goes on in the Wall Street world.
They loan on them, they use credit default swaps, they use all these other vehicles, they sell off the loans to Fannie Mae, which means the taxpayers ultimately foot the bill through taxes and inflation and debt, and then they go in and buy the assets up cheap later. And everybody’s credit’s been destroyed, and then they get to have an excuse to charge them higher rates on loans in the future, because their credit is now worse off, and most people just buy into all of that, that grand scheme, without ever fighting back and trying to fix their credit, or trying to consider strategic defaults and so forth. So, it’s a much more complex problem. And you can slice and dice this a zillion different ways. But I’m glad you brought up that moral question, because it’s a good one.
CHAD RUYLE: Yeah. I’d like to follow up by saying, I do think there’s a responsibility on the homeowner. Certain people abuse the system. They lie—getting and procuring the loan by not—by falsifying their other income. You know, they pulled out seconds, and didn’t spend the money wisely. So, I think there’s responsibility on the homeowner. But if you look at morality, it’s really looking at someone’s intentions, not the act itself. It’s [unintelligible], at least. And so, in this situation, we’re really just looking at a legal contract, and what they’re doing with it. You know, they’re not breaking their word, as I said. They’re following the terms of—and you know, to give an example, when people just, after explaining that, still don’t feel it’s quite right, I ask them if they have a cell phone contract, you know, say with one big carrier, and they don’t like that carrier’s coverage, or for whatever reason, they want to switch. People wouldn’t think twice about moving to another carrier if the penalty was suitable, so they’d pay a $50 penalty, $100 penalty—
JASON HARTMAN: Get out of the deal, and get a better deal. Sure.
CHAD RUYLE: Get out of the deal, move into a new carrier, and they understood the penalties that were there. The carrier set those penalties because they know people are gonna move and cancel their contracts before the term. So, when I ask them that, they say well yeah, I wouldn’t have a problem doing that. I’ve done that. I’ve cancelled my carrier. There are other examples like that. But—
JASON HARTMAN: You made an intelligent business decision, because it was worth it to pay the penalty, and so in the case of strategic default, the penalty people pay is number one it can be a big hassle, number two their credit is damaged, number three it can be a hassle to fix the credit, and they ultimately lose the collateral of the property. And so—and like you said, Chad, there will always be people that abuse every system. There are bad people out there that really take advantage of things. There’s no question—we all know that’s true, and that is going to happen. But in the case of the mortgage world, this whole game, and everybody knew it in the early 2000s, and in the mid-2005 area, when it was just getting really frothy, that the whole system was set up as a corrupt system where everybody along the line from the mortgage broker who gave you the loan was making commission, and didn’t really want to know if you could afford the house. The whole system was set up that way. It was designed that way. And it wasn’t like the borrower—you know, a lot of these lenders went out to people that they knew could not afford these properties, and pushed loans down their throat! It’s really—it’s a pretty multi-faceted problem.
CHAD RUYLE: The responsibility and the cause I think is all the way from the homeowner all the way up to the top politicians, and everywhere in between. From the homeowner, the mortgage broker, the bank, the investment—
JASON HARTMAN: Wall Street.
CHAD RUYLE: The [unintelligible] securities, the legislators that created new laws to allow for no dock, no money down, these new loans that were pushed, and pushed back in the other direction towards the homeowner. So I think all across the board there’s blame. But you really have to look at where do we want to burden—or, who do we want to burden. And I just get frustrated when people just keep arguing that it’s the homeowners’ responsibility 100%, they have to pay it. You know, I really believe that the burden’s on the bank. They’re the one’s that went into this eyes wide open. They’re the ones that got money from [unintelligible], they’re the ones that should have hedged their bets better. So, that’s where I really think that the burden lies.
JASON HARTMAN: I agree. Well, hey, this has been a really interesting discussion. Chad Ruyle, it’s YouWalkAway.com, and Chad, we’re gonna do some special offer or something on our page for you, and the services your company offers, and that’s www.jasonhartman.com/offers, so again, check out www.jasonhartman.com/offers, and thank you so much for joining us today. I really appreciate the insights, and learning more about intelligent, strategic default, which is what you help people do. So, appreciate having you on the show.
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Transcribed by David
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