Know that the bank is making booboos from the beginning. So, you want to buy a house. You know nothing about buying a piece of real estate, however, you have watched the neighborhood change with people doing this kind of thing up and down the block. All kinds of people are doing it. How difficult can it really be?
Perhaps, you have gone to a couple of real estate seminars in order to familiarize yourself with the processes of buying a home. You’ve learned that there’ve been more millionaires created by real estate than anything else in the world. You have talked with some of your friends who have purchased their own home. You have read the trade magazines and the Sunday real estate section in the newspaper. You may have gone to open houses and talked with various realtors. You may have scoured the internet sites trying to learn as much as you can about homeownership and why it is known in the United States, as the “great American dream”. You have learned about the tax benefits of being a homeowner. You’ve talked with the local banks. You’ve talked with numerous mortgage brokers. After all of this, you are thinking that it might be time to dive in to what will likely become the largest single investment you will ever do.
You decide to go out and find a realtor to help you. What are the reasons you use to pick a realtor for your home buying experience? Is it because they are family? Is it because you or your spouse is the godparent to their child? Is it because you have known this person as a friend and want to give them your business? Is it because they work in a real estate office that is fancy or perhaps they seem successful at what they do so they must know what they are doing? No matter what the reason you choose to deal with whoever it is you decide, know that they don’t know everything. Know that their office doesn’t know everything. Know that they work on a commission. Know that they are human and make mistakes. Know that they are needing business in order to pay for their own personal bills just as much as anyone else. Know that the commission is negotiable. Know that the contract that they will give you will attempt to state that you hold them harmless for whatever information they give you. Know that they may give you information that could become detrimental to your situation. Know that it is possible that you might reach a point in which legal action could come between you and this person. Know that you should do your own research.
Next, you talk with a mortgage broker that you have come to trust. Why do you trust this person? Is it because they seem knowledgeable about what paperwork is necessary to finance a home? Is it because they have stated that they can get you the best rates? Is it because they have been in the mortgage business longer than anyone else you have been talking with? Is it because they were the person who held your hand through your learning curve and you now feel obligated to use them? Is it because they are a family friend? No matter what the reason you choose to deal with whoever it is you decide know that they don’t know everything. Know that their office doesn’t know everything. Know that they work on a commission. Know that the commission is negotiable. Know that they are human and make mistakes. Know that they are needing business in order to pay for their own personal bills just as much as anyone else. Know that they may give you information that could become detrimental to your situation. Know that it is possible that you might reach a point in which legal action could come between you and this person. Know that you should do your own research.
Now, your mortgage broker has found a loan for you and sends to you all of the documents that you will need to fill out and sign. They will probably have little sticky arrows or yellow marks at every place where you will need to initial or sign. Know that there will be paperwork that will need to be reviewed by a notary prior to sending things back to the broker. Once things are notarized you wait for the mortgage broker to deal with the lender for any other questions or documents that might be necessary. Know that within these documents you are signing paperwork to get a loan from a bank. Know that you are also signing paperwork that puts your new home up as collateral for this money that you are borrowing. Now that one of these documents is called the Note, and the other is called the Deed of Trust. The deed of trust is the document that creates the agreement that you are using your home as collateral against the note if the lender gives you the money you are requesting. Know that the Note is the document that states that the lender is giving you money and that you are borrowing this money with the full intention to pay the lender back including interest. Know that the lender has included in the deed of trust what is known as an arbitration clause. This means it is their attempt to make sure that you cannot sue the lender in court. Know that the lender has given you a deed of trust with the full knowledge that the trustee in the relationship is owned and/or controlled by the lender and they are not informing you of this issue. Know that the lender knows that the trustee is supposed to be independent in the relationship. Know that there is over a 90% chance that the lender has the full intention of selling your loan documents to Wall Street within 30-60 days following the closing of the loan deal. Know that the lender has not stipulated anywhere in the contract that they will be informing you of them selling your loan, or when or to whom they will be selling your loan to. Know that the lender will not be including you in any of the profits that the lender will earn from the selling of your loan to another party. Know that you are being misrepresented in this loan agreement from the onset.
So, where are you now in this process? You have researched neighborhoods and homes and found something you would like. You have found a realtor who seems to understand what your desires are in a specific kind of home you are wanting and has helped you find this property. You have talked with the mortgage broker and discussed your financial needs and obligations as to what you are hoping to accomplish and can afford. Your broker has come back to you with mortgage documents from a lender to a loan that you feel you can afford. You are now waiting for the lender to decide if you will qualify and receive funds based on their corporate policies and computer algorithms. You have now reached what is called the escrow period.
During the escrow period the lender is looking through your financial life on paper. They are reviewing your credit report, your employment documents, your past taxes, your social media. They will claim that they are finding out more about you than you know yourself.
Now, it’s your turn. During this timeframe, it is my advice to do your own research. It is good to know who you are dealing with as well. Take some time to visit the website of your Secretary of State. You see, every business must register with the Secretary of State when they incorporate. In other words, for a lender to be able to do business within that state it must register with the Secretary of State. This office processes the filings, maintains records and provides information to the public relating to business entities such as corporations, limited liability companies, limited partnerships, limited liability partnerships, and other types of business filings.
In my experience, I have found that there are lenders who will construct loan documents despite the fact that they are not a legitimate business and legally able to do business. Now, you might hear this and think that is a rare thing. How could this be true? This couldn’t actually happen in our society with all of our checks and balances? Know that there are numerous financial institutions across the country that have given out hundreds of thousands of home loans when they were not legally capable of doing so. In other words, these lenders are doing business without the appropriate business license. This means that all of the loans that they contracted for are actually void. You could think that because of this fact the contract which you signed with this company was written on the equivalent of blank paper. The fact is that the business was not in a legal position to do business so by law the contracts that they constructed for home loans are void. Non existence. Unlawful. Illegal. Not valid.
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