Hung-up on Trusts.. - Posted by Brad TX

import · February 28, 2001, 11:56am

Since the wine barrel disintegrates … - Posted by Roman

Posted by Roman on February 28, 2001 at 12:56:34:

most of the time, could you please cite a few loans that have had DOS calls when the payments were kept current and there was actually damage suffered as a result of the acceleration. I guess that’s what you mean by the wine barrel disintegrating most of the time (if it makes it over the falls sometimes, it must not make it most of the time).

Frankly, I haven’t heard of anybody having a problem and everybody from this board that does deals regularly hasn’t had a problem.

Where does all this DOS call scare come from anyway? Is this just your sales angle or do you really have evidence that people not using your product have significant problems?

Roman

import · February 28, 2001, 11:16am

Re: No CYA Huh? - Posted by JPiper

Posted by JPiper on February 28, 2001 at 12:16:15:

I don’t think you’re getting my point.

CYA in my opinion has nothing to do with whether the PacTrust is viable, whether your opinion about it is correct, or whether a court of law would uphold your viewpoint. CYA to me is a simple strategy to clarify any gray or uncertain areas that might result in a problem to you.

It’s not a question of right or wrong…it’s just a strategy to protect yourself. You on the other hand seem to be saying that “I know I’m right about the PacTrust, I’ve checked it out throughly, I know how a court will rule on various aspects of the PacTrust, and therefore I don’t need any CYA documents. The documents stand on their own, and I need nothing else to protect me.”

I don’t do my deals that way…and if I happened to use a PacTrust, I would not do it that way either. I think the escrow and title companies that you work with are correct in attempting to protect themselves. I would want that myself. That doesn’t mean that I haven’t checked it out, that I was confident I would be right, etc etc. CYA is about prudence.

JPiper

import · February 28, 2001, 4:09pm

Re: Since the wine barrel disintegrates … - Posted by Bill Gatten

Posted by Bill Gatten on February 28, 2001 at 17:09:20:

Roman, my first impulse was to ignore your post (its a bit insulting); but then I decided not to as you may infact be sincere in your questions and disquising your interest as something else.

First of all, do understand that you have inadvertantly misconstrued this whole string and my response to it(pay attention Roman). I know of lots of cases (including two of my own properties)–and I have posted some of them here in past–where lenders have called their loans because of their right to do so under their alienation provisions. HOWEVER…THAT’S NOT WHAT THIS STRING OF POSTS IS ABOUT! Roman, I honestly couldn’t care less about scaring anyone into or out of anything…and I certainly have no desire “sell” you anything. Anyone who pays on time and has the wherewithall to continue doing so needn’t worry about a DOS call (such calls are EXTREMELY rare, though they do happen).

The subject had to do with “CYA letters.” Someone said the PACTrust safely circumvented the due-on sale clause; someone else implied that it didn?t?I jumped in and said, “yes it did.” I gave an example of a typical transaction and demonstrated that it (the PT) did indeed circumvent the DOS.

I did not say the DOS was something to worry about (as a matter of fact, wouldn’t I appear to be saying the opposite of that if I was indeed suggesting CYA letters were necessary…I’m not the one who isisted they were).

Personally, I would never worry about the DOS if someone insisted on giving me a property via a Lease Option, Wrap, Equity Share or anything else that would be to my advantage. IT?S THE OTHERS who are worred about the DOS?not me?I only suggest that if they ARE worried, that there is a way to transfer the full benefits of property ownership without the DOS being a consideration. Personally, I could not care less…I just don’t violate it…because I don’t have to.

The other benefits of the PACTrust over other creative financing vehicles are far more important. Let me show you some of them (read no further…if you have no further interest…this is a page out of one of our work books):

?THE SUBJECT TO PIPE DREAM?

THE MOST DESIRABLE ?SUBJECT-TO (SELLER CARRY)? ARRANGEMENT YOU CAN IMAGINE? HOW ABOUT ONE THAT DOES ALL THIS (IF IT WERE POSSIBLE)…ONE THAT:

Avoids lender acceptance, credit qualifying and the bank?s approval process…
Greatly reduces or completely eliminates a down payment requirement…
Reduces or eliminates costs of sale for the clients on both sides…or an investor standing between them.
Avoids violation (while not circumventing) a lender?s Due on Sale Clause…
Avoids the necessity of ?judicial foreclosure? process and/or ?ejectment actions? to cure a ?tenant’s? default…
Protects buyer, seller and investor alike from the untoward or illicit acts of each other …
Prevents parties from “changing their minds” about terms later on…
Best protects RE brokers and investors from potential litigation…
Opens the door for an unlimited reservoir of eager willing buyers and highly motivated sellers…
Keeps the entire transaction completely anonymous, secret, private, silent, undisclosed and unrecorded
Avoids the necessity of title transfer to transfer and perfect full ownership benefits
Allows for buying now, with all home ownership and tax benefits now, and financing later
Allows for full income tax write off for a Lessee tenant
Provides an owner or investor a means for conveying or “selling” tax benefits to another
Avoids disputes between parties re. repairs or capital improvements
Makes litigation between parties virtually impossible
Allows for fast foreclosure, evictions and dispossession without fear of ?equity? claims or impeding an unlawful detainer action
Carries a track record of no (zero) lawsuits or threats of lawsuits relative to its function, viability, safety, interpretation or enforceability after thousands of transactions over its history (NARS has been in business for 14 years)
Provides a vehicle for investors to make BIG money on No, Low or Negative Equity properties
Eliminates competition among creative financing investors in a given area (because they don?t know about it, don?t want take the time to understand it, or are still skeptical despite it’s track record and success)
Leaves an unbiased, bonded, licensed 3rd party fiduciary in charge of buffering and averting any party’s illicit, illegal, untoward or harmful actions that could negatively affect any other party to the transaction (by virtue of a collective and mutual power of direction .

Now…from the above list, assign a score to the following Creative financing vehicles: (1 point for each item that applies from #1 to #21)

A. All Inclusive Mortgage or Trust Deed (Wrap)-- Score: (____)

B. Lease Option – Score: (____)

C. Bi-lateral Lease Purchase (i.e., w/Contract of Sale) – Score: (____)

D. Land contract (Contract for Sale or Deed) – Score: (____)

E. Equity Share – Score: (____)

F. PACTrust? Score: (____) (btw, the score is 21)

import · February 28, 2001, 3:13pm

Hey! - Posted by Bill Gatten

Posted by Bill Gatten on February 28, 2001 at 16:13:57:

Jim! I got you point! That last post to you was supposed to be humorous…not critical. I was subtly trying to say that you were not wrong, but that ALL of our thousands of PACTrust transactions do contain the CYA letters you refer to…it’s just that they are done by our Escrow Company, not me. This whole thread got out of hand…it began with whether not the DOS was violated (that’s the part I’m adamant about, not what I know for certain someone else might think or say).

I’m the last person to prognosticate about a judge or a court or a lender or the IRS would “definitely” do or say. I only know the logic of what they “should” and shouldn’t do or say if fairness OR logical ever prevailed…and they don’t.

Bill Gatten

BTW Jim, you’re a sexy little devil when you angry.

import · February 28, 2001, 11:24am

IRON CLAD GUARANTEE… - Posted by Houserookie

Posted by Houserookie on February 28, 2001 at 12:24:26:

The same reason that most lawyers shy from acting as trustees for their clients, I doubt Bill would want to offer his clients the IRON CLAD GUARANTEE that will cover all expenses if ever defeated in court.

import · March 2, 2001, 9:12am

Comparing PAC-Trust benes - Posted by Terrance Hamel (WA)

Posted by Terrance Hamel (WA) on March 02, 2001 at 10:12:10:

Bill,

I spoke with you on the phone a few days ago and I thank you for that.

This is one of the more clear descriptions of a PAC-Trust I have ever read. A comparison of property acquisition vehicles is something I have been curious about for some time. Do you have a “spreadsheet” that shows this? ie The 6 types you have listed (A-F) being columns and the 21 questions as rows with X’s in the appropriate spaces? That would clarify it for me once and for all.

import · February 28, 2001, 4:42pm

Re: Hey! - Posted by Stacy (AZ)

Posted by Stacy (AZ) on February 28, 2001 at 17:42:52:

Bill, Is it true that you met CHANG KAI-SHEK?

Stacy

import · March 5, 2001, 12:50pm

Re: Comparing PAC-Trust benes - Posted by bill gatten

Posted by bill gatten on March 05, 2001 at 13:50:29:

On its way by e-mail

Bill

import · February 28, 2001, 7:00pm

Re: Hey! - Posted by Bill Gatten

Posted by Bill Gatten on February 28, 2001 at 20:00:51:

Stacy,

Now that’s weird. How did you know that? Only my closest friends are privy to that information.

Yes, I did meet him once and we had quite a lovely chat. It happened this way.

While aboard the aircraft carrier, USS Midway (CVA 41) in 1961, some emissaries from the Chinese Nationalist Republic, including my friend Chiang, came aboard to observe Air Operations. At the time, I had been assigned to special duty in the 07 deck ladder well (swabbing the deck there, as it were).

As I was swabbing away and engrossed in my artistry, I heard footsteps from above on the stairway, and someone yelled “Attention on Deck,” whereupon I froze in the standard rigid pose, with right hand flattened and pointed at the proper angle toward my perspiration-beaded bulging-vein little forehead.

At that point, two large full-dress Marines clamored down the ladder (the stairway) and pinned me and my mop?and my bucket? to the wall with their night sticks, in order to best facilitate the passing of the procession. I soon found myself starring down into the upturned eyes of General Chiang himself (a short man of Asian extract). Glancing my way, he spoke first: "Good Morning Son? he said, in nearly perfect English…at which I rapidly retorted…“um yes sir, it sure is a good one?um morning, that is.”

That’s it. A brief repartee to be sure, but certainly a meaningful moment as the two minds met?and one I can re-live for years to come with my great grand kids if I ever have any. So far, my kids and my grand kids seem to be somewhat nonplused with my recounting of my rendezvous with greatness.

Nevertheless, thanks for asking.

Bill Gatten