Posted by Bill Gatten on April 09, 1999 at 19:41:18:
OK, then I’m baffled.
But, thank you.
Your…um…is accepted.
Bill
PACTrust - Posted by Dave D
Posted by Dave D on April 07, 1999 at 12:28:11:
What is a PACTrust and what are the advantages of its use?
Re: PACTrust - Posted by de1159
Posted by de1159 on April 08, 1999 at 14:35:09:
The trust will not stand up in the courts and the non-resident beneficiary can file bankrupt on you the resident beneficiary in fact we lost $20,000.00 in a Cal-pactrust agreement!!!1
Re: PACTrust - Posted by Bill Gatten
Posted by Bill Gatten on April 07, 1999 at 17:15:42:
A PACTrust is a 3rd party trustee, co-beneficiary real estate conveyance method. Works this way:
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An investor locates a property wherein the seller is willing to remain on the loan for a while.
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The property is placed into title-holding (land) trust in the seller’s name, with appointment of a 3rd party corporate trustee. The trust’s being in the seller’s name makes all insurance issues (title, hazard, etc.) easier and smoother, as well as avoiding transfer taxation, capital gains taxation (no sale or transfer beyond the owner’s trust), DOS violation and relinquishment of control of the lender’s security interest (i.e., conforms to Garn St. Germain 12USC 1701(b)).
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The investor (you) acquires a full or partial beneficiary interest in the trust and executes a triple net lease of the property with the trustee.
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A resident (3rd) beneficiary can then be located who will move in and make all the payments and handle all the repairs and upkeep, in exchange for the tax write-off, and perhaps a share in future appreciation (or the property can merely be flipped or leased, with or without an option to purchase).
This system allows for a safe, legal, clean and clear way to hold title to Realty without fear of DOS violation, without fear of the title being jeopardized by someone elses legal actions, BK, marital problems, liens, etc.
The system allows for easiest evictions without an errant tenant being able to claim “equity” to avoid eviction; and without having to resort to Judicial Foreclosure, Quiet Title, Ejectment and all the baloney usually necessary to get a bum out…
Thanks for asking.
Bill
Re: PACTrust - Posted by Bill Gatten
Posted by Bill Gatten on April 08, 1999 at 22:31:35:
Wow! This is all I need 
I’m truly sorry, and deeply apologize to anyone who has come across the foregoing very juvenile and irresponsible post. I would think that anyone investing (much less losing) so much money would know how to spell PACTrust. Our program has never been called a “cal-pac…” anything.
Bill
Re: PACTrust - Posted by de1159
Posted by de1159 on April 08, 1999 at 14:26:11:
I really got screwed with this trust!!! The non resident beneficiary and trustee failed to make payments sent to him, failed to sell after going to court and agreeing to and on top of that the house is foreclosed, he filed bankrupt and I am out of my initial investiment of $20,000.00. NOT A GOOD DEAL AFTER ALL!!!1
You say it so simply! Isn’t it wonderful to buy/sell this way?! - Posted by Kev.
Posted by Kev. on April 07, 1999 at 23:32:56:
Still not associated with or being paid by Bill.
Hurry up, Bill. I need money. )
Re: PACTrust - Posted by de1159
Posted by de1159 on April 09, 1999 at 10:26:34:
I DID INVEST IN A PAC TRUST!!! I INVESTED A LOT OF MONEY AND THE HOUSE HAS BEEN FORECLOSED, THE OWNER DID NOT MAKE THE PAYMENTS WE SENT HIM THAT WAS PROVED WHEN WE WENT TO COURT AND INSTEAD OF ANYTHING ELSE HAPPENING HE THE NON-RESIDENT AGREED TO GET A SHORT FROM THE MORTGAGE CO. I HAVE THE PAPERWORK AND A ATTORNEY THAT WAS THERE WITH ME!!! INSTEAD OF THE NON RESIDENT DOING AS AGREED HE FILED BANKRUPT AND WE ARE STILL IN THE HOUSE WAITING FOR THE MORTGAGE CO TO EVICT OR HOPEFULLY LET US GO AHEAD AND BUY… WE HAVE LOST A LOT AND I WOULD NOT RECCOMEND THIS TRUST TO MY JUVENILE DOG!!!1
Re: PACTrust - Posted by Bill Gatten
Posted by Bill Gatten on April 08, 1999 at 21:37:53:
Dear DE1159(?),
Quite candidly Sir/Mme, you are obviously sorely mislead as to what a PACTrust™ is, and as to what the PACTrust does, or what it’s accomplished for thousands. First off, in a PACTrust, a non-resident beneficiary doesn’t make payments; and a resident beneficiary could not have invested money (ever) and ended up with a loss due to Foreclosure: unless that same individual was to have been the party in default.
What you are describing, if indeed it happened, does indeed sound like Fraud; but it’s certainly nothing we’re familiar with. As a matter of fact, avoidance of such baloney is the very reason the PACTrust™ was created… as a meticulous [and virtually fool proof] legal shield.
I’d very much like to know more (as well as who you are). Please be more specific if you can. Our program is designed to protect the parties against what you purport to be describing. Moreover, of all the transactions we’ve facilitated (since 1984), there has NEVER (not once) been a single law suit or even a threat of one involving a PACTrust, or its beneficiaries. Neither this system, its participants, nor our company, has EVER been the subject of a legal action (much less one leading to foreclosure or the award of a judgement? or the loss of “down payment” monies).
Whatever the scenario is that you say you’ve gone through, please accept our sincerest condolences: however, it’s simply just not something (we) know of, or would ever have become involved with.
Bill Gatten
Your rather cryptic posting signature and laconic note doesn’t give us much to go on, I’m afraid.
That’s a start, but you’ll have to tell us more. - Posted by FJW
Posted by FJW on April 09, 1999 at 11:03:46:
I empathize with your loss, if it happened as you say, but you’ll need to spell out what you did and with whom if you want to prove your point. Your posts make it sound like you tried to execute a PACTrust without the assistance of Mr. Gatten and his company or; perhaps the seller or investor or someone involved sold you on it but you didn’t seek independent legal counsel and also didn’t use the assistance of Mr. Gatten and his company. Your post says: “the owner did not make the payments we sent him”. In a PACTrust, payments are not sent to the previous owner. Your post is just too vague to accept at face value or for us to understand exactly what happened.
Mr. Gatten,(I believe the inventor of the PACTrust) provides a tremendous amount of information here that allows any onlookers to investigate further. I for one, have found him forthright and his information to be very well footnoted. Of course, he must defend his work. Everyone here will provide a sympathetic ear, and may be able to help, especially Mr. Gatten. From what I’ve read, in regards to land trusts, he’s among the most knowledgeable.
Before this turns into a flaming thread, and everyone turns against you for not explaining your case, please take the time to tell us what happened.
Thank you and Good Luck.
FJW
Re: PACTrust - Posted by DE1159
Posted by DE1159 on April 09, 1999 at 10:36:19:
THIS TRUST FAILED AFTER A YEAR AND A LOT OF LEGAL EXPENSE ON TOP OF LOSING I AM VERY DOWN ON THIS TRUST. WHEN WE ENTERED THIS TRUST WE WAS TOLD THIS WAS OUR HOUSE AND THE THINGS THAT HAPPENED WAS NOT SUPPOSE TO HAPPEN BUT WITH THE LEGAL DOCUMENTS A LARGE LEGAL BILL AND 20,000.00 OUT OF OUR 401K YES I DON’T BELIEVE THE TRUST CAN WORK… I HAVE MET ANOTHER REALTOR THAT DID 3 OF THESE TRUST AND OUT OF THE THREE, TWO OF THEM HAVE FAILED SO I DON’T KNOW WHO KEEPS TRACK OF THIS. SOMEONE SHOULD!!!
Re: That’s a start, but you’ll have to tell us more. - Posted by de1159
Posted by de1159 on April 09, 1999 at 11:56:14:
I did have this happen. I am not going to argue about this. I did loose a lot of money, 2 times last year I paid for a credit check, got approved to buy the house, made the offers either personally or through my attorney, never recieved any reply. We also paid for an apprasil (MIA or MAI) I would have to get the papers ). When I found out that he wasn’t making the payments I contacted the mortgage co to try to make arrangements to catch them up they said they could only deal with the owner!! Even now they have yet to accept to let us buy from them now that it is foreclosed. We did go to court and the non-resident bene. and trustee of the trust agreed to let us complete the trust to purchase , we did as agreed, got approved, paid for apprasil our attorney wrote his attorney and the non-resident and they never responded, and then he filed bankrupt on us and the mortgage co and I think even pac management he did use a different attorney for the bankruptcy. So somehow even though we went in with a lot of equity(it paid off a second mortgage the non-resident had on the house, the house was in foreclosure when we entered this nightmare, I think we were mislead by a realtor and a few others) but that I guess is the end of it and now we sit and wait for the mortgage co to evict us and we will 1 final time offer the mortgage co to buy direct from them even though we will loose our equity . We have been in contact with them but I get a different answer from everyone I talk to about who ownes the house the mortgage co or HUD.
At this point we have lost so much that to have our attorney try to do any more toward the purchase of the house and to have to pay his hourly rate and with the past year and the loss I am very bitter about this trust if it works for some GOOD BUT IT DID NOT FOR US!!!
Re: PACTrust - Maybe I Figured This One Out - Posted by Bill Gatten
Posted by Bill Gatten on April 09, 1999 at 17:29:02:
Dear Sir/Mme,
If your name would be “Mosby,” then I think I’ve figured this out (…if not, ignore this post and I’ll keep scratching my head). If I’m correct in my ID, then why don’t you explain the whole story here… how you personally authorized (by Demand in Escrow of your own device) the wife of your old high school friend to take your $20,000 out of Escrow (against our advice–specifically mine–and that of your Realtor) purportedly to pay past-due property taxes… which, as you know, didn’t happen.
Then, while you’re at it, be kind enough to point out that your PACTrust never happened either because you refused (again, against good advice) to make any payments on it. Instead you forced the property into foreclosure yourself and have been living in it absolutely rent-free for over three years now. At a couple thousand plus per-month in saved payments, I’d calculate that you should be about $70,000 ahead by now).
Believe me, we had to go back in some archives to figure this one out. Finally, one of our attorneys guessed that this must be that short-lived transaction in which PAC had to resign (due to non-payment–despite repeated notice, and non-cooperation, and what was perceived to be your own desire to force the property into foreclosure) long before it ever got started.
Mr. (Mrs.) Mosby, I am honestly (and I’m being very sincere here) sorry for the discomforts you say you’ve suffered; but I’m certain that you know they just were not in any way at the hand of, or the fault of, the PACTrust. And you are also quite aware, I’m sure, that had our advice been taken in the beginning (re. the Escrow Demand); and that had you merely honored your payment obligations, none of what you report would ever have happened. But perhaps even more importantly: Why on Earth would you blame the PACTrust™, the Trustee or the Collection Service (much less Cal-Equity) in a public forum like this? These companies and their owners were not even remotely responsible for, or involved in, whatever it was that transpired between you and your old high school friend (Zeno?).
If you honestly thought there was some failing with the PACTrust, and/or that it, within itself, had somehow damaged you financially, why weren’t any of its elements or owners named in your legal actions?
Please… don’t slander the messenger, for goodness sake! We were on YOUR side, and presumed you understood and respected that.
Bill Gatten
(A bit more humble than before)
A few questions. - Posted by FJW
Posted by FJW on April 09, 1999 at 12:39:04:
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Whom or what company, is the trustee, to the trust?
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To whom or to what company, do you make the payments?
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Were you ever behind on your payments?
FJW
Mistakes And Your Conclusions… - Posted by JPiper
Posted by JPiper on April 09, 1999 at 12:38:45:
First, let me start with a general statement. A trust, whether it is a PACTrust or any other type of land trust, did NOT create your problem. A land trust is simply a title holding vehicle. What created your problem is that you bought a property out of foreclosure and then TRUSTED the seller (someone who had already shown that he was financially unstable) to receive payments from you and to make payment on the loan.
Why would you have trusted the seller in this regard? Did the Realtor (your Aunt) tell you that the seller could be trusted? Did the question about the reliability of the seller ever occur to you? Are you knowledgeable enough to have thought about this issue?
So your conclusion and my conclusion are considerably different. While I certainly empathize with your situation, I think it’s quite obvious that your land trust wasn’t the culprit here. The culprit was a seller who didn’t make the payment, a seller who you trusted to do so. While it may be a bitter pill, in the end you were the one who agreed to send the payment to the seller, and therefore, probably due to lack of knowledge on your part, had a hand in your own fate.
Other problems. You made the seller trustee?.again, someone who had already shown financial instability. This was a terrible idea. The trustee COULD have been Mr. Gatten’s trust company, which would have included a third-party collection service for the payments. But this costs money to implement. Why didn’t you spend this money? Certainly Mr. Gatten wouldn’t have advised you to NOT use his services?.not when he stands to profit from that use. Rather, my guess is that you either received bad advice from your Realtor (your Aunt), or you opted to save yourself the money (sometimes called penny-wise and pound-foolish).
Frankly I understand your anger at your current situation. Most of us would undoubtedly feel the same. But your anger is misdirected. It wasn’t the PACTrust which failed to make payments?.it was the seller who you appointed as trustee. Had this trust been set up properly, this result wouldn’t have happened.
I believe that there were other actions that you could have taken prior to this?.but your details are sketchy and things that you COULD have done are irrelevant at this point. I don’t see a way out of this for you. You will be evicted. HUD will ultimately put this house back on the market?.and if you’re still interested and financially capable you can buy the house at that point.
JPiper
Re: PACTrust - Maybe I Figured This One Out - Posted by de1159
Posted by de1159 on April 09, 1999 at 19:24:46:
NO NOT ME…
It really does not matter because what is done is done and I really hope this kind of thing does not ever happen again, I think part of what went wrong here is a realtor misleading along with her nephew… I will try to offer the mortgage company to purchase it when I can figure out who to offer to…
Re: Mistakes And Your Conclusions… - Posted by James Pruett
Posted by James Pruett on April 09, 1999 at 20:45:51:
JPiper -
Great post! I have enjoyed reading your posts for a few months now. This one really hits the nail on the head and has prompted me to chime in with an “amen”.
I have spent a lot of time with Bill lately and have found him to be a class act. It is shame that Bill has had to take a few hours out of his day to defend himself on this, when clearly the PACTrust was not the culprit in this sad situation.
I am in the throws of putting together PACTrust deals now and have every confidence in their structure and benefit as an investment tool for the savvy investor. Thanks