Real Estate Revealed

#11 - Matt DesRochers, Bankruptcy Real Estate Attorney

Eric Wilson
January 5, 2021

SUMMARY KEYWORDS

homeowner, foreclosure, short sale, real estate, client, investor, people, forbearance,months, matt, loan modification, buy, file, paying, lender, property, deal,point, years, bank

SPEAKERS

Matt DesRochers, Dave Seymour, Intro Voice Over

 

Dave Seymour 00:35

Wow, here we are. This is Dave, Seymour, your host of real estate revealed 104 pointnine FM and a very Happy New Year. As I've said, on the shows before, and I'llsay it again this week, this is not your home and garden, or your HGTV realestate show. This is where we delve a little deeper, we talk about real estatefrom the perspective of finance, we talk about real estate from the perspectiveof investing, and some of the challenges that people face with real estate andI personally believe we're gonna have some challenges this year 2021, it'shere, we're still challenged with COVID. Today and, and all of the scars, thebumps and the bruises that it brings with it. But I found in in business thatthe people I surround myself really are a testimony to the success of my business.And I've got an attorney with us. This week, friend of mine I've known Matt forI would say over 10 years, we touched gloves during the crisis of 2008. He wassupplying services that I needed as an investor and services that, you know,America needed as homeowners back then. But I was looking at some of thestatistics on your website, 5000 plus real estate transactions 1200, Chapter711 and 13 cases file, and then over 500, short sales and loan modificationsand, you know, helping clients with foreclosure challenges. So without anyfurther ado, Matt DesRochers. Are you there?

 

Matt DesRochers 02:10

Yes, I am.

 

Dave Seymour 02:11

So Matt, look, I do appreciate you coming on the show today. I appreciate, you know,giving us giving us some time and some of your insights. So that the folks thatlisten to our show, it's Saturday afternoon, it's just past 12 o'clock. Maybethey're you know, I say it every week making lunch for the kiddies or gettingready for an afternoon's activities on a weekend. But you know, our listenersare folks who have a sincere interest in in real estate. Probably the majorityof them are homeowners. And maybe some of them have been involved with the theforbearance program that was put out as part of COVID. But before we delve intothat, Matt, share a little bit about your experience as an attorney what youspecialize in, because you're not you're not just, you know, does it allattorney I mean, you really have specialized and dialed in on specific areas ofreal estate. So for the folks listening, share a little bit about that, and youand your history and what you were doing in 2008 910.

 

Matt DesRochers 03:16

At first, I just want to thank you for having me on, I do appreciate theopportunity. And I'm glad I can give some some insight into for your listenersand some insight into what we do and how I can help and how we help peoplethroughout the years. First, I could tell you that I passed the bar in 1999.And I kind of went out of my own way after that. And from 2003 to 2007 2008. Myoffice focused exclusively on real estate real estate closings and purchase andsale agreements and refinances and and then I could see in 2007 that there wasthere was going to be a shift and a change that the prices, the values of homesand how crazy the real estate market was back then if there was going to besome changes that were coming. And I kind of hit things at the right time. Imade a serious change in philosophy at the office as well as the day to daypractice of what we're doing. I still continue to do real estate work, but Ireally started to focus on people that were in foreclosure and people that arestruggling financially. So from from 2008 even Of course until right now. Ifile probably between 100 to 150 bankruptcy cases a year. Certainly 2020 hasbeen been challenging just because of there's been a foreclosure moratoriumwhich we may touch on. But we're filing about 100 cases a year. And what thatreally tells you is that If I'm filing 100 cases a year, I'm meeting with maybe200 people a year, because not not everybody is going to file a bankruptcy.Some people, every every person that comes in as a different story has adifferent challenge. And what we try to do is we try to look at, what theirstory is, what their circumstances are, on how we can use our 20 years ofexperience to try to accomplish whatever their goals are. One of the thingsthat we try to be we pride ourselves in is trying to give open and honestadvice. We really love the word realistic. If a homeowner or client is realistic,we really like working with them. And we understand that homeowners usuallyonly have one property they're dealing with, they live on Main Street, andthey've only dealing with that property. They're only dealing with thatspecific lender. And they only deal with their story. But we've we'verepresented so many people over the years and so many circumstances that we canbring up a wealth of knowledge to a homeowner of what a likely outcome is goingto be. Hey, man,

 

Dave Seymour 06:12

let mestop you there for a second man, because you're touching on some really, reallyimportant points that, you know, they can get lost in the conversation ifthey're if they're not highlighted. And a couple of things that you talkedabout there. First of all, everybody, every individual brings a story to thetable when it comes to a financial challenge in real estate. And I think Ithink that's important for folks to folks to hear that. But before we get intotheir stories, you said something that I'm not going to leave just hanging outthere because it needs it needs to be highlighted. You said that in 2000 and567. You know, you were just cranking it out doing closings as a closingattorney. And then you said you started to see some changes. And the word youused was is that it was crazy. In 2008 Do me a favor from from because I thinkit's I think this is it, man. This is the nuts and bolts of really what whatwe're going to be covering today in this interview is the fact of what did yousee that you use the word crazy in 2008? What were those indicators as aprofessional real estate attorney all the work that you were doing back then?What was it that in your mind said something's happening? There's gonna be ashift? What what was what was telling you that?

 

Matt DesRochers 07:32

Well,what was telling me that was that there were two just strange things that weregoing on. There were people, homeowners that were refinancing, multiple times,in a one year period, I would meet with with a client and then six months laterand meet with them again. And they were consistently pulling money out of theirhome consistent was like an ATM or a piggy bank, they were just drawing moreand more and more and more paying off cars paying off other debt, rollingeverything in. And you could see we go to a closing and there'd be a documentin the closing package that would say that I'm a plumber and I make $12,000 amonth. And they would give a loan to somebody with with a piece of paper, onedocument that the loan officer prepared five minutes before closing, and theywould give a loan to somebody, no income verification, that's the terminologybut and you start to see that and you just kind of shake your head. And thenliterally what what actually happened was, we had a series of, say four or fivelarge clients. And we were like you said cranking them out 20 3040 closings amonth. And then literally one day, one of our clients was closed, they wouldjust close out of business. And then we could just see right at that point, thevolume would start to shift and at that point, I knew something's gonnasomething's gonna change. There's gonna be when you say client,

 

Dave Seymour 09:02

you'retalking about the lenders, correct?

 

Matt DesRochers 09:05

Yes,that's right. That's right. Right to two or three large institutions, justclose, they would just no longer a business, all the contacts and relationshipsthat we had for years. They were out of work, they were all laid offfundamentals. Right,

 

Dave Seymour 09:19

no fundamentals.It didn't make any sense. Right now I get it, I get it. So that's, that's 2008.And then we know what happened with with the foreclosure crisis, you know, 910and 11. And that was when you pivoted your business to deal more with the youknow, the the financial challenges of the homeowners and I was looking on theside as well. And I wasn't aware that you know, you're not only dealing withyour practice in the in the real estate marketplace, but you also deal with IRSdebt. You also deal with maybe some credit card debt and things of that natureas well. And you really began to fine tune your skill sets at that moment intime. I need to put this out there, Matt, because as an as an investor early inmy career, I was trying to help homeowners the same way you were. And when itcame to the foreclosure crisis and helping them negotiate with banks, helpingthem negotiate debt and negotiate with lenders, as one guy, as an investor, oneguy, it was an incredibly emotional and draining scenario for me to be able tohelp homeowners. And it wasn't until, you know, I touched gloves with you backthen and saw that you had built a system, if you will, very similar to what thebanks had, the banks had all their loss mitigation. negotiators. And what youdid was is you created your own version, I think of what the banks were doingin the sense of you were at the top of the pyramid is the legal representation.And then you had negotiators working underneath you on behalf of your clients.Is that fair? Is that a fair way of describing what you were doing back then?

 

Matt DesRochers 11:01

Yeah, Ithink that that's probably fair. Certainly, my office was always the lead thelead person, and the homeowner would have an attorney client relationship withwith me. Yeah. And I had a series of paralegals that would work with work forme. And we, we've negotiated so many times that we, we understand the thingsthat banks look at, we understand what has to be paid, what doesn't have to bepaid, what can be paid, we understand what Fannie Mae would allow, or FHA wouldallow, or Bank of America, because we've done it so many times. But yes, we wedeveloped a system over years and months of doing it, that we we becameefficient and effective of getting things done. Now, I can tell you thatcertainly there are times when there are transactions that we simply can'tcomplete. But I can tell you that the reasons why those transactions don't takeplace. I've never because of us, it's 90% of the time the homeowner, andprobably 10% time the bank just refusing to participate or refusing to, toabide by the numbers that we've set forth.

 

Dave Seymour 12:17

Therewas there was a lot of there was a lot of animosity towards the banks and WallStreet. Back then I remember dealing with clients myself that were justincredibly unhappy. And more importantly, they didn't, they didn't understandthe rules of the game, right? They didn't understand that there was a clockthat was ticking. And there were boxes that needed to be ticked to be professionaland get where they wanted to go. Matt, we're going to take a quick break. Iappreciate the information you share. And what I'd like to do when we get backfrom this break is to talk about those rules. What is a foreclosure timeline?What does it look like? What's a list pendens? What's the 30 6090? If it goesto a short sale scenario, there are legal rules and regulations around a shortsale. And if if you're worried I'd love for you to describe those so thatpeople are more educated and understanding because God forbid it happens tothem at least they've now got some resources that they can reach out to. So ifyou don't mind hanging in there, we're just going to take a quick break. Okay.

 

Intro Voice Over  13:17

RealEstate revealed We'll be right back.

 

13:22

Today,the real estate market is booming mortgage rates just at historic 30 year lows.And the New York Times recently reported that investors are snapping up realestate at rock bottom prices. And now savvy investors are buying real estate usingtheir IRA that allows them to access their retirement funds to buy propertieswithout paying any penalties or early withdrawal fees. If you have funds inyour retirement account, and you are interested to learn more call horizon forus today at 866-712-2007. That's 866-712-2007 unlock the power of yourretirement account and take advantage of one of the most profound opportunitiesin real estate since the housing crisis 15 years ago, call horizon trustretirement specialist at 866-712-2007. And for a limited time, get our freeUltimate Guide to buying real estate with your IRA that's 866-712-2007 or visithorizon trust calm slash day. Horizon Trust Company is an independent passivecustodian and is not associated or affiliated with and does not recommend topromote or advise any specific investment investment opportunity investmentsponsor investment company or investment promoters or any agents employeesrepresentatives or other upset firms or entities are interested in providinginvestment advice, advocating or endorsing real estate. These options may ormay not be a fit for individual investors investments are not FDIC insured,offer no bank guarantee and may lose value. Horizon trust doesn't receive anycommissions or fees if I invest with any other sponsor.

 

Intro Voice Over  14:46

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Dave Seymour 15:26

back.I'm with attorney Matt de roshe. Yeah, listen to those sponsors that we havethere. You know, Steve Alessi number one number one son I would say for for allof my real estate needs on the brokerage side 617-763-1001 you need thatmortgage? Right? You need that mortgage for that primary residence. GeorgeCoots, awesome, his team standing by 978-777-4663. And if you are going to bethat educated real estate investor, that I'm trying to help you be here, thenwhat does your retirement account look like? Have you ever considered usingself directed retirement accounts? Reach out to the guys that horizon? I mean,what would it be like if you if your retirement account was working at twotimes or three times its current velocity of return? Which would yourretirement look a little bit different? They can help you with that come up asat 866712 to 007. So Matt, Matt, the roshe we were talking prior to the breakthere about the rules and regulations of foreclosure. Now, as an investor, weused to always talk about the 30 6090 day list. Why don't we start there andshare with the folks list pendens and the process of a foreclosure and and whatthat looks like?

 

Matt DesRochers 16:40

Well,let's go back to the point the 3060 and 90 day, I think what you're referringto there is mortgage lates. And right, I think that's what you mean. So there'sthere's data and information that you can buy, where it's been reported to thecredit bureaus, if somebody is 30 days later, 60 days later, 90 days late. Andas a general matter, people are not going to lose their home, if they're 30days later, 60 days later, 90 daily, so far as my office is concerned thatthat's really not something that we focus on, when the heat gets turned onheavily is when you are, let's say 4567 810 months behind. And what happensthere is, and this this concept applies back in 2008 910. And this same conceptapplies even now is that the lender will typically hire a law firm, and theywill file a Service member's complaint against against the homeowner. And thatis a lawsuit that is filed against the homeowner. And it's a matter of publicrecord. And what happens there is that the lender is seeking a determinationthat the homeowner of the property is not in the act of military. So this theservice member complaint is based upon a law that was an act that was enactedin 1940. And of course, that was right around World War Two and half of themale population in the United States was was fighting wars on two fronts. Sothere was a law that was enacted that would prevent banks from foreclosing at thattime when there was a service member, active duty. So the court, the lender isseeking a determination that the homeowner is not an active duty military. Now,of course, most people are not active duty military. So it's just a matter ofprocess for them. They file a complaint, they serve the complaint, then there'sa deadline with or has to respond if the homeowner does not respond, andthere's going to be a judgment issued. And then once that judgment is issued,as long as the lender has met other statutory guidelines, then they would havethe right to foreclose on on property. Now, the different sort of in 2008versus now is that back in 2008, the court system was not prepared. It was likeone day. All of a sudden there were 1000s of these complaints filed and thecourt is the Massachusetts Land Court. And they were not prepared for it didn'thave the staff that didn't have the resources that there was only four judgesat the time. And they just were not physically prepared for it and they werebacklogged and overloaded. And the process back then even though it sounds likea very simple process, sometimes would take a year from the time they file itto the time they get the judgment and they have to advertise it in thenewspaper. So there's a there's a long process But the difference now is thatof course, there are a lot less people in foreclosure as we sit here today, andJanuary of 2021. But that could change that certainly could change with, withwhat's going on right now with with the pandemic and the financial mess we'rein at this point. But what they've done now is a lot of these complaints,you're able, the law firms are actually able now to file these electronically.So in 2008 2009, these law firms would be mailing everything to the court waitingfor the court to open them, and there was a delay there, but now, the banks aregoing to be able to hire a lawyer that can do it from their computer, they'llhave an access account, and they can file the complaint electronically. Sothat's something that's new. That's that's just come out, you know, let's sayin the past six months, so that was coming. I think, regardless of the pandemicissue that was in the works anyway. So it's hard for me now to say with anydegree of certainty to a homeowner while you have at least a year. Right, Ithink that i think that that would be a mistake to say that. I'm thinking now,from the time service members filed, that it's anywhere from could be as quickas two months. I think it's more realistic between three to six months, I thinkthe window is is shorter now. Because the courts have caught up. And certainlyright now like today, the filings are less. But as this pandemic progresses,there is a chance that it could get back to the level that it was I don't thinkit's ever going to get back to the way it was in 2008, nine and 10. Do youthink there's going to be there's going to be an uptick, there's definitelygoing to be a substantial uptick. And let me ask,

 

Dave Seymour 21:53

let meask you this, Matt. So you know, yeah, less less foreclosures is is you know,the the prediction from from Lowe's in the know, and I'm not gonna I'm notgonna argue that point. I would, I would agree with that. 100%. However, if thespeed of execution of the foreclosure process is now in place, and it'sinteresting, you say it just started six months ago, they enacted this, youknow, I don't think there's any coincidences. So if it's if it moves faster,and I was investors, it was real estate investors, one of the marketing slogansthat for one of a better term that we would use is Stop Foreclosure, you know,if you're in the foreclosure funnel, we can help you as investors stop aforeclosure. And the only way we could do that was with the assistance of youknow, somebody like yourself or a service. How do you stop a foreclosure?Right? I know you could pay up, pay any bank fees, any, you know, interest owedany any penalties owed. But you know, 99%, I think of folks that go intoforeclosure, don't come out of it. I might be exaggerating that data, I'm sureyou would have it tighter than I do. But how do you stop a foreclosure? Whatare those proceedings or processes to do that?

 

Matt DesRochers 23:10

Well, Ithink it depends upon the amount of time that I have before a foreclosure isgoing to take place. So give you an example. So somebody has a foreclosure,let's say this Monday? Yeah, um, well, the timeline is very, very short.There's very limited resources that I can do to get the bank to voluntarilypostpone foreclosure. The only way right now would be to do to file abankruptcy petition. Now, if a client has a foreclosure in 30 days or 45 days,then I have a little bit more time. There are some things that that we can do,depending upon the homeowner circumstance, to get the bank to voluntarilypostpone it, where we don't have to go to court to sue anybody. We don't haveto ruin someone's credit by filing bankruptcy. So it depends on the timeline,no, certainly filing bankruptcy. It's a federal statute. You file, it'sautomatic. It's filed electronically. It can be filed 24 hours a day, sevendays a week, you have to be a lawyer to file electronically. You can as ahomeowner file a bankruptcy. But you have to physically go to the court. Youknow, Boston, Worcester and Springfield, but as a lawyer, you can file it, youknow, from anywhere from as long as you have an internet connection. I mean, itdepends on how much time they have. If I have plenty of time, what I would tryto do with the client is I can request submitted a loan modification requestassuming the client qualifies, and that would likely postpone a foreclosure canalso put the property on the market and sell the property. Sometimes just ashort sale. Sometimes it's not. I've had many clients this year, that Wethought we're short sale. And they're not, you know that Brian is sellingpaying arrears and walking away with a bunch of money. So what we do is inthose cases, his client retains us. And what we do is we'll send a letter tothe law firm to the lender, and say, state in the letter that we demand thatthey stop the foreclosure on XYZ date, because the homeowner is or has theproperty on the market, it's actively listed, maybe even at that point, we havea listing agreement or a purchase and sale agreement, and I would show that tothe bank. And I would say to the lender, you know, you can see that thehomeowner is doing something. And I would argue that they're they're thenproceeding with their foreclosure is bad faith. And sometimes those are likelegal words, bad faith, they don't like it when they hear those types of words.So when they see that sometimes that works, that that does work sometimes. Andthat would avoid the client having to file bankruptcy, obviously, as well,writing a letter, and having a conversation is a lot cheaper for a homeownerthan filing bankruptcy, you know that the cost associated with that forhomeowners are significantly different. And we've been we've been successful indoing that. Certainly, if you file a bankruptcy, it's a 100% guarantee that theforeclosure will stop versus requesting a loan mod, you don't know you simplydon't know what's going to happen. And I'll tell you, a lot of people do acombination, they will hire us to do a loan modification or try to sell theproperty. And if those don't work, then they then they transition to abankruptcy, if that makes financial sense for them to do

 

Dave Seymour 26:44

on theloan modification side, Matt, just just for clarity, like you and I, you know,this is a this is a dialogue in our terminology, and we understand all of it,but a loan modification for folks listening is just modifying the terms of theloan correct? The length of the loan, or the or the interest on the loan. Isthat correct?

 

Matt DesRochers 27:05

Yeah. Soa modification is where they take your existing loan, the one that you signedthree years ago, or 12 years ago, and they change the terms of that loan. It'snot a refinance, where a new lender steps in. And what they do is they look atyour financial circumstance, they look at the value of the house, they look atwhether you're the factors that go through would be Do you live in the house?Do you have a job? Do you have a source of income? Is there equity in theproperty. And then the biggest factor right now is whether they've beenmodified before. So if you have somebody that the mortgage from 2004, they'vebeen modified three times since 2004. And they're coming in now. I tell theclient that the more and more you do it, the less and less chances of yougetting one, because you keep going back to that well, you you get on track,and then you fall behind again, because of some circuit, but never thecircumstance happens to be on but eventually the bank will say, we just can'tcontinue to work with you, we want you to the full amount that you owe us, wewant the house and they don't say it in those terms, but they just deny theloan modification saying you've been modified within the guidelines permit. Andit doesn't matter whether you're making 5000 a month or 15,000 a month, they'renot going to give you a modification, because you're beyond the programguidelines,

 

Dave Seymour 28:32

a goalof the modification for the client is to is to have an affordable monthlypayment.

 

Matt DesRochers 28:37

Yeah,so. So what they try to do is they take what you're behind, let's say it's$50,000. And they take that and they'll roll that into the principal unpaidprincipal balance. So if you owe 300, and then you have 50, behind, you wouldnow owe 350. And then they would try to either recast the loan into a 30 year,or I've seen them do a 40 year, and then they lower the payments who know backin the day in that 2008 to 2015 range, they would do like a 2% rate, which waslike free money 2% if you couldn't get anything a 2% back then. Now they're notdoing that right now. It's it's probably more like three and a half to five anda half percent that that program was from the Obama administration, and thatthat's over and done with at this point. So now, what I tell clients is look atyou, unfortunately, are not dealing from a position of power, that the bank hasall the power at this point. So if they give, they're willing to work with you,and they give you a modification, even if you're not in love with the payment,if you can afford it, you got to do it if you want to keep the house becauseit's it's not a negotiation. They don't send you a letter and say these are theterms and then you write them letter back say, Well, I don't like those terms.I want these terms. That's not how it works. They give you the numbers andthat's the way it is. You either take it or leave.

 

Dave Seymour 30:07

So hishis the bottom line on that one, the banks and control. Is that a fairstatement

 

Matt DesRochers 30:11

100%

 

Dave Seymour 30:13

hold onto that thought Matt will go to a quick break. When we get back from thisbreak. I'd love for you to unpack the process of a short sale. So a bankruptcywe covered we covered loan modifications. If the loan modification fails andcontinues to fail, the next option would be a short sale. We're going to take aquick break and then we're going to unpack the short sale this is Dave Seymourwith real estate reveals.

 

Intro Voice Over  30:37

RealEstate revealed We'll be right back.

 

30:42

Stevemolestus of Solaris realty has intimate knowledge of the North Shore marketwith over a decade of experience and record of 300 real estate transactions.When it's time to buy or sell property. Give Steve a call directly at617-763-1001 that's 617-763-1001

 

Dave Seymour 31:10

you everwondered how to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? Do you know what analternative investment strategy is? Well tune in for all the answers on my showreal estate revealed this is Dave see my might recognize me from the hit TVshow flipping Boston. I'm also the CEO and co founder of freedom ventureinvestments to smarten up your real estate and know how by tuning in everySaturday. For all investment details visit us at info at freedom venture.comslash 104 point nine call my team at 781-922-4418. Today the real estate marketis booming

 

31:43

mortgagerates just at historic 30 years old. And the New York Times recently reportedthat investors are snapping up real estate at rock bottom prices. And now savvyinvestors are buying real estate using their IRAs that allows them to accesstheir retirement funds to buy properties without paying any penalties or earlywithdrawal fees. If you have funds in your retirement account and you areinterested to learn more call horizon for us today at 866-712-2007. That's866-712-2007 unlock the power of your retirement account and take advantage ofa one of the most profound opportunities in real estate since the housing crisis15 years ago, call horizon trust retirement specialist at 866-712-2007. And fora limited time, get our free Ultimate Guide to buying real estate with your IRAthat's 866-712-2007 or visit horizon trust calm slash day. Horizon TrustCompany is an independent passive custodian and is not associated or affiliatedwith and does not recommend promote or advise any specific investmentinvestment opportunity investment sponsor investment company or investmentremote or any agents employees, representatives or other such firms or entitieshorizon trust is not providing investment advice, advocating or endorsing realestate. These options may or may not be a fit for individual investorsinvestments are not FDIC insured, offer no bank guarantee and may lose value orrising trust doesn't receive any commissions or fees. If I invest with anyother sponsor.

 

Intro Voice Over  33:06

You'relistening to real estate revealed with Dave see more from Amy's living Boston.

 

Dave Seymour 33:11

Man,we're covering a lot of ground today. Happy New Year. I know I say Happy newyear and we're talking about an unhappy topic. But the definition of luck isbeing prepared when an opportunity arises. And preparation is knowledge. And myfriend attorney Matt LaRoche has with us he's dropping the dropping theknowledge, sharing insights of his decades of experience in dealing with realestate finances from from from a client standpoint. So Matt, we coverbankruptcies before we went to the break there a little bit and that I know andthat's final, I mean, a bankruptcy sits there for many, many years on a creditreport. loan modification is a strategy to give the homeowner some, somebreathing room with that monthly payment and they can adjust rates and lengthof loans. But if those fail, the next strategy is is the short sale. And that'swhere you and I met. I mean, you had clients that we bought to you where wewere able to help with the acquisition of the property and you did all of thenegotiating and the heavy lifting on the process of getting it through througha short sale. So break that down for us what is a short sale? Who's qualifiedwho's not qualified? And what are some of the laws around it because there'sthere's certain things you can and can't do around a short sale process.

 

Matt DesRochers 34:32

A shortsale of real estate is a situation where a homeowner is trying to sell theirproperty and they owe more than what the home is actually worth. And certainlythat concept has changed over let's say the past two years, because values ofhomes have gone up. That doesn't mean that they're short sales don't exist.They still do. They're not as as plentiful as they were 10 years. years ago,but they are still there. And what we do, of course, is we have an attorneyclient relationship with a homeowner. And what we do is we try to get thehomeowner, it's really an exit strategy is really what it is. The bottom linefor the homeowner is they do end up losing the house. And when they'veexhausted all of the previous avenues of bankruptcy, a loan modification, orreinstatement, they've tried everything, and it comes to the realization thatthose things are not going to work. So the only choice I really have is to sellthem is to sell the home. In the benefits to homeowner in a short salesituation is they get time, they're able to exit under their own terms andconditions. They're not being foreclosed on and evicted and having people ontheir front stairs and investors and people, new owners coming knocking ondoors and threatening evictions, you get to leave under your own two feet, youhave to have a little bit more control. And that goes a long way for people.And sometimes the timing is good, too. But the average timeline for a shortsale is four to six months. And I certainly have seen them go on longer thanthat. And sometimes the homeowner just wants that that additional time so thatthey can get their financial house in order to get their physical house andfigure out a place where they're going to go and their family's going to live.The other benefits to them is that what we request on every short sale isreally two things. One is a waiver of the deficiency. Yeah, that's, you know,if they owe, let's say 400,000, and it's worth 300,000. Technically, they stillwould owe the bank the $100,000 difference? Well, we do as part of the processis we get some type of a document that is going to waive that $100,000. Andthen of course, they don't owe that money. I think there's there certainly issome benefit to that for the for the homeowner. And they do have some peace ofmind that when they leave the house, for the last time they they sold theproperty that they can really leave. And they're really closing the chapter oftheir life. And they know that there's not any not going to be any morerepercussions for them financially. And they can kind of move on.

 

Dave Seymour 37:28

That's amoment where they can exit with dignity. You know what I mean? Yes, I think Ithink that's an appropriate word to use there. And I think, yeah, it's importantwhat you say about that deficiency as well, because there were a lot of whenthe crash happened in 2008. And I know you saw this as well. And there wasthere was all of a sudden everybody was a short sale expert. And there werethese these these companies that popped up nationwide and locally, and theydidn't necessarily always have the the clients interests at heart. And that waswhat what drew me to you as an investor back then was, as you had, you know,you had the professional relationship with the clients that that attorneyclient relationship, where, you know, we had a almost like a fiduciaryresponsibility, you had a legal and ethical responsibility. And the client'swell being was taken care of, because there were, there were folks who just jumpedon the short sale bandwagon as homeowners, you know, thought it was their exitstrategy. And then six, eight months, a year later, they were getting, youknow, taxable income from the bank for 175 $200,000, which just put them deeperin a hole going forward. So I only bring that up, Matt, because if thishappens, or when this happens, and people are, you know, in that position toyou know, be be wary of that, right, connect with, with the with the rightpeople with the professionals when it comes to these services. So on the shortsales side is a scenario for you, I'm going into a short sale, I can't affordmy house anymore, I owe more than it's worth. I've got a buyer that's going tocome in and the bank says, you know, yeah, we'll take 300 300,000 for yourhouse. And you know what I want to do, Matt, I want to sell it to my son, can Ido that?

 

Matt DesRochers 39:13

No, allthe parties involved in the transaction, have to sign an arm's length F. David,that basically says that the person that's buying the property is not relatedto you. That's the seller by blood, marriage, or commercial enterprise, andthat obviously, would not be a violation of that affidavit. Now, there havethere are cases where you can ask the bank to avoid signing that document. Ihave seen that happen, but that is very, very rare. And what they're trying todo, of course, is prevent people from you know profiting off of not paying,paying the payment. Now, the big question that I always get about that issue.Because homeowners that the seller themselves, my client, if they don't, theydon't really care. In some cases, they'll say, Well, I don't mind signing thisdocument. But I say, well, that's fine. Because you're like losing your house,you're struggling financially. So it's not a big deal. But the person that'sbuying it, your son, your uncle, your cousin, they have a lot to lose, becausethey have to sign that document to, and they are in a financially much morestable position in urine at this point. So certainly, if I'm involved, and I'mrepresenting the seller, I can't represent the buyer. So the buyer is going toget their own attorney and their attorney, hopefully, he's going to say thesame thing that I'm saying. And I try with a 10 foot pole, try to avoid thosetypes of transactions right from the beginning, I get that question a lot. Andif I feel I don't feel comfortable with a homeowner in those types ofsituations, I would, I would, at some point declined to represent that person.If they were insistent upon that type of circumstance. It doesn't make anysense as well for me to do four or five, six months worth of work. And then allof a sudden, I find out at the end that the person buying it is the neighbor orcousin or somebody and I'm going to be upset because I did all this work. Andnow I'm not comfortable. And so

 

Dave Seymour 41:26

whatabout this one? Because I used to get this one all the time when we were doingshort sales. Yeah, short sale my house to you like I'm an investor, I'm goingto buy the house, right? The homeowner would say, yeah, I'll do a short salewith you. You buy the house, but I want you to rent it back to me. Can we dothat?

 

Matt DesRochers 41:43

I thinkthat that would likely violate the short sale as well, because because that isa commercial enterprise, you're entering into a business transaction. Some someof those affidavits, they are a little bit unique. Every bank uses a varianceversion. And some of them actually say exactly that. They say, you know, thereis no agreement between the buyer and the seller to rent the property back tothe person. So yeah, yeah, that would be a that'd be problematic as well.

 

Dave Seymour 42:13

Whatabout buying the property? I'm just throwing these all out? Yeah, I know theanswers. But it's a great way. It's a great way to get some education out thereas well. Yeah, we'll do a short sale, I'll buy the house for I don't know,maybe 300,000. I'm an investor. And then what I'll do is I'll pay the homeownerlike $40,000. On top of that, outside of the close it, am I allowed to do that.Can I pay for like, no,

 

Matt DesRochers 42:39

absolutely,positively. Mom, man,

 

Dave Seymour 42:43

I wantto give some money, man, what are you doing?

 

Matt DesRochers 42:46

If youwant to commit mortgage fraud, then by all means? You can go and do that. Butno, you you could not do that either, I'm sure with the amount of transactionsthat was going on sure that those types of things I'm sure that they have. Butyes, you would be violating federal law. There are several people that havegotten in trouble nationwide and locally, in Massachusetts, in New England thathave gotten in trouble for those types of those types of exact things. Andwhether you're an investor, whether you're a real estate agent, whether you'rea hard money lender, if you get windows, things like that, I tell people torun, run,

 

Dave Seymour 43:32

run runaway.

 

Matt DesRochers 43:34

Yep, theamount of money you're gonna make, it's not worth it. There's always anothertransaction after this one. And I, I take my own advice, I do the same thing. Ifeel like there's a client to take the client.

 

Dave Seymour 43:51

Alright,but we got it. We got a couple of minutes. And I would like your insights, ifyou will, Matt, your take on the cares Act, the one that was passed back inMarch, April, May, what do you see the landscape looking like in the in theresidential marketplace with regard to the forbearance and those kinds ofthings and I know we've we've got we've got short time here before we go intoour next break. But I'd appreciate maybe if you could sum it up what you whatyou anticipate and maybe what you're doing in your own business to get readyfor what's coming next.

 

Matt DesRochers 44:22

So theCures Act is still good law. Back in March, that was passed. The things thatrelated to my practice specifically was there was some changes to thebankruptcy code that were helpful for existing clients and future clients thatextended the timelines. There was also a moratorium that was placed on allfederally owned federally insured mortgages. So Fannie Mae, Freddie Mac, FHA,VA, and then there were these forbearance incentives that were presented. Thatand this is where there's been a lot of talk in the media about But what is aforbearance? And, and I've been presented with actual documents of what aforbearance is, and you know, I tell the client, you have to be very, verycareful, you have to read what the forbearance language says. And what I'veseen that they say is they'll say something like, well, we're gonna, you don'thave to make a mortgage payment for, let's say, six months. And the nextlogical question is, okay, when we get to the seventh month, what happens withthe six months that I that I haven't paid? Right? What most of them say is,well, we'll deal with that in when we get a seventh month. Yep. And that is theproblem. And what that here's what that tells me, that tells me that they'regoing to say to you in the seventh month, we'll reassess. And then what they'lldo is okay, we're going to give you another three month forbearance. And thenthey'll ask the same question, well, what will happen after these three months?Well, we'll address that at that time. And then what will end up happening is,eventually, they're going to stop giving out those forbearances. And then allthose people are going to be scrambling. And they're going to say things like,well, your representative on the phone told me that they're going to roll itinto the wall. Well, I don't know whether those compensations existed or not,that's why you got to read the document. So if the document certainly says it'sgoing to be rolled in, then they would have to roll it in, if it is doesn't sayanything, or it's silent, or it says we will address it at that time, then whatis addressing it at that time me in my mind, what that means is they're goingto send you a bill for the however many months that you are behind, and youhave to pay it in full. Or they'll still say we have a loan modificationprogram for this. And you have to submit for a loan modification. But the factis, there's no guarantee you're going to get a loan modification. And that'swhere this 2008 scenario starts to come back. It sounds like all these peoplewho now are in forbearance, maybe they're not working now. They go back towork, and six months from now. And now they go back to the lender, and theydon't qualify or just kind of there's, there's no guarantee that there's goingto be a modification for you at that point. Now, we're flashback to 2008 2009.And that's when things are gonna go haywire.

 

Dave Seymour 47:23

Man, weneed another two hours to cover all the ground that I want to cover with you.Are you open to coming back on the show? Maybe in the next six weeks, eightweeks or so I'm picking up from this point and continuing again, because Ithink the conversation, we might be a little bit early in this conversation? Idon't think so. But I also believe that it would be very powerful to have youback on and share some more of what you see going on and see where some ofthese forbearances have landed, would you would you be up for doing that?

 

Matt DesRochers 47:57

Absolutely.All right,

 

Dave Seymour 47:58

cool.Cool. Let's do this. Matt, where can folks get ahold of you? If they if theywant more information? If they they want to have a consultation with you?Because I know you do that for free? Where can they get ahold of you man?

 

Matt DesRochers 48:10

So myoffice number is 781-279-1822. My office is in reading, reading mass. The websiteis MTD law and they.com. That's my initial so MTD, la w ma formassachusetts.com. We do of course offer free consultations for everybody, ofcourse because of the government. gov rules and because of what's going on withCOVID-19 right now we of course offer zoom FaceTime consultations. We're happyto do that. We want everybody to be comfortable getting good advice and besafe. All right, I

 

Dave Seymour 48:52

love78127918 to two attorney Matt derosa in red in Massachusetts, Matt, Iappreciate you man. Thanks for sharing all the information.

 

Intro Voice Over  49:05

RealEstate revealed We'll be right back. Thinking of purchasing a new home secondhome or investment property or maybe refinancing to get a lower rate,consolidate debts drop PMI or need Pashto to do home improvements. George kudosmortgage Officer of cross country mortgage and Danvers is just a loan officeryou will need as Essex County's top loan officer with more than 8000 past happyclients in over 30 years experience. George and his team will be happy toassist you with rates the lowest in history Don't hesitate act now you may beable to save 1000s of dollars call George at 978-777-4663

 

Dave Seymour 49:44

you everwondered how to create cash flow outside of your job income or retirement plan?Have you considered large commercial real estate assets? You know what analternative investment strategy is what tune in for all the answers on my showreal estate revealed this is Dave see my might recognize me from the hit TVshow flipping Boston I'm also the CEO and co founder of freedom ventureinvestments. To smarten up your real estate know how by tuning in everySaturday for all investment details, visit us at info at freedom venture.comslash 104 point nine, call my team at 781-922-4418. Steve molestus

 

50:16

ofSolaris realty has intimate knowledge of the North Shore market. With over adecade of experience and record of 300 real estate transactions, when it's timeto buy or sell property, give Steve a call directly at 617-763-1001. That's617-763-1001

 

Intro Voice Over  50:45

you'relistening to real estate revealed with Dave see more from Amy's flippingBoston,

 

50:50

I feel alittle bit depressed,

 

Dave Seymour 50:52

I gottabe honest with you. I mean, it's a new year, people are making new year'sresolutions, you know, lose a couple of pounds, maybe get rich this year, getrid of the COVID Cloud that's hanging over our heads, you know, the short salediscussion, the financial discussion around real estate, you know, it can be alittle bit depressing. But here's, here's what I found. And I found this backin 2008. And I'm seeing it again now in the commercial world is that theostrich mentality is is a very dangerous strategy. And you know what I mean bythat, right? I'll just worry about it tomorrow. Worry about it tomorrow, worryabout tomorrow off air as the attorney Matt derosa was leaving. He said, youknow, the strategy is for a lot of people is kick the can down the road. Doesthat sound familiar? Does that sound like the federal government all the waydown 6.2 $6.5 trillion in debt. And we'll let you know the Biden administrationdeal with it, or the one after that, or the one after that. It's the mentalityof burying your head in the sand and kicking the can down the road that justcauses damage? It's a painful, damaging way to be and, you know, the discussiondoesn't need to be I believe depressing. I think, I think knowledge is powerwhen implemented. And how are you doing? That's the question that just needs tobe asked, Are you okay, you know, does the financial strategy that you have inplace around your primary residence? If you're an investor, what does that looklike? Are you adjusted in the stock market, which is incredibly valuable rightnow, I believe, you know, Tesla is trading on future valuation not on not onreality. Amazon Apple, right. They have part of that what is it Fang? Is thatwhat they call it? The Fang stock Google and Amazon and Netflix? And I mean, isthat your world? And if it is, are you okay with it? Is your financial advisorgiving you all of the layout of the land with regard to COVID? Yeah, I am theCEO of freedom venture investments, we kind of didn't touch on that. At thebeginning of the show. I went straight into it with with the attorney because Iknow how powerful the information is that he has, but I got some powerfulinformation to the CEO of freedom venture investments, you may recognize my mydulcet tones, and my slight English accent from the hit TV show flippingBoston. And you might not and that's okay, too. But we are a real estateinvestment company. And we take care of the fears, doubts and insecurities forpotential investors, folks who are maybe looking to retire in the next 10 1520years. Why don't we do we take investment capital from accredited investors.And we put it to work in our real estate investment fund. And you can get allof the details about what we do my team, my resources at freedom venture.comWWE dot freedom venture.com You can also call us directly at 781-922-4418. Butwe've been in a position and I've been in a position now for for almost a yearwhere we started to look at the landscape that was created with COVID. And justto the attorneys point that the forbearance is and the single familymarketplace and the amount of migration that we've seen because of COVID I readsome data today blows me away. rental property in New York City. Is that thesame price it was 10 years ago. So that again, rent prices in New York City areat a 10 year low. They're where they were 10 years ago. 333,000 people haveleft New York City, the migration out of Boston, the migration out ofPhiladelphia, the migration out of DC the migration out of all of ourMetropolis is Israel. And with migration comes that opportunity again, right? Hey,you're just lucky no I'm prepared when the opportunity arises and thepreparation is to be able to buy Good cash flowing real estate assets. Now I'mnot talking about a six fam or a three Decker in East Boston. We invest inlarge multifamily assets in the Gulf Coast region of Florida. And look, Isnowbirds love Florida, don't we, I mean, we got some nasty snow recently andit was cold again and my partner's down in Florida just making fun of mebecause I'm sitting up here with my my sweater on and my heater gone. But weinvest in cash flowing assets in the Gulf Coast region of Florida, we buy 40 toabout 140 unit apartment complexes. And the investment strategy that we bringinvestors into retail investors, folks, just like you may be listening to this show,folks who are looking for a place to put capital to diversify in theportfolios. And I'm telling you right now, listen to me carefully. Yourfinancial advisors won't share this information with you. It's not in theirtheir book or tricks, it's not part of their offerings. This is outside of thenorm. This is outside of the stock market. But this is what the one percentershave been doing investing in real estate for decades, to create generationalwealth. So we invest in large apartment complexes, 40 to 140 unit complexes,Gulf Coast region of Florida for tamper the need in Fort Myers all the way upto Orlando. And we buy these properties under a strategy that's called core

 

Matt DesRochers 56:27

Plus,the core

 

Dave Seymour 56:29

plusstrategy means this in simplification core means cash flow. So it's alreadybringing in money when we buy it. Plus means we have the ability to repositionit, we usually do this through getting rid of bad management and putting in amanagement team, reducing the expenses, increasing the income by raising therents a little bit leasing up empty units, repositioning the asset, and themore money an asset makes or brings in, we call it noi net operating income,the more valuable that asset is. And it trades at a higher cap rate is what wecall it or capitalization rate. But you don't need to worry about all of that.Basically, it's like the TV show that I had flipping Boston only on steroids.Instead of taking one house or a three unit, rehabbing it, making it morevaluable and selling it on we take 40 to 140 unit apartment complex is and kindof do the same thing with it. And I've got some pretty powerful businesspartners, Kevin Harrington from the TV show shark tank is our businessdevelopment member of our team, my partner, Walton, oh, Vicki, he's a quarterof a billion dollars worth of these kinds of transactions in the Floridamarketplace. 2021 is here, God willing, COVID will be a just a painful memorysooner rather than later. And as the dust settles, and we all begin toreadjust. And hopefully the small businesses that survived are beginning toturn the corner. Yeah, your retirement accounts hopefully are stabilizing thatthey're okay. What is it? What are you going to do different this year, weoffer institutional quality investments to you the investor, accreditedinvestors, minimum investments are $100,000. And we can give you information ifyou don't meet that accreditation today. That's okay, talk to us, call us at781-922-4418. And let's let's have a conversation. Go to our website, freedomventure.com. Take a look on there at the assets that are in our pipeline,you'll have a chance to meet our team through video and through podcasts.You'll also be able to listen to some of the past episodes of real estaterevealed. We're now in a couple of different marketplaces because we're we'reairing it out as a podcast as well. So we're getting traction everywhere. And Itruly appreciate all of the questions and the conversations that we have offair. I get to understand more about what the needs are and I am listening toyou, the homeowner, and we can help you there as well. When you go to thatwebsite, click on freedom venture homes, FM homes as well. We're able to helpyou out with your home challenges as a homeowner. So as I say every week lookafter each other. God bless next week. I'm bringing on a fantastic lady. Hername is Pam bardy. Pam is a developer right here in Boston. She's a beautifullady. She's a young woman, she's aggressive and she's got a story to share withus as well. So God bless and I'll talk to you all next week. Dave see more realestate with

 

Intro Voice Over  59:36

anysecurities being offered are under an exemption provided by sec regulation Drule 506 c only accredited investors who meet the SEC regulation d 501.accredited investor accreditation standard form provides suitable verificationof accredited status may invest into these offers. Any historical performancedata represents past or past performance does not guarantee future results.Tune in again next Saturday at noon for real estate revealed hosted by DaveSeymour, the star of age loving Boston and CEO of freedom venture investmentsin Denver.