Is A Silent Invasion Upon Us? My Wakeup Call To The Department Of Justice!

Having been in the mortgage industry years ago, I still receive emails notifying me of new programs, lenders, current interest rates, and news. I normally do not pay much attention until I received an email notice yesterday titled “No Income Docs” with the following:

Foreign National
4.75% 5/1 ARM
12 months PITI reserves min
65% Max LTV
Loans to $2M
No Income Docs
No Employment

The sender of this email was a company out of California calling itself “The Lending Answer.” (See: The Lending Answer – Home (mypowerlender.com)). My curiosity got the best of me and I decided to dig into this a bit further. What I see on the surface is nothing short of alarming.

 

First, there does not appear to be any entity registered in California under the name “The Lending Answer.” The address listed for this site belongs to an entity called “M&T Escrow, LLC” which is under suspension by the California Franchise Tax Board. “M&T Escrow, LLC” and “The Lending Answer” are operated by a man named Tom Costabile, a movie producer and screenwriter in California. But these facts are not what alarms me. It is the following statements and guidelines posted directly on the website that sends up the red flags. Here is what it states under “Foreign Programs” (Bold for emphasis):

Foreign National

Investing in the United States can often prove to be a little difficult and for many reasons. Especially in Real Estate. Many foreigners will experience that most American lenders require various documentation that a foreigner just simply cannot provide. Visa’s, social security numbers, domestic and foreign credit reports, employment in the US, domestic tax returns, domestic assets…the list goes on. It’s become increasingly difficult for an American Citizen to obtain a mortgage in the US and for a foreigner it’s almost impossible.

The mentality behind our Foreign National Program is simple: We want your business. Forget about what other lenders require. We don’t need any of it. All we need is your desire to invest in the US and we’ll handle the rest. Welcome to the simpler side of America.

Here we see an admission that getting a loan for real estate by a foreign party is almost impossible, but “The Lending Answer” appears to have a solution of getting around government red tape. The Guidelines include the following:

• Current US Status is not required nor verified.
• No Social Security Number is to be stated on 1003 and no credit report of any kind will be pulled (Domestic or Foreign).
• 2-24 months reserves requires the Borrower be employed in another country for a minimum of 2 years and an
  Employment Letter reflecting income and status must be obtained (Not Verified).
• 12-24 months reserves require Income is to be stated at a maximum of 40% DTI.
• 24 months reserves will be NO DTI.
• For Foreign funds, a Bank Letter on letterhead reflecting the borrower’s
   daily average balance for 3 months and current balance will be accepted
     in lieu of bank statements (Not Verified).
• Present Address of borrower must be a foreign address (Not Verified)
   and Mailing Address must be a domestic address other than Subject Property.
• Up to 100% Gift Funds Allowed. Minimum 5% of Purchase Price + Reserves must be Borrower’s own funds Sourced and Seasoned for 2 months.
• No max properties owned/financed.
• Funding is taking approximately 30 days from time of submission
   for both Purchase and Refinance transactions.

** CA, IL, GA, MA, MD, NJ, NV, NY, TX, WA **APPLY NOW

** Unlimited Loan Amounts are taken on a case-by-case basis and decision will be based upon compensating factors of Borrower’s strengths such as High Reserves, Excellent Credit, etc.

 

These guidelines are as, if not more, egregious than I have ever seen. They are far less restrictive for foreign nationals than they are for U.S. citizens? And, here is their “Private Lending Program”:

 

Private Lending

Our philosophy on Private Lending is simple: Property Based. Our Private Money loans are solely based on LTV and property location. Period. We do not require credit, income, reserves, or even appraisals most of the time and the best part is we will close your loan in less than a week.

Although the cost of Private Lending is higher than our more conventional products, you get what you pay for. Simplicity and Peace of Mind is our goal on all Private Transactions and we will let you know within hours if we can fund your loan. If you need to close TODAY without any headaches you will not find a more reliable source.  Guaranteed.

All Property Types

• No Appraisals
• No Income
• No Reserves
• No Credit
• No Max C/O
• 100% Gift Funds OK

Folks, this smacks of so many illegalities I cannot begin to list, and opens the door wide open for money laundering, tax evasion, home title theft, terrorism, you name it. I guarantee this type of activity is widespread with no one within our department of justice paying any close attention. As I see it, this is brazen and dangerous! They state in the “About Us” section that their lending is perfect for:

Foreign National’s from all over the world who want to invest in American Real Estate and do not possess a Visa or American income; Real Estate investors who require a fast close without the headache of the typical paper chase; wealthy individuals who do not wish to share their private information to obtain a mortgage; 

So where “in the world” is the money coming from, and who is behind this? George Soros? Al Queda? These types of transactions cannot occur without a network, especially title and escrow companies willing to look the other way. This is a wakeup call! If U.S. law enforcement, tax authorities, and judiciary do not start paying attention, our country will experience a silent invasion; a mass foreign takeover of U.S. properties through foreclosures, one property at a time. I suspect we have been on this path for quite some time now, but with the next foreclosure crisis about to hit, if these foreign actors are allowed to remain stealth and operate, our new neighbors could very well be (fill in the terrorist organization).

 

Bill Paatalo

Private Investigator – OR PSID# 49411

Bill.bpia@gmail.com