Sub2 - Is it legal?

General Real Estate Investing
21

Raj,

I think that once NC 725 passes, you will hear a different tune out of “da wiz”.

Below are the proposed definitions and exemptions subsection of the bill: I point out sections (a) (2) and (a) (4) in the definition section which INCLUDES the USE of TRUSTS in addition to individuals as being governed by this act.

Of course Gary will spout the his trust is exempt because of subsection (b) (1) however that loophole is partially covered under (b) (3) limiting you to ONE transaction per year and he will say that states can’t override federal law, but we all know that states can still add to and interpret federal law as well as tell you how they will allow you to operate within the state’s borders.

Here is a cut and paste of the proposed law:

"§ 66 340. Definitions; exemptions.
(a) For purposes of this Article, the following definitions apply:
(1) Due on sale clause. – A contract provision which authorizes a lender, at its option, to declare due and payable sums secured by the lender’s security instrument if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender’s prior written consent.
(2) Person. – An individual, a corporation, business trust, estate, trust, joint venture, partnership, association, two or more persons having a joint or common interest, or any other legal or commercial entity.
(3) Real estate resale dealer. – Any person who advertises, initiates, or structures a real estate resale transaction.
(4) Real estate resale transaction. – Any agreement however denominated or structured with right of possession in the buyer through which a person who is a buyer contracts with a person who is the owner and seller of residential real property to transfer real or equitable title to the residential real property to the person or the person’s agent, representative, or designee or into a trust for which the person or the person’s agent, representative, or designee serves as either trustee, beneficiary, or both and that remains subject to an existing deed of trust or mortgage.
(5) Real estate resale transaction seminar. – Any seminar, course, materials, or similar commercial educational program that purports to instruct how to become a real estate resale dealer or engage in real estate resale transactions.
(6) Subject to. – Taking either legal or equitable title to real property without extinguishing the existing deed of trust or mortgage before assuming legal or equitable title. For purposes of this Article, the phrase ‘subject to’ does not include a transaction involving a purchaser who expressly assumes the deed of trust or mortgage at the time of the transaction and promptly satisfies the requirements of the lender for release from liability of the seller or original mortgagee.

(b) This Article shall not apply to the following:
(1) Any real estate resale transaction exempted from the preemption provisions of the due on sale clause prohibitions pursuant to 12 U.S.C. § 1701j 3(d).
(2) Any real estate resale transaction where the real estate resale dealer is at the time of the real estate resale transaction licensed by the North Carolina Real Estate Commission pursuant to Article 1 of Chapter 93A of the General Statutes.
(3) Any real estate resale transaction where the real estate resale dealer has engaged in no more than one real estate resale transaction in the previous 12 months, including such transactions where the real estate resale dealer, or any person that comprises the real estate resale dealer, holds a majority of the beneficial interest in another real estate resale dealer.

22

Thank you. You just proved my point. "(b) This Article shall not apply to the following:
(1) Any real estate resale transaction exempted from the preemption provisions of the due on sale clause prohibitions pursuant to 12 U.S.C. § 1701j 3(d). (Garn-St. Germain).

This bill will outlaw “subject to” transactions in North Carolina unless you are a realtor, or you use a land trust, which is exempted by both Federal law, and NC Senate Bill 679, which was signed into law in July, 2005 by the governor.

Nice try.

Case closed.

Da Wiz

23

I realize it was tough to CONTINUE reading another inch or so, because it nullifies what you just said so I’ll cut and paste it for you:

(3) Any real estate resale transaction where the real estate resale dealer has engaged in no more than one real estate resale transaction in the previous 12 months, including such transactions where the real estate resale dealer, or any person that comprises the real estate resale dealer, holds a majority of the beneficial interest in another real estate resale dealer.

24

You just gave another situation where the law DOES NOT apply and it has nothing to do with what I just said. I’ll repost for you, McFly:

(b) This Article SHALL NOT APPLY to the following:
(1) Any real estate resale transaction exempted from the preemption provisions of the due on sale clause prohibitions pursuant to 12 U.S.C. § 1701j 3(d).
(2) Any real estate resale transaction where the real estate resale dealer is at the time of the real estate resale transaction licensed by the North Carolina Real Estate Commission pursuant to Article 1 of Chapter 93A of the General Statutes.
(3) Any real estate resale transaction where the real estate resale dealer has engaged in no more than one real estate resale transaction in the previous 12 months, including such transactions where the real estate resale dealer, or any person that comprises the real estate resale dealer, holds a majority of the beneficial interest in another real estate resale dealer.

What part of “shall not apply” don’t you understand? Geeeezzzzzz!

This bill will outlaw “subject to” transactions in North Carolina unless you are a realtor, or YOU USE A LAND TRUST, which is exempted by both Federal law, and NC Senate Bill 679, which was signed into law in July, 2005 by the governor. Land trusts are legal and exempt in NC.

We all know you are a shill who has never posted any useful information and 100% of your posts are attacking land trusts – and not very intelligently. You made lots of mistakes but then again, your name is BooBoo.

Da Wiz

25

There we go back to name calling again when things don’t go your way.

Please reread this again:

(3) Any real estate resale transaction where the real estate resale dealer has engaged in no more than one real estate resale transaction in the previous 12 months, including such transactions where the real estate resale dealer, or any person that comprises the real estate resale dealer, holds a majority of the beneficial interest in another real estate resale dealer.

…YOU HAVE A DOUBLE NEGATIVE meaning that you can do NO MORE than ONE transaction per year unless you are a RE agent or follow the new rules as a dealer even if the deal is within a trust.

26

Now that is funny!

27

BooBoo, it’s best to let it go. The Gatten Landtrust groupies NEVER accept anybody’s negative comments about their system and more importantly their promotion and structure of that system because that would mean that they’d have to face reality and admit to what they are really doing.

The only reason that I’m bothering to post here again is because of the shill comment directed at you. I’d expect that from Ali and some of the other lesser GLT followers, but from a supposed educated man, Doc, that’s pretty low.

Let’s see, out of 600 plus posts, the majority have been thread busting posts something to the effect of , “The NARS landtrust is better than anything. If you use it, you’ll be safe lawsuits, insects, and flying mammals and make a million dollars without risk!” So what exactly would that make you? How much actual useful info have you posted? And by the way, you call yourself “Da Wiz” and you’re making fun of BooBoo? Geesh!

Just for fun and giggles, let’s pull some samples from your own website, okay?

A (title-holding) land trust is created in the name of the current owner (the settlor) who holds a 100% beneficiary interest. No one else is involved, only the owner and his/her trustee. We always use a non-profit corporation with many years experience as Trustee.

No one else is involved? How did you get involved? Did the seller magically learn that they had to put their property into a landtrust before you, the investor, would “take control” of it? Oh yeah, the sellers’ hold 100% of the interest. How exactly do you, the investor, come into play here, then?

Escrow is opened to facilitate the assignment, in the existing land trust, of beneficiary interest to co-Beneficiary.
Oh, okay, there you go. THAT’s where you come in! Well, there goes that 100% of the seller’s ownership rights.

A Possession and Occupancy Agreement (triple net lease) is executed between the trust and the 2nd co-beneficiary (responsibility for collections and disbursement are then assigned to PAC Management).
Oops, not allowed under the laws that YOU mentioned. I bet this is one of those “legally unrecorded documents” right?

Transfer full ownership, including tax benefits…without title transfer to the buyer

But didn’t you say that you DON’T transfer ownership? Isn’t a transfer of ownership illegal under the laws that YOU mentioned?

Acquire (or sell) property of all types safely without cash or credit qualifying…or title transfer

But there is NO SALE of property, correct?

Transfer real estate with one brief document, without escrow, title or lender involvement

There’s that transferring ownership rights again!

Put sellers at ease who would never trust creative financing or investors otherwise

How, by confusing them to the point that they don’t know what they’re signing? Sorry, bad form on my part. Just couldn’t resist. Your method is the farthest away from the KISS principle as I’ve ever seen.

Acquire foreclosed-upon properties with simplicity, without bank involvement

My guess would be that the REO department would be involved!

Make BIG money fast and safely with tenant/buyers who may have minimal cash and poor credit

So, you ARE involved?

Hold ownership in, and live in, your home for years and still qualify for 1st-time homebuyer loan

I’d bet that the lenders would consider that loan fraud. A lie is still a lie whether it’s held in a landtrust or not.

And that’s about all I cared to peruse through.

I’m gone

Raj

28

That’s it guys, if you have no legal leg to stand on and are intellectually challenged as you have clearly demonstrated, just distort, distort, distort and cheer each other up.

:smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley:
You said, “Escrow is opened to facilitate the assignment, in the existing land trust, of beneficiary interest to co-Beneficiary. Oh, okay, there you go. THAT’s where you come in! Well, there goes that 100% of the seller’s ownership rights.” WRONG. SELLER RETAINS OWNERSHIP THROUGHOUT AND IS 100% PROTECTED.

“A Possession and Occupancy Agreement (triple net lease) is executed between the trust and the 2nd co-beneficiary. Oops, not allowed under the laws that YOU mentioned. I bet this is one of those “legally unrecorded documents” right?” WRONG. LEASING THE PROPERTY TO A CO-BENEFICIARY OF THE TRUST IS NOT A COMPROMISE OF THE DOSC under the US Code §1701-j-3 (see Garn-St. Germain/ FDIRA 1982).

“Transfer full ownership, including tax benefits…without title transfer to the buyer But didn’t you say that you DON’T transfer ownership?” YES, GENIUS – WE TRANSFER OWNERSHIP BENEFITS, NOT TITLE. Deep concepts.

Da Wiz

29

It’s too bad you guys got off the subject of him admitting that what he does is immoral. He argues the legality of what he does, but i haven’t noticed him try to defend morality. (cue the sellers enter at their own risk speech)

30

REOman, that never seems to matter to the Gatten groupies.

As you can see, part of the Gatten education is to dazzle you with tons and tons of legal codes and laws. In fact, every one of them posts those exact lists any time someone questions them (along with the twelve year old’s tactics of name calling and verbal abuse).

I’m curious if the Doc actually knows what those laws that he sites actually say? Why do CA court case prove that their method of using land trusts is legal and valid in all states? Why do they still site these codes/laws that were from the 50s and 60s when newer court cases are available?

Let’s review some legal terms: One from the Garn St. Germain Act

a transfer into an inter-vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property

Now, when the Doc coaches the sellers (and that’s what people are called that are trying to sell their homes, Doc) to put their properties into land trusts, the sellers are initially listed as 100% beneficiary, and so, the Doc argues that he broke no law. However, immediately upon execution of that land trust, the Doc, and at some point, a tenant-buyer (or whatever you wish to call them) has the original seller’s transfer 90% of the interest over to them and also has a “unrecorded legal document” laying out the transfer of occupany rights with the end tenant.

So, doesn’t that look like a violation of the act?

Legal review, #2: part of 18 USC § 1001 Section of the US Code that was mentioned in the initial post

(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;

Now, coaching a seller on how to put their property into a landtrust for “asset protection” when in reality it is so that the investor can assume control of the property and make money by putting people in the house (can’t use the term sell, the Doc gets angry), seems to me to violate all of the above, which would constitute federal fraud.
How? 1. The land trust is a device that is put in place specifically to cover up the transfer of ownership rights (and thus ownership. A sell to some) from the lender. Now, the Doc says that he informs the lender every time that he does a landtrust. I wonder, is that before or after he assumes a beneficial interest and is that before or after he has the “unrecorded legal document?” Do you also show them this document?
2. Can any one say “asset protection?” From one of Doc’s on posts, “asset protection is as good a reason as any.” Yes, it is. But a lie is still a lie, regardless of what you call it.
3. Unrecorded legal document.

Good night, good luck, God bless.

Rail away to your heart’s content Doc. I’m done here.

Raj

31

Nice try – land trusts have been legal for 117 years. Eat your heart out.

Da Wiz

32

Doc,

As I’ve said many times before. It’s not the land trust that I have a problem with. The problem stems from the way that YOU use your version of the land trust and your methods of advertising your system to sale to others.

For instance, one of the Gatten groupie’s sales techniques is to get on forums like these and promote talk about this particular method, good or bad, as either gets it attention. Now, how’s that for knowledge?

Raj

33

Just one problem, old Rajah. I don’t sell land trusts – I use them. Your problem is that land trusts are legal – period.

Da Wiz

34

Thank you Raj,

You said a lot more eloquently what I have been trying to say in my previous threads. Putting the property INTO a trust is fine…it is the transfer/assignment you do with it after that is the problem.

After this post I’ll heed your advice, and let Gary rant somewhere else.

Gary,

You yourself may not sell land trusts but the boss you are shilling for does.

How much do you make for the sales you are trying to drum up here? How much commission per new “Ground Partner” you find?

You might not be collecting the $$$ directly from the sale, but I’m sure you can’t be THIS dedicated for free.

35

BooBoo,

You said: “How much do you make for the sales you are trying to drum up here? How much commission per new “Ground Partner” you find? You might not be collecting the $$$ directly from the sale, but I’m sure you can’t be THIS dedicated for free.”

I have never taken a cent and I am not here to drum up sales. You may be sure but you’re also wrong. I just like to educate people that land trusts are safe and legal, unlike Lease Options as a seller or "subject to’, both of which are always DOSC violations. I think it’s reckless for so-called gurus to tell their students to just ignore the DOSC and I want to show them they have options.

As far as the transfer/assignment, it is protected by Garn-St. Germain and legal. Don’t blame me – I didn’t pass the law. Blame the banks who created this exemption for their wealthy depositors. I just like to use the law to my benefit.

Tell me. How else could I make thousands of dollars per transaction and never be on title or on any loan with no responsibility for anything and at the same time, help the seller get his full price and enable someone to experience all the benefits of home ownership? If you can show me another way how to do it, I’ll consider your method. If not, I’ll continue to be smart and utilize the land trust to its full advantage. After all, it was perfected by Chicago Title Company.

Da Wiz

36

How exactly do you make thousands of dollars per transaction without changing the occupancy rights which IS a violation of the Garn-St. Germain (See above if curious)?

Again, no problem with land trusts, just your implementation of them.

Do you know that major drug cartels use the same line about using the law to their own benefit? Do you agree with them when they do it?

Legal? Borderline at best. At the start, you’re violating set law. You HAVE to tell the seller how and what to do to setup a landtrust. You coach them to say it’s for “asset protection,” when, in fact, it’s because you told them they had to setup the trust for you to “take control” (since you get so upset with the term sell) of the property. If your system was so legal, upfront, ethical and honest, why would you have to do this? Why do you have to hide the fact that you are intending to gain some benefit?

The reason the trust is setup in the first place is to make a “change of control” (again, no term of sell) Forget about the rights of occupancy (which you hide), lying about the real reason for the trust is enough to land you in a federal jail for 5 years.

If you really want to give people options, don’t you think that it’s important for them to know the consequences of those options? I mean, you sure do make it a point to tel them the bad side of sub2 and lease/options.

If you aren’t selling the NARS Pactrust system and it’s so legal, moral and ethical, then why can’t you answer the simplest of questions about it without resorting to name-calling and bad mouthing and still not answer the question? (Q #1: what is the REAL purpose of the setup of the land trust?)

Raj

37

The real purpose of the land trust is to make the seller’s real estate perform to its maximum efficiency. It’s an asset and to convert it to personal property provides the most flexibility, increased income potential, and protection against liens, encumbrances, etc. It also guarantees him he will receive his full equity and his mortgage will be paid off BEFORE he ever relinquishes title to the property.

Da Wiz

38

I don’t know if you guys like messing with the Wiz, or if you really think the NARS trust is unethical or illegal. It’s funny watching you guys go at it. Here is my take on the beneficial interest thing.

A transfer of beneficial interest does not transfer occupancy rights. If I want I can place my home in a land trust and transfer whatever pecentange of beneficial interest I want to whomever I want and I can still live in the property.

The “unrecorded legal document laying out occupancy rights” is called a lease. Occupancy rights are only transferred with a lease, which is perfectly legal. If it wasn’t there would be no rental properties because everyone would be violating the DOS clause if they did. The transfer of beneficial interest has nothing to do with the transfer of occupancy. Who records leases?

Every business has loopholes. It is not wrong for us to take advantage of them. We pay accountants to find loopholes for us to save on our taxes. Do you guys remember when the rich were getting huge tax breaks by taking losses against real estate until they changed the tax code. I don’t recall anyone getting into legal trouble even though they were buying with no intention on making a profit, only to take a loss. Is that considered fraud? Attorneys do the same thing. They find loopholes in the legal system to help out their clients. Some people may find certain things immoral by their standards, which is fine. But calling things illegal is another story.

Beggar

39

A transfer of beneficial interest does not transfer occupancy rights. If I want I can place my home in a land trust and transfer whatever pecentange of beneficial interest I want to whomever I want and I can still live in the property.

That is true. As an individual, you can place your property into a trust, and still live in the property. As per the law, that is perfectly legal and protected. However, using the Doc’s system, the homeowner does NOT choose to place their property into a land trust of their own accord.

First, it is not just a homeowner, but a seller. Second, the investor coaches the seller to setup the trust BECAUSE that is the only way that the investor will deal with the seller’s problem (getting rid of the house). So again, what was the purpose of the trust? Answer: to sell/get rid of the property. It was not for asset protection. It was not to “make the seller’s real estate to perform to its maximum efficiency” (well, okay. Maybe it was, but it wasn’t for the benefit of the seller or the seller’s idea to do so). The trust was established for the sole purpose of transferring rights (selling, conveying, giving, whatever term fits you here) to the investor so that the investor can take control of the property. To most common sense people, that would be considered a sale. In fact, setting up land trusts in this way is what prompted the initial phase of NC housebill 725. The NC AG considers land trusts setup in this fashion FRAUD, and it is.

The unrecorded legal document may indeed be the lease, beggar. However, the lease DOES transfer occupancy rights, which is a violation of the Garn St. Germain Act concerning properties held in a land trust. Thus, it DOES violate the DOSC, which the Doc always says that it doesn’t.

And yes, beggar, criminals (and their attorneys) use the legal system against itself all the time. Does that make their criminal activities lawful? Moral? Ethical?

Doc (or Da Wiz if you want) wants everyone to believe that his system is so much better than anything else and that it is so righteous that nothing else compares. Yet, it does have flaws, just like any “creative” investment strategy.

Raj

40

Yeah Mr. Roger you have a point. The Wiz loves the NARS system and he stands behind it just like others stand behind their systems.

I won’t go into the NC thing too much because we all have our opinions. I tend to agree with the Wiz on the exemptions in NC. But if I ever were to do a subject to deal in NC, I would just get assumed required real estate license first and then use the NARS system. Then I can “coach” the seller to use the landtrust and be in compliance with NC. In that case it is better safe than sorry. I don’t have the financial backing to fight that one out it court.

Why do you think the only reason the trust is used is to benefit the investor? Everyone benefits. If the person putting the property in the trust has any amount of equity, their “asset” is protected. Thus a benefit.

Are you saying the only way you can lease a property without violating the DOS is if the property is not in a trust? There are 9 different exempions in the Garn-st germain act. Using them alone or in combination seems like a good strategy to avoid any violations. In The NARS system, the trust documents don’t relate to any transfer of occupancy. Only the lease does. So the NARS system is using two of the exemptions.

You can also take the side as the courts do as seeing a lease and a separate option to buy as executory, I hope I spelled that right. Then you may see that placing the property in a trust and then leasing it out is a violation. It’s all about what you believe and stand behind until proven wrong. I can’t wait until the day it pans out or doesn’t pan out in court. Then we can find something else to write about.

Beggar Sue