Training: Webinars & Teleseminars

Locating Assets – Judgment Recovery

Without question, the biggest obstacle for most civil judgment holders will be their inability to locate the assets of the judgment debtor (the judgment debtor owes the money). It goes without saying: if you can’t find it, you can’t seize it!

I can imagine you’re thinking… “But what’s an asset?”

An ‘asset‘ is an item of value owned by an individual or business.

Assets that can be quickly converted into cash are considered ‘liquid assets.’ Other assets include real estate, personal property, and other items that can be sold. Before proceeding with the ‘where,’ we should probably cover the ‘what.’ That is, what assets can you seize? Don’t be afraid to get very creative when it comes to the ‘what.’

Here is a list of some of the assets that are usually not exempt; which means you can seize them through the court to satisfy a judgment:

• House/real estate, cash,
• rental income,
• business income/equipment/inventory,
• vehicles (cars, trucks, RVs, boats, snowmobiles, motorcycles, etc),
• money deposited into checking or savings accounts, wages (25% in most states),
• stocks/bonds/mutual funds, annuities/lottery payments,
• royalties, inheritances, personal property (jewelry, heirlooms, furniture, collections, firearms, etc),
• business accounts receivable,
• livestock,
• crops,
• security deposits,
• property belonging to the debtor held by someone else,
• judgments or other debts owed to your debtor,
• and – all of the above belonging to the debtor’s SPOUSE (in community property states).

Basically, if it’s not exempt – it’s fair game!

There are some assets that will be considered exempt, or at least a portion of those assets will be exempt from the enforcement of a civil judgment. Exemptions for certain types of assets are provided under state and federal law. These exemptions were created to protect debtors from losing so much that he or she can’t start over, or live with basic necessities. Each state’s civil code will specifically outline what is considered exempt from enforcement.

Typically, common exemptions include:

• Life insurance,
• health and disability income,
• welfare,
• social security income,
• 401(k) benefits,
• insurance benefits,
• unemployment insurance,
• workman’s compensation,
• retirement benefits,
• and child/spousal support.

Some assets, like an automobile or a house provide for a certain amount of the equity in that asset as exempt.

There are many ways to locate the judgment debtor and his/her assets. In judgment recovery circles this is called ‘skiptracing.’

Obviously, since this is just a newsletter article, I don’t have nearly enough room to elaborate on all the myriad sources of information at your disposal – particularly when it comes to public records. Suffice it to say that these days, most skiptracing can be conducted online using the information available in public records and online databases, but your most valuable asset location tools will be private consumer records.

Private consumer information would include full consumer credit reports, banking detail reports and other data that is not readily available to the general public. You’ll have access to private consumer information once you’ve obtained an assignment of judgment. Once the judgment is assigned, you will then legally become the judgment creditor and the owner of the judgment. You will have every right to obtain consumer credit history and other critical financial information about your judgment debtor.

Anyone who has ever applied for financing, opened an account for utilities, has a credit card, applied for or opened a checking or savings account, or has accumulated bad debt – essentially everyone – will leave a paper trail. These reports will reveal much about your debtor including current and former employers, bank accounts (sometimes even including check orders), driver’s license numbers, telephone numbers, current and former addresses, aliases, social security number, date of birth, bankruptcies, collection efforts, other creditors, as well as a list of anyone who’s inquired into the subject’s credit history.

Think about the last time you applied for credit. Did you notice the tiny disclaimer at the bottom of the application, the one just under your signature? When signing this application, you gave permission to your creditor to share information about you with other creditors. As a judgment creditor, you have a legal right to discuss your debtor with these other creditors.

Which brings me to the incredible power of court ordered subpoenas.

A subpoena can be issued from the court to legally compel judgment debtors – as well as other creditors listed on a credit report – to provide you with information and specific documents relevant to the disclosure of the debtor’s assets. Think: paycheck stubs, bank account statements – or coming from the other direction credit applications. You get the idea.

Aside from the obvious benefit of several free and fee-based databases that are available on the Internet, don’t discount the amount of information you may be able to obtain about your subject by using a search engine (like Google). Did your subject make the local news in the hometown paper lately? Maybe the new company they’re working for posted a press release about the new hire.

Perhaps they have a website for business or general family purposes. They may even be listed on the minutes of the local PTA meeting. Do they have a MySpace or Face Book page? It seems like everyone does these days, and it’s amazing how much personal information people share on those sites! Much of this information can be found on the Internet and sometimes it will help you locate a subject when nothing else works.

If you don’t have time to do your own asset location there are several companies that you can outsource the work to for a fee.

These fees will be reimbursable to you off the top of what you are able to collect. Outsourced searches for banking information and/or employment information are almost always provided on either a ‘no hit – no fee’ basis, meaning that if no information is found then there is no cost to you. A few of these companies will charge a nominal ‘no-hit’ fee if they’re unable to locate any information about your subject.

I have provided information about several of these companies and resources in my home study training and my quick start courses. You can check out the quick start guide by going here: htpp://misunviersity.com/newbooks

I hope that this has helped to paint a bigger picture into the scope and range of information at the disposal of a judgment recovery professional. As always, I welcome your questions.

Tags: collect judgments, judgment, locating assets, mike warren judgment recovery
Posted in Judgement Liens, Training: Webinars & Teleseminars | 2 Comments »

Freddie and Fannie won’t pay down your mortgage

The two largest owners of mortgages will not lower the principal on the loans they back thats a clear message for all those troubled homeowners. Fannie Mae and Freddie Mac, which are controlled by the federal government, will not lower the principal on the loans they back, instead opting for interest rate reductions and term extensions when modifying loans. But their stance is out of synch with the Obama administration, which is seeking to expand the use of principal writedowns. In late March, it announced servicers will be required to consider lowering balances in loan modifications. Asked whether they will implement balance reductions, the companies and their regulator declined to comment.

The Treasury Department also declined to comment. What’s holding them back is the companies’ mandate to conserve their assets and limit their need for taxpayer-funded cash infusions, experts said. If Fannie and Freddie lower homeowners’ loan balances, they are locking in losses because they have to write down the value of those mortgages. Essentially, that means using tax dollars to pay people’s mortgages. Between them, they have received $127 billion — and recently requested another $19 billion — from the Treasury Department since they were placed into conservatorship in September 2008, at the height of the financial crisis. Treasury and the companies have already set aside $75 billion for foreclosure prevention, which can be spent on interest-rate reductions or principal write downs. Meanwhile, a growing number of loans backed by Fannie and Freddie are falling into default.

PLUS: Look what Diana Olick said:

Diana Olick Banks Ignore Delinquent Borrowers

Some encouraging signs on the foreclosure front may not be as rosy as some are reporting. RealtyTrac, the online foreclosure sale site, shows a 9 percent dip in the number of properties with foreclosure filings in April, month-to-month. The driver of that dip is a big drop in new notices of default. The final stage of foreclosure is bank repossessions (REO) shot up to a new record high, up 45 percent from a year ago. When I first read the report I thought, okay, we knew there was a big pipeline of loans that would not get modified and would have to come out the end at some point; now is that point. The fact that fewer loans are going into the pipeline should be our focus, and that’s a positive. That’s what I thought until I interviewed RealtyTrac’s Rick Sharga. “People are sitting in their houses not paying their mortgages, and the banks are letting those delinquencies extend longer and longer periods of time before they put them in foreclosure,” Sharga told me. That, he adds, is the main reason we’re seeing lower numbers of new defaults. The borrowers are in default, but the banks aren’t paying attention, so they don’t show up in the numbers.

“The fact that we have six to six and a half million loans that are either seriously delinquent or in foreclosure also suggests we are not nearly out of the woods. If we just started to absorb that inventory at the pace we’re currently seeing new foreclosure proceedings we have about a 50 to 55 month supply of loans that yet have yet to be processed, so we have a way to go before we are out of the mess,” he added. Sharga makes a compelling point. A lot of folks are either falling out of the trial modification period or not qualifying in the first place, and those loans are moving quickly to bank repossession. California-based mortgage analyst Mark Hanson adds perspective with a look at “cancelled foreclosures.” These are not tracked by RealtyTrac, but they “bite right out of Notices of Default and foreclosures, so to get a real idea of how ‘credit’ is doing, you have to add a certain percentage back.” That’s because Hanson believes the redefault rate on these modifications will be at the very least 50 percent 6-19 months out.

What are your thoughts about this?

Tags: collect judgments, judgment, locating assets, mike warren judgment recovery
Posted in Judgement Liens, Training: Webinars & Teleseminars | No Comments »

Short Sales Are Illegal !?!

Freddie Mac says short sales are now illegal.

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VIDEO #1

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Short Sale Investing 2.0 – The Secret “P-J-L” Strategy

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Tags: collect judgments, judgment, locating assets, mike warren judgment recovery
Posted in Judgement Liens, Training: Webinars & Teleseminars | 1 Comment »

Fractionalizing a Foreclosure – Part 1 of 2

Tags: collect judgments, judgment, locating assets, mike warren judgment recovery
Posted in Judgement Liens, Training: Webinars & Teleseminars | 9 Comments »

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