All Forum Posts by: Account Closed

I just responded to a "Subto student from the "community"  with this

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His comments; Pace teaches several strategies with due on sale.

My Response:

@Luis Ramos: First, I want to thank you for taking the time to engage the post here.

Now referring to Your Comment:

"then deed back the property to seller and using a title company perform an executory contract. Secondly, if this fails, he offers insurance through Equity Assurance that basically pay offs the underlying note through refinance. If this fails, then perform a land trust strategy"

Please don’t take this as disputing your sincerity. I do believe you are sincere. This is simply addressing common misconceptions Mr. Morby either knows aren’t true and has an agenda to make people think they are true, or he is terribly misinformed. I’m not sure of which.

I know this is a very looonnng post, but it is packed with what anyone in Mr. Morby’s “community” or anyone considering Mr. Morby’s “community” needs to be advised of and consider. This is not an exhaustive list. Just addressing the comments made previously.

The Subto “community” is 4 blind men describing an elephant (look it up) and perpetuating wrong information.

Yes, Subject To is legal when you do it legally and safely.

However, Here Is Reality:

1. When you deed the property back to the seller, you create all sorts of problems.
2. But, Take hope, there are solutions. However, Mr. Morby is not presenting those solutions, whatever his motive may be. But, let’s see, he claims 4,000 students at the previous $8,800 fee, so about $35,200,000 he has made on this. That doesn’t go unnoticed by regulators. I think he has since bumped up his fee.

So, here we go:

1. Deeding back Does Not Stop the Due on Sale. You have already violated the DOS and the bank can choose to foreclose regardless of any further actions you take.
2. You can not "un-ring the bell". Once the DOS has been violated, it has been violated.
3. Yes, banks are enforcing the DOS.
4. It actually “red flags” the account at the bank for further review.
5. As the bank looks, then sees Two deed transfers in such a short time on one property, then another transfer to a Land Trust and the loan isn’t being paid off, hmm, they say, “something fishy is going on here and it may be illegal”.
6. Contrary to popular belief, banks aren’t stupid.
7. No bank is going to risk liability to protect you and ignore that you violated the DOS. That's crazy talk.
8. You have messed up the bank’s underwriting risk liability on that account. That is not a small thing.
9. Banks are audited for “suspicious account activities” and a notice gets sent to the FBI. Part of the “Homeland Security thing” You know, drugs, terrorism, etc
10. You can be sued and criminally charged for up to 7 years after the transaction. How lucky do you feel?
11. Banks will probably increase their enforcement because Mr. Morby has made it a mockery by saying things like “banks don’t care” , “people who have No Money can buy using Subject To’, “he can buy overleveraged properties”, “he can use gator lenders” for closing and carrying costs”, and he can change the status of the title if he gets caught. That is all sufficient to establish a fact pattern of actions that will have serious consequence for him.
12. If I was the FBI, I assure you I am not, I would join the Subto “community” and start gathering what I need in order to bring charges and win my case.
13. Hmmm, I wonder if it would fall under the RICO statutes. Just kidding (sort of).
14. A lawsuit will cost you $25,000 to $125,000 and a year and a half of your life. With no guarantee of winning. Yes, the seller can sue you. The state can sue you. The Federal govt can sue you. Over what you say? "I haven't done anything wrong". Then why did the DOS get called? Why did you violate those state laws you aren’t even aware of?
15. Subject To is legal, when done legally. But what I never see addressed are the secondary violations that uneducated Subject To investors inevitably commit. That takes experience to know about. From what I’ve seen, that maturity and experience is sadly lacking in the “community”. Or, do you think regulators are as dumb as a brick?
16. I go on, The seller has no obligation to take it back
17. If the seller takes it back, they have no obligation to resell to you, and they might not and there is nothing you can do about it.
18. The seller likely won’t play that game, they will lose trust in your ability to do Subject To legally and safely and refuse to transfer back.
19. You may not be able to even find the seller to try to transfer back.
20. If you do Subject To incorrectly and the DOS gets called, you may not even learn about it until it's too late. Too bad, so sad.
21. There are additional closing costs that have to be paid
22. You may trigger an investigation by regulators
23. Each time you change title it’s likely that taxes are due – explain that to the IRS
24. You’ve messed up title insurance big time
25. You have probably invalidated the homeowner’s/landlord insurance.
26. If any of this confuses you, DO NOT DO SUBJECT TO until you are taught properly

That’s what comes immediately to mind from my 30 years of doing & teaching Subject To

1. Executory Contracts by definition violate the same Due on Sale that just got called
   1. Here is the actual wording of the Due on sale clause

18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to purchaser.

1. In a recent video he said he has discontinued “Equity Assurance”
   1. Has he restarted it?
   2. I believe he has totally walked away from any kind of “Assurance” program. Assurance is NOT Insurance.

1. Land Trust – he says in his recent video on Due on Sale that he has had 10 Due on sales called recently and his students have had a couple of dozen called, that they had put into Land Trusts
   1. Facts are stubborn things. Land Trusts don’t work.

Any reference to Mr. Morby comes from videos he has recently released on youtube and is publicly available.

I would be curious though, to see if Mr. Morby says something in his groups that isn’t covered here. Can you check with the folks at Discord and get updated information?

Click to enlarge

Very short answer is yes I've had the due on sale clause called on me 10 times

real estate the bank doesn't care if you buy the house subject to

executory contract becasue it gets rid of the due on sale clause altogether

20,000 of those members are actual trained students of mine