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By David Soble 05 Nov, 2017

I recently had a client who came to me complaining about an investment home that their 74 year old father had owned. He had sold the property to a real estate agent’s son for substantially below market value. Considering the neighborhood, the overall condition of the home and the current and active market conditions, the low sales price was concerning. When I called the agent to inquire further, she said that they had negotiated a fair price and that my client’s father “knew what he was doing.”

Upon further investigation, I learned that my client’s dad had a serious back injury just months before the transaction closed and was pretty much ‘homebound,” recuperating. He did not have a care giver and had no family members living nearby. He also relied on the monthly rental income of the home in question. Finally, I learned that the buyer, besides being the real estate agent’s son, was a landscape contractor for the rental property. Soon after the dad’s surgery, the buyer had become a frequent visitor to the father’s residence.  Because of the circumstances surrounding the real estate transaction, I began to suspect that my client’s father was a victim of undue influence or financial fraud.

 According to a recent survey conducted by the American Banker’s Association Foundation, Americans over the age of 50 account for 70 percent of all bank deposits, and 20% are estimated to be targeted by financial fraudsters. (ABA Banking Journal, November 1, 2017). Both the AARP and the Better Business Bureau say that seniors are more vulnerable to financial scams because of their physical frailty, isolation, or poor mental recall. In incidents where real estate is involved (often the most valuable asset that seniors own) the results are most costly and disastrous.

Here are 5 things that seniors and their family can do to protect their real estate and property interests from financial fraudsters:

 1. Tax Statements and other bills. Regularly review all of your real estate tax statements and other documents. While a tax statement does not definitively document property ownership, it will usually name the "owner? of record. So twice a year, when the tax statements issue, verify the name of who is listed as owner. Other items to monitor in the mail: bank statements, unpaid bills, utility shut off notices or worse, eviction notices.

2. Create a trust. Put the real estate in a trust on a senior’s behalf. Unscrupulous. high pressure real estate sales agents or investors often try to weasel a power of attorney, will, other legal document from unsuspecting seniors. These documents give them access to a senior's property. They get seniors to sign these documents through deception, and intimidation. But when a property is placed in a trust on behalf of a senior, it is the trustee who must endorse the sales or other legal documents for a real estate transaction to be legally binding. This arrangement would have served my client’s father well had he had a trust and at the very least, slowed down the transaction.

 3. Open and review the mail. Fraudsters can tap into equity lines long thought to be dormant by a senior home owner. Caregivers or family members should monitor checking accounts and be alert to large deposits and withdrawals in a senior’s bank account. Always encourage the use of checks or credit cards instead of cash. This leaves a paper trail. Most importantly, verify signatures on checks or other documents and report any unauthorized or suspicious signatures.

 4. Use monitoring services. Consider using real estate monitoring and credit monitoring services. There are services that monitor property transfers and track unauthorized liens in the county public records. Credit monitoring services, such a Lifelock, are also effective to protect against credit card forgeries or other accounts opened fraudulently. With the recent Equifax hacking, it is a good time to pull your senior's credit report to ensure they are not victims of identity fraud.  

 5. Strength in numbers. Collaborate with a senior's caregiver, family members and financial and legal advisors.  Fraudsters take advantage of isolated seniors who may not have a caregiver or family member living nearby. Encouraging good communication amongst a senior’s family members and / or advisors fosters a layer of protection against fraudsters. The more professionals who work on behalf of a senior, the better.

For more information on this topic, see the Better Business Bureau, or the Federal Bureau of Investigation: See Elder Financial Fraud

 About David Soble:  Since 1990, David Soble   has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has over 27 years of real estate and loan law experience to support his good-tempered cynicism.


By David Soble 29 Oct, 2017

 September 29, 2017  

CLEVELAND, Ohio -- In the week since Equifax disclosed its horrific data breach, much has been written about what to do. Now, it's time to talk a bit about what NOT to do:

Don't think that because you've never heard of Equifax before, or never agreed to give them your information, that Equifax doesn't have it. They don't need your permission to compile your information. Banks and other creditors furnish all of your info to the credit bureaus. What the banks don't have is obtained by the bureaus from court records and other public records.

Don't click on links you get by email or from your friends that say it's a link to help you figure out whether your SSN was compromised. There are links being circulated by data theft rings or by people who just want to cause mischief. Don't click on links from sources you don't trust. The official link being provided by Equifax is www.equifaxsecurity2017.com  Your best bet: Type this address in your browser yourself, rather than clicking on any link, including mine.

Don't feel safe if Equifax says your personal data wasn't compromised. Some people type their information into Equifax's online tool and are told their information wasn't stolen. Then they try again the next day and are told their information was indeed stolen. Just assume your information has been compromised and take steps to protect yourself.

Don't believe that a credit freeze, credit monitoring and a fraud alert all accomplish the same thing:

  • A credit freeze locks your credit file to creditors and should keep bad guys from taking out new loans or opening credit cards or buying cellphones in your name.
  • Credit monitoring doesn't keep thieves from using your stolen information; it simply notifies you after  something bad has happened.
  • A fraud alert placed on a credit file cautions creditors that the person's information may have been stolen. But many creditors don't even check this; they're not required to. It's like pretty please.
Don't provide your credit card number to Equifax in connection with any of its services. The credit freezes are free through Equifax through Nov. 21. Its other protection services are free for a year. For now, you'll have to pay $5 in Ohio to freeze your credit files through TransUnion and Experian. The lesser-known fourth bureau, Innovis, doesn't charge a fee. There's regulatory pressure on Equifax to cover everything or reimburse people.


Don't think if you freeze your credit file that it also covers your spouse or kids. Couples have different Social Security numbers, so do each of the kids in a family. A freeze affects only one SSN, not an entire household.

Don't click on ads you see online or links you see in news stories or anything like this, not even my links! Re-type the addresses in your browser. Only click on links when going directly to sites like Equifax, TransUnion, Experian or Innovis.


Don't provide information to entities that send you emails or text messages or letters, or call you on the phone. They're most likely imposters. Fraudsters connected with this breach may try to lull you in because they'll already know your SSN, your date of birth, your home address and a whole bunch more. Reputable companies don't contact you out of sky blue and ask for personal information. Call companies using on a number your find independently (back of credit or debit card, bank statement, company website, etc.)

Don't worry about changing the numbers on your deposit accounts, like checking and savings. These numbers are not in your credit files. But you still need to monitor deposit and investment accounts more closely in case thieves use your stolen information to impersonate you and steal your money.


Don't be scared into not  freezing your credit. For example, TransUnion is working hard to discourage credit freezes. If you contact them online or by phone, TransUnion will try to convince you to "lock" your credit instead of freezing it. They gush that it's free and easy, while cautioning that freezes can be a hassle and cost money.
I think all of the bureaus may start pushing some kind of "lock" instead of a freeze because freezes are regulated by law, locks aren't. Plus, if you're file is frozen, the bureaus may not be able to sell your information to creditors and other companies for those pre-screened credit offers and other marketing purposes.
If you want to freeze your credit, then do it. Don't be talked out it by a pushy credit bureau.

Don't believe that if you freeze your credit that you can just kick back and relax. About 88 percent of fraud involves existing accounts, not new ones. You still need to regularly monitor your credit card, debit card and bank accounts in case someone has your stolen information to gain access. Sign up through your bank and credit cards for email or text alerts so you're notified about activity. Also, monitor your accounts at least once a week online.


Don't use data that was in your credit files as part of any online user name or password, for your email, financial accounts, Facebook, etc. Not your date of birth, not a past phone number or street address, nothing.

Don't think that if you froze your credit files years ago that you're safe from this breach. The theft involved Equifax's internal files, not just the ones available to creditors. The information stolen could be used in all sorts of nefarious ways, including to answer security questions for bank, credit, insurance and investment accounts.

Don't give up. If you've tried to freeze your credit files and haven't been able to get through, wait a week or so. The bureaus have been inundated with volumes that their websites and customer service call centers were never designed to handle. Go on to other protection tactics like signing up for alerts through your bank and credit card, making sure your online passwords are secure, etc.

Don't go to any other source for a free copy of your credit report except www.annualcreditreport.com  or by calling 1-877-322-8228. You will NOT be asked for a credit card or debit card number. Or you can fill out a paper request and mail it certified to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281. Other web sites may say they're free, but there most likely is a free trial period before you have to pay for credit monitoring, or the site may just be a total scam.

Don't freeze only your Equifax credit file. Even though Equifax is the one that suffered the breach, the information stolen from Equifax could be used to open accounts with companies that only check your files through TransUnion or Experian. Truthfully, most creditors don't check all three of your files, unless you're getting a mortgage, because most of your information is the same on all of them.

FREEZING YOUR CREDIT FILES

Equifax by mail:
Write a short note that you're requesting a free credit freeze and include your name, address, Social Security number and date of birth. Mail your request through certified mail to Equifax Security Freeze, PO 105788, Atlanta, GA 30348.

Here are the phone numbers to call
Equifax 800-685-1111
TransUnion 888-909-8872
Experian 888-397-3742.
Innovis: 1-800-540-2505 (a lesser known bureau, used more for business accounts)

Or you can go online:
https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp
https://www.experian.com/freeze/center.html

By David Soble 15 Aug, 2017

The “ Great Recession ” in 2008 has had a lingering effect on how banks lend money to small business owners  and entrepreneurs.  Gone are the days when small businesses have  fast access to bank credit at competitive interest rates. Instead, alternative non-bank lenders, led by companies such as On Deck, Yellowstone, and Cash King, are filling the lending void, growing rapidly on the backs of unwary small business owners.

Here are 5 things small business owners should consider before taking out an “alternative” business loan:


1. Rates That Make Former Sub-Prime Mortgage  Lenders Blush.  High rate loans are the rule rather than the exception for alternative lending sources.  These lenders are not banks and therefore are not federally regulated, unlike companies that provide loans to consumers.   Instead these loans are often  funded by private investors selling credit at effective annual rates that commonly exceed 30%.

2.  Non -cancellable Daily ACH’s.  Since alternative business lenders don’t look at individual or business credit ratings, their risk of not getting paid back is high. They rely on a business’s cash flow only and expect to be paid daily rather than monthly, by using a non-cancellable automatic payment deduction (“ACH”) out of the borrower’s account. The lender can immediately call a loan in default should a business owner fail to replenish their designated account. This exposes the borrower to litigation and further expenses.  Borrowers should be confident that they can meet their daily, rather than monthly, obligations.

3. Arbitration.  Alternative loan contracts generally have expensive arbitration clauses where the debtor agrees to forgo the traditional legal process for a binding decision from designated arbitrators. Arbitration clauses are not favorable to borrowers. They often dictate where a legal case can be heard, usually in a creditor friendly state far removed from the borrower. This creates added expenses to a case even before it’s heard on the merits.   Arbitration decisions usually cannot be appealed (“ binding arbitration ”).  Finally, professional arbitrators have been criticized for having biases in favor of lenders since successful arbitrators make their living from work referred to them by the lending industry.

4. Consent Judgments.Many lenders have business borrowers essentially endorse a “consent judgment” before the the ink is even dry on the original lending agreement.  In a consent judgment, the borrower admits to a default and to the terms of a judgment against them, waiving any legal protections that they might otherwise have.    Lender’s will say that this instrument is harmless and only used in the event of an actual default.  It’s a disturbing trend because it sets the borrower up for failure and legally neutralizes them. (Imagine a hospital locating a corn beef stand next to the cardiac care unit or meeting a bank’s REO bank officer right after you close on the purchase of your home.)

5.  Personal Guarantees.While the business loan is given to the business in name, the small business owner often personally guarantees the payments in the event that their business fails. Personal  loan guarantees are an integral part of the lending agreement, so borrowers should think carefully before signing. Lenders will look to the former business owner to make payments long after a business closes it doors.

Alternative business loans appeal to business owners because the loan process is much  faster than traditional lending sources (some lenders say a loan approval can be given in less than 48 hours) and there are no personal credit requirements.  If you don’t need the money  “yesterday” (these type of lenders anticipate that you do) then one should seek assistance through a non-profit dedicated to helping business owners in all areas of business and finance, a SBA lender ( Small Business Administration ), or the assistance of a knowledgeable business attorney who can help you negotiate a far better loan agreement.

About the Author:  

 Since 1990, David Soble  has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and contract issues. He has been involved in thousands of real estate transactions and has been responsible for billions in real estate loan portfolios throughout his career. 

By David Soble 15 Aug, 2017

According to business periodicals such as  Entrepreneur Magazine , Inc. and  Forbes , with the beginning of each year comes an increase in new business start-ups.  Perhaps this is because people are seeking an increase or alternative means of income,  job independence, or a more rewarding career. Whatever the reason, since the  Great Recession  of 2008, new business filings trend upwards this time each year.  

Regardless of the time of year,  new business owners tend to overlook 3 important considerations that expose them to financial risk and legal liability.  They are:   

1. Meet  Filing  Requirements.  Corporate filing and licensing is a mundane but necessary task.  Without proper paperwork, a business may not have “standing” to bring a suit in court because they are not recognized as a legal entity authorized to perform business.  Seeking to collect past monies owed or to enforce a contract?  “ Lack of standing ” is a valid defense to a lawsuit  On another note,  if you intend to conduct business in another state, you must also meet that state’s corporate filing requirements as well.

2.Create A Meaningful Operating Agreement.   Creating a business entity without an operating agreement falls short of good business planning. Failing to detail your own operating agreement generally means that in the event of a dispute or corporate governance problem,  less favorable ‘boiler -plate” language from a legal form “factory” or state statutory language could be substituted and control how your business relationships operate -contrary to your initial intent. This is especially true where multiple owners are involved as disputes will  invariably arise.  

If a business relationship falls apart (The  Small Business Administration  statistics state that one-third (⅓) of all new businesses close in the first 5 years) it’s best that business owners have predetermined  termination terms in their operating agreement, as opposed to having terms imposed upon them by statute or third parties such as an arbitrator.

3. Read and Understand  Contract  Terms .  Conducting business on a handshake, however sincere, is a thing of the past and impractical in today’s fast -paced global economy.  Business owners encounter contracts in all forms: service agreements, leases, loan agreements, guarantys,  joint ventures, co-marketing, purchase agreements and client agreements are to name but a few. Reading through just one of these documents can be daunting and time consuming.  Most “boiler -plate” contracts are drafted by attorneys and have extensive and onerous “default” provisions.  Don’t “ sign on the bottom line” until you have read your contract for meaning.  If you don’t understand how a contract provision affects you and your legal rights, then by all means consult with your own attorney–not a real estate or leasing agent,  not your cousin in law school, and certainly not ‘their’ attorney.  Consult with your  O-W-N  attorney.  And do it before, not after, you sign a legally binding document.

Never is the old adage, “an ounce of prevention is worth a pound of cure” more appropriate than in today’s business climate.  Experienced business and real estate attorneys regularly address countless variables experienced by businesses just like yours.  Many attorneys will provide new entrepreneurs with a free initial consultation and it’s a solid business decision to take such a meeting.

About the Author:  Since 1990, attorney David Soble has been responsible for billion of dollars in real estate and finance matters representing the interests and legal needs of both small business owners and consumers alike. David can be reached at 888-789-1715.

Disclaimer: You should not rely or act upon the contents of this article without seeking independent legal advice from a qualified attorney.

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By David Soble 05 Nov, 2017

I recently had a client who came to me complaining about an investment home that their 74 year old father had owned. He had sold the property to a real estate agent’s son for substantially below market value. Considering the neighborhood, the overall condition of the home and the current and active market conditions, the low sales price was concerning. When I called the agent to inquire further, she said that they had negotiated a fair price and that my client’s father “knew what he was doing.”

Upon further investigation, I learned that my client’s dad had a serious back injury just months before the transaction closed and was pretty much ‘homebound,” recuperating. He did not have a care giver and had no family members living nearby. He also relied on the monthly rental income of the home in question. Finally, I learned that the buyer, besides being the real estate agent’s son, was a landscape contractor for the rental property. Soon after the dad’s surgery, the buyer had become a frequent visitor to the father’s residence.  Because of the circumstances surrounding the real estate transaction, I began to suspect that my client’s father was a victim of undue influence or financial fraud.

 According to a recent survey conducted by the American Banker’s Association Foundation, Americans over the age of 50 account for 70 percent of all bank deposits, and 20% are estimated to be targeted by financial fraudsters. (ABA Banking Journal, November 1, 2017). Both the AARP and the Better Business Bureau say that seniors are more vulnerable to financial scams because of their physical frailty, isolation, or poor mental recall. In incidents where real estate is involved (often the most valuable asset that seniors own) the results are most costly and disastrous.

Here are 5 things that seniors and their family can do to protect their real estate and property interests from financial fraudsters:

 1. Tax Statements and other bills. Regularly review all of your real estate tax statements and other documents. While a tax statement does not definitively document property ownership, it will usually name the "owner? of record. So twice a year, when the tax statements issue, verify the name of who is listed as owner. Other items to monitor in the mail: bank statements, unpaid bills, utility shut off notices or worse, eviction notices.

2. Create a trust. Put the real estate in a trust on a senior’s behalf. Unscrupulous. high pressure real estate sales agents or investors often try to weasel a power of attorney, will, other legal document from unsuspecting seniors. These documents give them access to a senior's property. They get seniors to sign these documents through deception, and intimidation. But when a property is placed in a trust on behalf of a senior, it is the trustee who must endorse the sales or other legal documents for a real estate transaction to be legally binding. This arrangement would have served my client’s father well had he had a trust and at the very least, slowed down the transaction.

 3. Open and review the mail. Fraudsters can tap into equity lines long thought to be dormant by a senior home owner. Caregivers or family members should monitor checking accounts and be alert to large deposits and withdrawals in a senior’s bank account. Always encourage the use of checks or credit cards instead of cash. This leaves a paper trail. Most importantly, verify signatures on checks or other documents and report any unauthorized or suspicious signatures.

 4. Use monitoring services. Consider using real estate monitoring and credit monitoring services. There are services that monitor property transfers and track unauthorized liens in the county public records. Credit monitoring services, such a Lifelock, are also effective to protect against credit card forgeries or other accounts opened fraudulently. With the recent Equifax hacking, it is a good time to pull your senior's credit report to ensure they are not victims of identity fraud.  

 5. Strength in numbers. Collaborate with a senior's caregiver, family members and financial and legal advisors.  Fraudsters take advantage of isolated seniors who may not have a caregiver or family member living nearby. Encouraging good communication amongst a senior’s family members and / or advisors fosters a layer of protection against fraudsters. The more professionals who work on behalf of a senior, the better.

For more information on this topic, see the Better Business Bureau, or the Federal Bureau of Investigation: See Elder Financial Fraud

 About David Soble:  Since 1990, David Soble   has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. He has over 27 years of real estate and loan law experience to support his good-tempered cynicism.


By David Soble 29 Oct, 2017

 September 29, 2017  

CLEVELAND, Ohio -- In the week since Equifax disclosed its horrific data breach, much has been written about what to do. Now, it's time to talk a bit about what NOT to do:

Don't think that because you've never heard of Equifax before, or never agreed to give them your information, that Equifax doesn't have it. They don't need your permission to compile your information. Banks and other creditors furnish all of your info to the credit bureaus. What the banks don't have is obtained by the bureaus from court records and other public records.

Don't click on links you get by email or from your friends that say it's a link to help you figure out whether your SSN was compromised. There are links being circulated by data theft rings or by people who just want to cause mischief. Don't click on links from sources you don't trust. The official link being provided by Equifax is www.equifaxsecurity2017.com  Your best bet: Type this address in your browser yourself, rather than clicking on any link, including mine.

Don't feel safe if Equifax says your personal data wasn't compromised. Some people type their information into Equifax's online tool and are told their information wasn't stolen. Then they try again the next day and are told their information was indeed stolen. Just assume your information has been compromised and take steps to protect yourself.

Don't believe that a credit freeze, credit monitoring and a fraud alert all accomplish the same thing:

  • A credit freeze locks your credit file to creditors and should keep bad guys from taking out new loans or opening credit cards or buying cellphones in your name.
  • Credit monitoring doesn't keep thieves from using your stolen information; it simply notifies you after  something bad has happened.
  • A fraud alert placed on a credit file cautions creditors that the person's information may have been stolen. But many creditors don't even check this; they're not required to. It's like pretty please.
Don't provide your credit card number to Equifax in connection with any of its services. The credit freezes are free through Equifax through Nov. 21. Its other protection services are free for a year. For now, you'll have to pay $5 in Ohio to freeze your credit files through TransUnion and Experian. The lesser-known fourth bureau, Innovis, doesn't charge a fee. There's regulatory pressure on Equifax to cover everything or reimburse people.


Don't think if you freeze your credit file that it also covers your spouse or kids. Couples have different Social Security numbers, so do each of the kids in a family. A freeze affects only one SSN, not an entire household.

Don't click on ads you see online or links you see in news stories or anything like this, not even my links! Re-type the addresses in your browser. Only click on links when going directly to sites like Equifax, TransUnion, Experian or Innovis.


Don't provide information to entities that send you emails or text messages or letters, or call you on the phone. They're most likely imposters. Fraudsters connected with this breach may try to lull you in because they'll already know your SSN, your date of birth, your home address and a whole bunch more. Reputable companies don't contact you out of sky blue and ask for personal information. Call companies using on a number your find independently (back of credit or debit card, bank statement, company website, etc.)

Don't worry about changing the numbers on your deposit accounts, like checking and savings. These numbers are not in your credit files. But you still need to monitor deposit and investment accounts more closely in case thieves use your stolen information to impersonate you and steal your money.


Don't be scared into not  freezing your credit. For example, TransUnion is working hard to discourage credit freezes. If you contact them online or by phone, TransUnion will try to convince you to "lock" your credit instead of freezing it. They gush that it's free and easy, while cautioning that freezes can be a hassle and cost money.
I think all of the bureaus may start pushing some kind of "lock" instead of a freeze because freezes are regulated by law, locks aren't. Plus, if you're file is frozen, the bureaus may not be able to sell your information to creditors and other companies for those pre-screened credit offers and other marketing purposes.
If you want to freeze your credit, then do it. Don't be talked out it by a pushy credit bureau.

Don't believe that if you freeze your credit that you can just kick back and relax. About 88 percent of fraud involves existing accounts, not new ones. You still need to regularly monitor your credit card, debit card and bank accounts in case someone has your stolen information to gain access. Sign up through your bank and credit cards for email or text alerts so you're notified about activity. Also, monitor your accounts at least once a week online.


Don't use data that was in your credit files as part of any online user name or password, for your email, financial accounts, Facebook, etc. Not your date of birth, not a past phone number or street address, nothing.

Don't think that if you froze your credit files years ago that you're safe from this breach. The theft involved Equifax's internal files, not just the ones available to creditors. The information stolen could be used in all sorts of nefarious ways, including to answer security questions for bank, credit, insurance and investment accounts.

Don't give up. If you've tried to freeze your credit files and haven't been able to get through, wait a week or so. The bureaus have been inundated with volumes that their websites and customer service call centers were never designed to handle. Go on to other protection tactics like signing up for alerts through your bank and credit card, making sure your online passwords are secure, etc.

Don't go to any other source for a free copy of your credit report except www.annualcreditreport.com  or by calling 1-877-322-8228. You will NOT be asked for a credit card or debit card number. Or you can fill out a paper request and mail it certified to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281. Other web sites may say they're free, but there most likely is a free trial period before you have to pay for credit monitoring, or the site may just be a total scam.

Don't freeze only your Equifax credit file. Even though Equifax is the one that suffered the breach, the information stolen from Equifax could be used to open accounts with companies that only check your files through TransUnion or Experian. Truthfully, most creditors don't check all three of your files, unless you're getting a mortgage, because most of your information is the same on all of them.

FREEZING YOUR CREDIT FILES

Equifax by mail:
Write a short note that you're requesting a free credit freeze and include your name, address, Social Security number and date of birth. Mail your request through certified mail to Equifax Security Freeze, PO 105788, Atlanta, GA 30348.

Here are the phone numbers to call
Equifax 800-685-1111
TransUnion 888-909-8872
Experian 888-397-3742.
Innovis: 1-800-540-2505 (a lesser known bureau, used more for business accounts)

Or you can go online:
https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp
https://www.experian.com/freeze/center.html

By David Soble 15 Aug, 2017

The “ Great Recession ” in 2008 has had a lingering effect on how banks lend money to small business owners  and entrepreneurs.  Gone are the days when small businesses have  fast access to bank credit at competitive interest rates. Instead, alternative non-bank lenders, led by companies such as On Deck, Yellowstone, and Cash King, are filling the lending void, growing rapidly on the backs of unwary small business owners.

Here are 5 things small business owners should consider before taking out an “alternative” business loan:


1. Rates That Make Former Sub-Prime Mortgage  Lenders Blush.  High rate loans are the rule rather than the exception for alternative lending sources.  These lenders are not banks and therefore are not federally regulated, unlike companies that provide loans to consumers.   Instead these loans are often  funded by private investors selling credit at effective annual rates that commonly exceed 30%.

2.  Non -cancellable Daily ACH’s.  Since alternative business lenders don’t look at individual or business credit ratings, their risk of not getting paid back is high. They rely on a business’s cash flow only and expect to be paid daily rather than monthly, by using a non-cancellable automatic payment deduction (“ACH”) out of the borrower’s account. The lender can immediately call a loan in default should a business owner fail to replenish their designated account. This exposes the borrower to litigation and further expenses.  Borrowers should be confident that they can meet their daily, rather than monthly, obligations.

3. Arbitration.  Alternative loan contracts generally have expensive arbitration clauses where the debtor agrees to forgo the traditional legal process for a binding decision from designated arbitrators. Arbitration clauses are not favorable to borrowers. They often dictate where a legal case can be heard, usually in a creditor friendly state far removed from the borrower. This creates added expenses to a case even before it’s heard on the merits.   Arbitration decisions usually cannot be appealed (“ binding arbitration ”).  Finally, professional arbitrators have been criticized for having biases in favor of lenders since successful arbitrators make their living from work referred to them by the lending industry.

4. Consent Judgments.Many lenders have business borrowers essentially endorse a “consent judgment” before the the ink is even dry on the original lending agreement.  In a consent judgment, the borrower admits to a default and to the terms of a judgment against them, waiving any legal protections that they might otherwise have.    Lender’s will say that this instrument is harmless and only used in the event of an actual default.  It’s a disturbing trend because it sets the borrower up for failure and legally neutralizes them. (Imagine a hospital locating a corn beef stand next to the cardiac care unit or meeting a bank’s REO bank officer right after you close on the purchase of your home.)

5.  Personal Guarantees.While the business loan is given to the business in name, the small business owner often personally guarantees the payments in the event that their business fails. Personal  loan guarantees are an integral part of the lending agreement, so borrowers should think carefully before signing. Lenders will look to the former business owner to make payments long after a business closes it doors.

Alternative business loans appeal to business owners because the loan process is much  faster than traditional lending sources (some lenders say a loan approval can be given in less than 48 hours) and there are no personal credit requirements.  If you don’t need the money  “yesterday” (these type of lenders anticipate that you do) then one should seek assistance through a non-profit dedicated to helping business owners in all areas of business and finance, a SBA lender ( Small Business Administration ), or the assistance of a knowledgeable business attorney who can help you negotiate a far better loan agreement.

About the Author:  

 Since 1990, David Soble  has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and contract issues. He has been involved in thousands of real estate transactions and has been responsible for billions in real estate loan portfolios throughout his career. 

By David Soble 15 Aug, 2017

According to business periodicals such as  Entrepreneur Magazine , Inc. and  Forbes , with the beginning of each year comes an increase in new business start-ups.  Perhaps this is because people are seeking an increase or alternative means of income,  job independence, or a more rewarding career. Whatever the reason, since the  Great Recession  of 2008, new business filings trend upwards this time each year.  

Regardless of the time of year,  new business owners tend to overlook 3 important considerations that expose them to financial risk and legal liability.  They are:   

1. Meet  Filing  Requirements.  Corporate filing and licensing is a mundane but necessary task.  Without proper paperwork, a business may not have “standing” to bring a suit in court because they are not recognized as a legal entity authorized to perform business.  Seeking to collect past monies owed or to enforce a contract?  “ Lack of standing ” is a valid defense to a lawsuit  On another note,  if you intend to conduct business in another state, you must also meet that state’s corporate filing requirements as well.

2.Create A Meaningful Operating Agreement.   Creating a business entity without an operating agreement falls short of good business planning. Failing to detail your own operating agreement generally means that in the event of a dispute or corporate governance problem,  less favorable ‘boiler -plate” language from a legal form “factory” or state statutory language could be substituted and control how your business relationships operate -contrary to your initial intent. This is especially true where multiple owners are involved as disputes will  invariably arise.  

If a business relationship falls apart (The  Small Business Administration  statistics state that one-third (⅓) of all new businesses close in the first 5 years) it’s best that business owners have predetermined  termination terms in their operating agreement, as opposed to having terms imposed upon them by statute or third parties such as an arbitrator.

3. Read and Understand  Contract  Terms .  Conducting business on a handshake, however sincere, is a thing of the past and impractical in today’s fast -paced global economy.  Business owners encounter contracts in all forms: service agreements, leases, loan agreements, guarantys,  joint ventures, co-marketing, purchase agreements and client agreements are to name but a few. Reading through just one of these documents can be daunting and time consuming.  Most “boiler -plate” contracts are drafted by attorneys and have extensive and onerous “default” provisions.  Don’t “ sign on the bottom line” until you have read your contract for meaning.  If you don’t understand how a contract provision affects you and your legal rights, then by all means consult with your own attorney–not a real estate or leasing agent,  not your cousin in law school, and certainly not ‘their’ attorney.  Consult with your  O-W-N  attorney.  And do it before, not after, you sign a legally binding document.

Never is the old adage, “an ounce of prevention is worth a pound of cure” more appropriate than in today’s business climate.  Experienced business and real estate attorneys regularly address countless variables experienced by businesses just like yours.  Many attorneys will provide new entrepreneurs with a free initial consultation and it’s a solid business decision to take such a meeting.

About the Author:  Since 1990, attorney David Soble has been responsible for billion of dollars in real estate and finance matters representing the interests and legal needs of both small business owners and consumers alike. David can be reached at 888-789-1715.

Disclaimer: You should not rely or act upon the contents of this article without seeking independent legal advice from a qualified attorney.

By David Soble 01 Aug, 2017


I just read about a tragic and avoidable event that happened last week. According to The Washington Post, a Manhattan couple jumped to their deaths from the ledge of their 9th floor apartment. The couple, a chiropractor and his wife, reportedly left a suicide note citing their ever increasing debts as the reason for their despair.  Apparently, they were good people; They were well liked by their friends and patients. They are survived by their two children. ( See The Washington Post, July 29, 2017 .) 

After reading this article, I was immediately taken back to the events of 2008 and the devastating financial wake of the Great Recession. Many businesses and lives were ruined - all because of debt.  I know. As the chief enforcer / attorney for several national lending institutions, I was in the thick of it.  I was responsible for the collection of billions in defaulted loans and my job was to vigorously pursue delinquent debtors and ‘cure’ non-performing loans.

Even in today’s economy there are still people who struggle financially for a number of reasons that include, but are not limited to, underemployment and stagnant wages.  Here are 5 things I wish to impart to those who are burdened with mounting debt and the ever-advancing debt collectors:  


1. Communicate. While it may not feel good,  keeping the lines of communication between creditor and debtor benefits both parties.  Believe it or not, banks and creditors want to work out payment arrangements as opposed to litigation.   Ignoring and avoiding creditors gives a creditor no alternative but to escalate a collection action. This increases debtor anxiety and reduces opportunities for a reasonable settlement.

2. Contact a professional early in the process.

For those who are uncomfortable with negotiations or confrontation,  contacting a professional about a debt issue may be the answer.  For small loan balances, reach out to a non-profit credit or debt counselor early in the process. Larger note obligations or guarantees require the attention of a seasoned professional.

I am frequently retained by clients only after they have already been “steam rolled” by their creditor. These clients thought they could “go it alone.”  I can tell you that cleaning up a legal and financial mess after the fact is far more challenging and expensive than when someone comes for legal advice at the onset of their problem.  (See my article, “Just What Is The Law of Holes?” at  http://bit.ly/prholes ).  Dealing directly with a creditor without proper representation is not the best approach and most often costs a debtor more money in the long term.

3. Don’t bring a knife to a gunfight.

The American Bar Association lists over 75 practice areas of law. Not all attorneys specialize in debt or loan law.  Speaking with the appropriate attorney can prevent costly mistakes. While at the banks,  there were many occasions  that I had the pleasure of sitting across the table from a debtor’s divorce attorney or personal injury attorney. It made my job easy and I welcomed them.  The old adage,   “don’t bring a knife to a gunfight” is never more true than in lending and finance law where debt agreements are usually complex and highly regulated.

4. Beware of  scam artists - they’re everywhere .

Avoid individuals and companies that aren't properly credentialed and that have not been rated by their industry peers.  In fact,  when it comes to consumer issues, almost all professionals working with the public require a state or federal license. Verifying an adviser’s competence and reputation should be a debtor’s top priority.  Today as  I sit to write this article,  The Washington Post features an article about how a California modification scam recently swindled thousands of homeowners out of their home equity, and many lost their homes because of it. Remember:  “Trust but verify.”

5. It really will be okay.   Sure it sounds simplistic and trite, but with the right professional guidance and some patience,  the sting of debt issues subsides over time. There are many ways to successfully approach serious debt issues without filing bankruptcy, such as seeking a court ordered installment payment plan, graduated settlement options, structured debt forgiveness,  and being declared ‘uncollectable.”   To learn more about these and other options one has to actively seek help. (According to a CreditCards.com poll, 85 percent of respondents said they were unlikely or somewhat unlikely to talk with a stranger about credit card debt -- a subject that is more taboo than religion, politics, salary and love life details.)  

Conclusion. Nothing is more professionally and personally gratifying than helping a business owner or individual through the darkness that is mounting installment or revolving debt. I have ushered thousands of people through their debt issues, without bankruptcy, and after they successfully enter into a negotiated settlement, the difference in their demeanor is truly night and day. Once debt problems are resolved, it is as if you can see the heavy financial burden lift off a client’s shoulders. I only wish the poor couple from Manhattan could have known this relief as well. R.I.P.

About the Author: Since 1990, Michigan attorney David Soble has represented lenders, loan servicers, consumers and business owners with legal matters related to finance and real estate.  He has been involved in thousands of real estate transactions and has successfully negotiated and saved millions for his clients.

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

 


By David Soble 30 Jun, 2017


 This week, the FBI and local law enforcement officials raided the business offices of realtor Ralph Roberts .  Roberts is the subject of an ongoing criminal investigation and several news probes.  In controversy is his alleged ‘misuse’ of the Michigan public administrator system. It’s supposed that Roberts finds properties of deceased homeowners, uses a public administrator to open an estate in probate court,  and then bills the estate for his sales commissions and other “services.”

 At first blush, I find Robert’s alleged sales practices ignoble, to say the least.   But until the authorities release more of their findings, I am not convinced that this contentious salesman has done anything illegal.  What this investigation does confirm however,  is that in the business of real estate, people are always looking for another ‘angle’ to make ‘big’ money, and every so often, they will knowingly cross the line to the detriment of unwitting homeowners.  

 Here 7  things you can do to protect your real estate from “charlatans’ and (frankly) from yourself: 

      1.    Say no to blank documents.  Never sign any blank documents. If you are unsure, make a large “X”on the blank page, and then sign beneath it.  Similarly always retain a copy of your signed contracts.

      2.   Know before you sign. In the real estate business, written contracts define relationships, obligations and one’s legal rights.   If you read a contract and don’t understand it, don’t sign it. Also, never rely on an explanation of “how things work” from the party who stands to benefit from your lack of knowledge.

     3.     “Fake” attorneys . Similar to the preceding paragraph, don’t accept legal advice from someone who is not a licensed attorney.  Accountants, doctors, real estate agents, mortgage brokers, or the county clerk are not attorneys and cannot dispense legal advice or draft legal documents.  In other words, ignore the outside chatter of your “mother’s friend’s sister’s son.” Odds are (1)  they aren’t an attorney, (2) their situation has a different set of facts and is not completely on point, and (3) they won't be there for you when @#$%@# hits the fan. 

     4.     Record your property interest. Always record your property deed with the county in which your property sits. Holding onto an unrecorded deed does little good to notify the world that you have ownership in a particular piece of real estate.  If you ‘snooze’ and don’t record your property interest, you can ‘lose’ your property rights. 

     5.     Save the D.I.Y. for Home Depot.  Drafting your own deeds or other legal documents without the proper language and legal guidance is a recipe for disaster.  Unwinding a real estate transaction (or any contract for that matter)  involving a person(s) that you have grown to hate, can be very expensive and emotionally draining. It only becomes worse when you find out that your D.I.Y. contract inadvertently gave another party more legal rights and protections than you gave yourself.    

     6.     Open your mail, @#$% - it.  Unless you’re a clairvoyant, open your mail.  Important legal notices that affect legal rights come in the mail. They aren’t often texted.  Legal processes have sensitive timelines.  Miss a legal deadline and it becomes almost impossible and very expensive to reinstate your rights.   People pay more attention to what they’re going to “binge watch” on Netflix than they do to their legal rights. Give your legal issue the proper attention it deserves so that later on you don’t have to devote all of your time, energy and money to cleaning up a legal mess.  

      7.  Consult with an attorney before “Google.” Our property laws are deeply rooted in centuries of legal history and case law. Lawyers devote years of their lives to their legal education and to their practice to perfect their craft.  One or two Google search results cannot adequately address a legal problem.  Consult with an attorney who specializes in your area of concern.

      Bonus Item.   In the real estate business, nothing of value is free. There is tremendous value in seeking “preventative” legal advice, but beyond that and above all else, when it comes to all of those “great” real estate deals that your friend or family member has turned you on to...remember this one axiom, ”nothing of value is free..”..repeat….”nothing of value is free”  ..”.nothing of value is free....”

 

       About the Author:   Since 1990, Michigan real estate and finance attorney David Soble has represented lenders, business owners and individuals in real estate, loan, and contract matters.  He has structured countless real estate transactions worth millions,  and has successfully saved millions of dollars for his business and consumer clients.

       Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

 


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