public exposure we've come to you from a lot of different places but this time where it's got the bar and grill and edmonds washington and we're talking with one of the best consumer advocates that there ever was and it's a consumer advocacy show that everybody's going to want to listen to howard bano from my financial revival howard well thank you for having me my financial revival where you tell me just a little bit about it well what we do basically is we work with people to omar on their houses in their houses and work out which if you've got a mortgage puget sound area and you have a mortgage on your house chances are about fifty fifty that you owe more on that house than your house is worth and you need some place to go to find out what can you do and what kind of options you've got and that's really precisely what we did right there's an article out in the well it's from my northwest dot com and it says it says over a third of seattle area homeowners are still underwater now underwater what does that mean it just means simply that you owe more on your house than your house is worth now you said it's more like fifty percent the article that you're you're referring to says a third of seattle refuses some homeowners are upside down what i'm saying is if you have a mortgage on your house there's a lot of people who own their houses outright so if you have a mortgage on your house it's about fifty fifty whether you're a rarely get that high price and if you bought if you took out a mortgage after about two thousand that number is even higher so essentially then the problem that we're facing is worse than than what we're being told well there's a little spin going on trying to make it appear maybe not quite as severe as it really is but the truth is you feel the mortgage on your house in the puget sound area it's about a fifty fifty shot that you owe more on the house than your house is w some choices there are you going to ride this out you've got to make some changes what is it that you're on that you're going to do so what kind of could cern's should homeowners have i mean it if they've never had to think about this at all so what kind of concern should they have especially if they're paying their mortgage on a regular basis well the question is several things most people are still paying their mortgage on a regular basis now but there's an awful lot of people that what they're doing is they're having to take money out of savings they're having to take money out of their retirement accounts just to try to keep that pace out so the question is going to be is whatever situation that the individual homeowners dealing with income being cut those kinds of things is that going to rectify itself before the housing market finishes its collapse or the housing market stuff starts to come back so there's all these moving parts that people need to consider what they're doing and there's a giant buzzword right there before the housing market finishes its collapse i mean it's not over yet my goodness it's not even close to being over all this is not good news no we have seen housing prices go up a little bit and let me tell you a little bit about why most of the if you talk to a real  the last year is they've cut back to something that millions of houses that they need to self they just haven't put on the market when the well several reasons this was an election year so is there any influence there to try to make housing prices  mini housing bubble where we've seen housing prices go up and so what they've been able to do is to to these groups it kind of put out in the news that hasn't prices are going up maybe we're getting close to the bottom some people have actually called the bottom of the housing market we still think that it's at least two years away how much further our housing price is then realistically likely to go down we're thinking that we still have at least a ten percent drop they could go more depending on what happens if we continue with unemployment rates where they are if we continue with the lack of consumer spending where they are if we continue with the increase difficulty that that buyers have in terms of getting a loan to buy a house we could see them drop further than that but should i be encouraged by this settlement the attorney general set up with the banks what is that what does that mean for me what it means is that the federal government and was not able to rein in the because the banks were committing the big five banks they were committing an awful lot of fraud in the way that they were going about actually foreclosing on houses they were falsifying documents in notarizing documents they'd never seen those kinds of things so the federal government really didn't deal with that issue as a matter of fact the federal government went to bank of america and said you've got a problem here fix it they gave banks twenty eight days later bank of america came back and said yeah we found a few you know minor things that we were doing but we've got all fixed now the attorneys general around the states said no that's not enough and we need to go in and settle with these big banks on behalf of the consumers of our states so that settlement agreement was signed about six months ago twenty billion dollars the large banks had agreed to lower principal to the tune of twenty billion dollars for homeowners now the interesting thing about that twenty billion dollars is said no principal reduction so if you have a loan that is owned by a consortium of a mortgage backed security you don't get any help there so what the banks did is they went back in and they  forgiveness on your second mortgage but here's the kicker you had to already be behind by a minimum of three months before you even read and considered in the pool for eligibility so for those people that have been paying their debts the whole time they're out they weren't even considered for for eligibility so is that is that what you and you mean on your website when you say the big banks don't want don't want you to know some of the things that you're about to tell us well that's one of the things that they don't want me there is even more oh my goodness some more example in the state of washington if you have one loan on your house the banks want you to believe that they will destroy your financial world if you don't continue to make the payments the truth is if you decide that you're going to not make payments on your house you can live in your house we can safely say about a year without making a payment on it the bank would foreclose on it but the state statute also says that the banks have no eligibility no rights ever to come back after you for any of the money they lose or whatever help help me understand is if i borrow money that secure about my house if i borrow five hundred thousand dollars or scared by my house i've paid it down to where the principle that's owed is four hundred twenty five thousand dollars if it's foreclosed on somebody comes in and buys it for three seventy five there's fifty thousand dollars left the bank can't come after me for that you know really well now there are some differences and there are some nuances as we mentioned earlier th lots and lots of moving parts in that you know ok if you let your house go into foreclosure for example you're going to foreclosure on your credit report and that kind of thing interesting enough if you went to that full extreme and lived in your house free for a year and a half or however long and you had a foreclosure on your record you can buy another house three years later it only takes three people think it's seven or ten runs out forever no no it's only three and so let's say you bought a house for five hundred thousand financed for fifty and today that house is worth three fifty and you still owe four fifty on it you could walk away from that not walk away as a venture you could live there for an extended period of time without making payments on it the bank could foreclose on that property the banks i don't know that really care because yes it would be another camera that they could use to say look you're going to have this big tax stat but the banks themselves aren't going to get any more or any less money whether that law gets extended or whether that law simply as a protection for homeowners from the i r s you know and i don't know about you but i would rather not chase bank chasing the four hundred thousand than the i r s chasing me for money there's something really interesting on the website of my financial revival dot com that i just had to ask you about in the headline is this is from september twenty first two thousand and twelve if banks have agreed to forgive debt shouldn't they do it for people who are still alive and rule was that that's an actual story now we talked just a minute ago about the attorneys general settlement where the banks have to forgive twenty billion dollars in debt they have a three year old i know that's across united states that's across the united states with the exception of oklahoma because they opted out forty nine attorneys general o they don't even know who owns a in truth they really do they just know they don't want to look is that is that not really accurate true you know if you ask in their files who owns it they don't really know can they track it down relatively quickly you said that's the is whole nother aspect of it mers was simply a corporation that the big banks devised so they could transfer loans around to each other without paying the excise tax that many counties in the country require to be paid every time a loan is transferred so that was simply a shell game that the banks did to to eliminate having to pay county tax you know i want to play this song we won't get fooled again but i know that we will absolutely people and they're so far i had been developing these financial tools that the government with the limited resources the government has simply can't keep up and you know i interrupted you because you were telling the story of this headline of people  excuse me at the end of two thousand and ten he died in early two thousand and eleven february he and his wife were living in this house and they had a big second mortgage on it she's not on the mortgage she's not on the title so really when he passed that house is in probate and the banks of course are going to get any money they forgave one hundred eleven thousand bank of america forgave him one hundred eleven thousand dollar second mortgage in part of the attorneys general settlement and the attorney general said it was signed well more than a year later after this gentleman died so they were never going to collect a nickel on this anyway but what they did was they forgave this hundred eleven thousand dollars second mortgage and they're taking one hundred twenty five percent credit towards the towards the total settlement so they're getting extra credit for it and we've been told that in addition to the extra credit they get that they also get multiples in terms of tax write offs when they took your debt now this was a debt they were never going to get a nickel on because this gentleman passed you know a long time before and we've heard multiple stories this is just one that was hit close to home because we know all the players and we know the actual story you know why and the other part of the actual story is that whenever there is a tax write off that is given to a bank that's actually a public subsidy of banks to the rest of us because the banks are there they're making plenty of profits so we've might get two or three times not one hundred eleven thousand in an actual tax write off so if you're working with a client who comes to you and says i'm underwater you know out i'm underwater by by twenty five percent at least twenty five percent of the of the amount of the value of the when you tell well the way our program works is we start with a free fifteen minute phone consultation so so people can still remain relatively anonymous and the goal of the phone consultation is simply to be able to answer their immediate questions everybody's got something that's nagging at them that stops them from sleeping at night so we want to help them to overcome those things by getting clear definitive answers then the next step we we bring them in for a ninety minute consultation we do a little homework we want to know how much they make how much they know how they're surviving now and how they're doing and what their long term goals are and then we go through all the options that people have available now that's everything from stay and keep paying on your house just the way that you've been doing  all the way down to quit paying it and i think so and there's every step in between all the different government programs all the different things that the little the little pieces of the puzzle that people might already have what we want to help them to do is to have all of the pieces and most importantly the picture on the outside of the puzzle box to some that they know what the puzzle looks like when it's all put together and let them choose basically what's in their best interest as opposed to what road somebody else might be leaving that well also on your website the f a q's really important on any web site for you know frequently asked questions and we're going to put them up on the screen we don't have time to go through all of them but this essentially you know can go to jail if i don't pay my mortgage is that people really ask that these that i sleep you'd be surprised i get asked that question probably at least once a week you know and when we sit down with people who are going through and saying you can do this you can do that you can do this here's the way the banks operate here is how we throw a wrench in that here right so people would say can i go to jail for this because people are honorable you know people that own have everybody i believe for the most part is honorable they they don't know our banks  playing i mean i can show you things that the banks do are they dishonorable because they are so disorganized are they dishonorable because they are businesses businesses are required to have honor or morals businesses are required to make a profit so is it because of that do they operate under different rules than we do and say that's probably a fair statement in your business i'm a business spirit and i'm a small business i am i am on a mission here because you know i lost an awful lot of money in that and i think this this collapse of the housing market was orchestrated the more research i do the more i believe it was orchestrated really and i've lost so much money that it's my mission now and i'm going to make sure that that the public gets one hundred times back when i last because probably a dumb question i've asked them before who when it's in the orchestration of the collapse of the housing market well let's look at it this way and we've seen this is just one of the things that come to my mind we've seen for the last couple of decades where businesses are constantly harping on the fact that they need to lower their labor costs would you agree yeah you know so they can compete in the global market that's what i've been trying to do we're seeing an awful lot of pressure on unions at this point and that is the reason behind it they're saying gotta get labor costs down the truth is when i see is i mean if you go to work at boeing today you're going to make not thirty dollars an hour about fourteen  people working for twelve to fifteen dollars an hour businesses in general i'm not saying boeing i'm just saying business is in general want people working for twelve to fifteen dollars an hour huge huge pressure on pushing down hourly rates for workers if if businesses and banks can push the housing values down to those levels and they don't have to pay for it they wind well so that's just one of the reasons why i think it's orchestrated another section on your web site is testimonials and there's there's quite a few testimonials but one of them kind of sticks out and we're actually going to put part of it up on the screen we're going to make sure that we we block out the name of the person because we don't want to do anything there but this is a gentleman who says i lost my wife of twenty seven years suddenly and aside from the grief i was left with a huge hole in our family income and three kids to take care of we were we got used to eating rice and beans you know and the rest of the story we'll let you read for yourself but what happened i mean if he's a testimonial  something there's a rainbow at the end of the story there is and this guy and what happened was his all of this is an absolute true story why for twenty seven years when a daycare center out of their house and they were she was making sixty to eighty thousand dollars a year running the state care center out of their house and she passed it was sudden it was sudden so not only did he have to deal with shutting down her business but also the immediate stop it jim all of that income his started selling assets you know he had a motorcycle and they had you know extra cars and that kind of thing so he started selling those assets off trying to continue to make his house payments and and when those assets had been sold off and used to make house payments and he spent all of his savings he contacted his bank which is what we're told to do and you know the bank said well you don't qualify for a loan modification because you don't make enough money so you need to go talk to a housing counselor so he went talk to the housing counselor foll all the rules in the back of the housing counselor basically said you can't afford this house you're going to have to do something else and at that point it was really you know it was well he heard one of our ads on the radio and called us and we laid out for him a program where he could live in that house for free for the time and then be it for as long as he could basically and use that money to kind of reestablish his family reset a new ground zero for what he's going to be able to the way they're going to be able to live based on his income but he had that period of time that he could do it without making the house payment so we gave him that reprieve that needed to kind of come together with the spirits and say this is the way that we're go going to be a little bit different but we're going to we're going to tighten up as a family and make that happen so he lived in his house for more than a year without making a plan and they finally did come foreclose on it is ok with him because he couldn't afford it anyway and  we made sure that he didn't have any tax issues so he doesn't have any so basically he walked away with damaged had ups and he and his kids went and rented another house coincidently in the same neighborhood that they were living at and so he rented another ho could afford and so now they've reset they can live comfortably on the income that he makes it come together as a family but they got that that break for that year or so in order to be able to do that and basically we walked him through that process of how to go about that without having to worry about the banks coming after him or his friends is that well do you have an average story you know you know originally when we started that when i started this company i wanted to create a kit and sell it on the internet because i thought that that would be easier if people didn't want to talk openly about this issue and what i found is that every single person that we deal with this difference i don't have two clients that are even close to they have different issues so that's why we do our ninety minute consultation and that's why we did the free fifteen minute upfront phone calls will take a shot because everybody is different everybody requires an awful lot of hand holding because the banks are very sophisticated in the way that they deal with neil who do you negotiate directly with the bank on behalf of the you were not allowed to do that simply because we're not attorneys so we know what to say even more so than most attorneys but we're not allowed to do that and the truth is we are  clients not to really spend much time talking with the banks because the only thing the banks are interested in is they want to know they want complete updated financials from you so they know how they can come back after you know where the bodies are buried so to speak they know where your income comes from they know where you keep it they know how much is there that's why they want all this information and so for most people the individual conversation with the bank is not pleasant yeah so that affects them for a period of time and  the bank is only after things that are going to help the bank to further be aggressive against that particular client and for most people they don't need it or they don't want it or they won't know what's poppin you do have other you have bankruptcy tourney's you  advisors insurance advisors family counselors nobody no one group can handle the world wide spectrum of issues that are developed in this process so what we did was we said let's determine what an individual really needs and then let's make sure that we have the experts that we can send those people to immediately to get that morsel that piece of the total puzzle fixed so yeah we have bankruptcy attorneys we have real estate attorneys we we have just a pretty wide range and then we can tell these people look you need to spend some time with this person to be able to help you so if i were to ask you the question what does success mean if i'm one of your clients and your answer would have to be it depends right exactly it's like what do you want success to look like if you want to keep your house you know we've got people that say i've got a big second mortgage i want to get out of the second mortgage and keep my house and you know that's one thing i've other people  you know look at that a whole bunch of other credit cards that you know and are not worth and so success for me would be to live in my house free for the next two years get rid of all of that debts you know and then be able to move along completely different scenario  that's why we have to our job is pretty labor intensive really because we really do have to do an awful lot of counseling type work to help people to understand yes you can get to where you want to go and it may not be pretty and it may not be that the path that you thought you were going to have to take but we can help you to get there we have viewers and lots of different places not just in king county but what areas do you work and i've got clients all over the state really really all of the operate all over the state you know we have a meeting once a month for our ongoing members and currently we're doing meetings in arlington bellevue and it's federal way and then our next meeting that will be opening up and looks like it's probably going to be olympia really snow once a month to bring our members together so they get a chance to talk to each other we've got less than thirty seconds but can government help government i think missed the window i think in this the window to how the programs that have been put out now are now in their second generation we suspend howard bottom of my financial world viable and we're coming to you again from scott's bar and grill in edmonds washington we thank them very much for their hospitality if you have some financial issues especially related to your house go check it out see next