I hear people talk about Dave Ramsey like he is the smartest guy around. He actually has a lot of good things to say. I've listened to him help a lot of people get out of debt. I've heard him give a lot of good advice. He has done a lot of good. However, Dave and I differ on quite a few things.
Tonight, on my way home from a meeting, I was listening to the "Dave Ramsey Show." Yes, I, the Financial Survivalist, listened to the Dave Ramsey show. He got a call from a guy that was underwater on an investment property. The caller asked about note acquisition. Dave then told the caller he should get a lawyer to go to the bank and act like a different buyer in order to acquire his own note from the bank at a discounted value. Basically, deceive the bank into lowering the amount of money he owes the bank.
Especially if you are in an underwater position on your own home, you might wonder, "What's wrong with that?" Well, a loan is a legal agreement between two parties, and in general I believe you should honor your agreements. Also, this is mortgage fraud. It is using a third party to try and get out of your loan and keep the colateral.
It's a good thing Dave advised him to get a lawyer. A good lawyer will tell him that he can't do this. A bad lawyer could get him in a lot of trouble. In fact, depending on the loan terms, this could put the caller into default and the bank could call his loan due. Then the caller could lose the property.
Now, Dave isn't without real estate experience. He built a real estate empire and lost it all because of bad investing (see future post). As he makes apparent, he hasn't used any financing for a while, and therefor has been "out of the loop" for a while. In fact, he hasn't been up to date on the applicable laws for over 20 years! These laws have changed quite a bit in the last 20 years, especially with the recent real estate crash.
Like I said before, Dave has a lot of good things to say. However, take his advice (and mine) with a grain of salt. Hear it, and then do your own research. Learn for yourself so you can make your own decisions. In today's financial world there is nothing that will compensate for financial ignorance. Visit our book shelf and educate yourself. It's the only way to financially thrive.
Be smart and thrive.
Friday, November 4, 2011
Why Dave Ramsey is an Epic Fail: Mortgage Fraud
Subscribe to:
Post Comments (Atom)
DISCLAIMER!!!!!!!!!!!!!! Financial Survivalist MAKES NO CLAIMS WHATSOEVER REGARDING PAST OR FUTURE PERFORMANCE of investments. ALL EXAMPLES, DIAGRAMS, DISCUSSIONS, LESSONS, OR RECOMMENDATIONS ARE FOR EDUCATIONAL OR ENTERTAINMENT PURPOSES ONLY. THIS BLOG DOES NOT AND IS NOT INTENDED TO PROVIDE FINANCIAL ADVICE OF ANY KIND. ANY COMMENTARY USED ON THIS PAGE IS FOR PURPOSES OF DISCUSSION ONLY. PLEASE SEEK PROFESSIONAL ADVICE BEFORE YOU TO BUY OR SELL SECURITIES AND YOU SHOULD NOT CONSTRUE ANYTHING ON THIS PAGE AS LEGAL, TAX, INVESTMENT, FINANCIAL OR ANY OTHER TYPE OF ADVICE. PROFESSIONAL ADVISE should be sought before entering any dangerous environment. Do not attempt any act described or discussed on this website.
I'm a Psychologist and I can tell you Dave Ramsey is a Narcissist.
ReplyDelete