This is how Kip buys his homes, as reported to me in the "bid deal":
1. He finds someone---a "faux buyer"--- with good credit to finance a home buy of desperate sellers who can't access their equity because of credit problems.
2. He gives the faux buyer a fee (minimum 10,000 and depends on the price of the home) to use their good credit to get one of the credit only mortgage loans, et al.
3. He pumps up how much they earn on the loan papers:
The essence of fraud: "The concealment of negative facts to obtain something of value."
4. He takes the equity in the house.
Purportedly some is supposed to go to the seller to help them pay off credit---which is the product he is selling to the seller; obviously the faux buyer takes their cut from this.
5. The seller is told they can buy back the house in one year at the same price they sold it. That's all I know of the bare bones of the deal. Questions I had were:
a. What is the downside? I was told there is no downside unless Kip dies, intuitively, that might mean he does a partnership with the faux buyer on the loan, and the faux buyer assumes the risk and liabilities.
b. What if the market drops and the house is worth less, how will a former bad credit seller with no money down (because they just lost the only equity they had in the home) buy back a house the bank sees as over priced.
c. What is the seller, who is now the renter, stops paying rent? Hello Mortgage Security debacle now dragging down the economy that will drag down real estate values in neighborhoods Kip did his deals when he has to dump these places fast.
6. Obviously, he never intended to pay the mortgages so the sellers could buy back the home.
Spring/2006, I was queried by one of his "faux-buyers" to use my excellent credit as a way to make $10,000.00 for his creative financing scheme. This faux buyer, whose "undocumented income" (~$40K to 55K) and good credit, was used to help Kip buy properties in the $200K to 400K+ range, said he found out about the $10,000.00 deals from the owner of Golden Heart massage studio in Sellwood (PDX), ---who had allegedly done a lot of deals with Kip.
The faux buyer didn't believe me when I told him he had to report that $10K as income to the IRS and would have to pay about a 50% tax---that's how na´ve these "faux buyer" targets are of Kips. The Golden Heart owner might be the massage connection to his spa business in Corvallis.
Complaints to file:
1.The IRS and state needs to take a look at income coming and going on those books at his Corvallis businesses and if they are stocked with "faux buyers".
2. OR Attorney General and Insurance Commissioner: There is possibly mortgage fraud, bank fraud, insurance fraud depending how the paperwork was done.
3. FBI and Federal: If any mail or money passed electronically between states due to these deals that could be a Federal offense of Interstate Fraud.
4. Unfortunately, the faux buyers are wrapped up in these deals too, and maybe hoping Kip doesn't die leaving them holding the bag.
5. Class actions in the sub-prime and regular markets have been recently waged and won against bankers and mortgage/real estate frauds who misled buyers/sellers.
6. Don't count on the real estate wife as being an innocent.
7. Send your info to the news papers of Corvallis and surrounding towns and run this black hat/red door out of town---it's your community---stand up for it.
8. I hope he and his wife go to prison.