Bisendra Melaram: [00:00:00] Welcome back castle dwellers to the keys to the castle today. We're tackling a hot topic with major real estate implications. Joining me are the usual suspects, real estate attorney, Jason Kleiger and mortgage pro Jason Marcus.

Buckle up, because we're diving into recent civil fraud case against former president Donald Trump. 

 This episode is for informational purposes only and does not constitute legal or financial advice. Always consult with a qualified professional for specific guidance.

Gentlemen, welcome back. 

Jason Marcus: Yes, yes, I, 

Jason Kleiger: I, you know, I, I've, I've waited so long. Thank you, Bissandra. So long for what? Just this. 

Bisendra Melaram: So, former President Trump has been in the news a lot lately. And we're not gonna get too political here because We're literally talking about politics.

Yeah. But we're, we're gonna speak specifically about the civil fraud case because it overlaps our industry and our respective industries within real estate, So I want to clarify a lot [00:01:00] of information for the consumers listening that may be concerned about, Oh, he had a property and they saying that he overvalued it and defrauded the lending institution that he borrowed the money from.

And I just want us to clarify for everyone, that it's not how the process works. We're not here to discuss the trial itself. We're not here to discuss the outcome, the individuals at play, none of it, just the overall processes. Let's break it down. First, just a quick recap. New Letitia James sued the Trump Organization for civil fraud, alleging they inflated asset values to obtain favorable loans and insurance rates.

That's all we're going to talk about. I have other notes, but we're not going to get into that. 

 So let's go over the process. This is basically our, you know, just like any other real estate process, you have someone that owns a property, they're going to sell the property. Okay. [00:02:00] Or even in the case of a refinance, right? It's the same, it's the same thing. So you contact the lending institution of your choice.

You say, Hey, I have this property. I want to buy it or I want to refinance it. Same process. So Mr. Marcus, walk us through the process. I have my house. I want to refi. I call you up. I said, Mr. Marcus, I want to refi. I fill out an application with you first. Correct? Correct. And then. There is a third party involved.

Of course. They are called an an assessor or an appraiser. Yeah, the appraiser telling you what the value is. And that person is not party to anything other than determining the true value of the real property. Correct. Okay. So once, so when that appraiser or assessor comes back, do I get a copy of the appraisal report or does the lending institution get their appraisal report?

Both. Right. Because I, me as the borrower. I paid for it. Yeah, 

Jason Marcus: and we're actually, legally, have to give you a copy of that 

Bisendra Melaram: appraisal. Okay, [00:03:00] fantastic. So, then what happens? Let's just, in the case of a refi, everybody thinks that their house is worth 5 million. I call you up, I say, Mr.

Marcus, I want to refi my house. It's worth 5 million. How much money can you lend me? 

Jason Marcus: I then go into the guidelines set forth by Fannie Mae and Freddie Mac. And the rules and regulations governing those bodies on what somebody can extract from their house based on a 3rd party assessment. In this case, the appraiser and very specific, straightforward residential rules.

What we're talking about right here. And really, the root of what we have problematically. Is commercial is the Wild West and why this even exists is the fact that for some reason there aren't the same sort of rules and regulations to govern commercial as there is to govern residential. [00:04:00] If it does. Mr.

Trump sitting in his house right now, like without a care in the world, but the fact of the matter is, is these rules don't exist. They can sit there and manipulate, which leads to obviously this type of litigation, which leads to criminal acts, which leads to this predicament that he's found himself. Mr.

Kleiger, any thoughts? 

Jason Kleiger: Well, coming from my CPA background, but anyway the issue here is that you can't have it both ways. You can't say, Hey, my property in Florida is worth 1. 2 billion. And then have a bank look at that and say, you know what? We're going to lend based on your assessment that it is 1. 2 billion.

Because you know what? You had a huge CPA firm in New York city say, you know what? Yes, it is 1. 2 [00:05:00] billion. However, at the same time, You're saying, Oh, well, you know, it's only worth about 15 million, okay, to the IRS. You can't have it both ways. cake can eat it too. Can't do it. Exactly. Okay. So if you want to have it where you feel like your property is 1.

2 billion and you want to take out a loan based on that, but then you say, Hey you know, it's only worth 12, 15, even 2, 100, 000, 000. If you, you know, to, to report that to the IRS is just asinine. And I, I don't, like I said, I don't want to get into the politics of it and everything like that. But at the same time, you have to think of it as, you know, over inflating on one end so that you get that money, you get that refi, you get that you know, charge of money that you need, and on the other end, you get that loss.

Okay. When you get that loss. [00:06:00] And you have that money, it doesn't work out. And, and that's where I believe the, I, you know, I'm like, like I said, I'm not going to call it a jig. I'm not going to call it. You know, but at that time, you know, it doesn't add up, but 

Jason Marcus: let's, let's delve into the commercial real estate industry.

And this is where I'm starting to get heated up and annoyed about what's going on with this stuff. So you guys out there, you're listening and it's just like, okay, stay, say the value of this is X, the banks lent against them. Like if they're on the hook, fine. And it's like, who cares if he's paying. his monthly dues to the bank, and everything's all rosy.

Well, let's just fast forward real quick. And if you guys are paying any attention out there, what's going on in the commercial real estate space, like, especially with what happened to COVID, what happened, everybody started to work remotely, people weren't tied to the city, major spaces, not being occupied by companies anymore.

So guess what's going on? [00:07:00] These buildings? Oh, against them more than what they are now actually valued at. And guess what? Who owns these things? Is it people? No, it's corporations. So guess what they're going to do? They're going to bankrupt those corporations. They're going to walk away scot free, because guess what, if the building Oh, if you're building is worth 5 million, and you owe 10 million, and there's no negative repercussions from walking away from it.

Guess what? These guys are all going to do. All right. Take the building back bank. Nice talking to you. And these guys are going to start to literally crumble, which behind the scenes, this is the biggest fear in the banking world on the commercial banking world side that. Smart, rich people are going to walk away from undervalued properties that they owe large sums of money against because this unregulated method of lending money occurred.

So forget about even what's going on with Trump or any of [00:08:00] these other people in regards to the legal ramifications us as humans that are dealing with the economy itself. Should be concerned with what's going on in the commercial real estate space 

Jason Kleiger: And and you know, I I look back at 2007 2008 And I just see oh the good old days.

Oh, yeah And I just see like lehman brothers. Oh and you know these other properties that people default on and next thing, you know Who does it fall on? It falls on the consumer. It falls on Jane Q. Consumer, Joe Q. Consumer. And, you know, you think, oh, these are these giant buildings. These are these, you know, moguls that run these buildings and they're just ruining the banks and the banks are no.

The banks have to make their money somehow. Okay, maybe they're our friend. Maybe they're not okay and we're talking big banks like the example Lehman Brothers and What happens is you have a situation where? [00:09:00] You know you have too many of these moguls, let's say that draw up, you know way too much fun and wait way too many funds, excuse me and next thing you know They're all saying, Hey, we're bankrupt, we're, we don't have money.

And this is what happens. And exactly the same thing that happened in 2007, 2008 will happen if way too many people or too many corporations find this to happen. And my fear and I'm sure a lot of other people's is that this will happen again. Right now we're at a certain. interest rate, we don't need it to go any higher.

Bisendra Melaram: Well, from a real estate perspective, the inflated values are particularly concerning, right? Lenders rely on accurate information, right? Because they, they work on a calculated risk. And I'm just reading off my notes, So they use that calculated risk and determine loan amounts. Of course. If [00:10:00] the asset value is artificially inflated, it's just a bad recipe altogether.

And like you said, reminiscent of. Two thousand, early two thousands.

So here's my perspective. That when, we're not strangers to what I'm about to say. When you do and conduct business ethically, you don't have this problem. Because there's a lot of checks and balances in place, The lending institution is just one barrier that you have to cross where they don't want to lose money.

Yeah. Right? They don't want to lose money, so they're going to make sure that they're going to recoup all of their money, not just a portion of it. They want all their money back and then some, which is the interest, of course. Because there's a cost to lending and borrowing money. from a residential perspective, I know we're talking a lot of commercial, but it doesn't matter.

Residential or commercial, there's an agent involved. The agent has to do their own due diligence before presenting the property, whether on the sale side or the purchase side. Okay. We all have a certain responsibility. So when I [00:11:00] pass the docs off to either Mr. Marcus or Mr. Kleiger, you know, okay, certain things were checked, but you will still double check and triple check because it starts here, goes to you.

And then from you, it goes to the attorney, but the bank has their own attorney. So there's a lot of checks and balances and a lot of transparency to be had so I don't want anyone to feel Oh with all this stuff if they're going after him, they're gonna come after me And how do I know that I'm not gonna get duped and I'm gonna get sued and I'm gonna this and I'm under that No, it's not gonna happen.

 So everyone that's a little skittish There's no need to be there's a lot of checks and balances when you do work with professionals Function ethically consistently. So there's no need for anyone to be, Oh my God. 

Jason Kleiger: And to, to kind of buttress off of the Bisendra's point is, you know, doom and gloom is one thing, it's another thing.

If you you know, be truthful and, you know, go with a lender that [00:12:00] you trust you will see that. We don't have to worry about those nonsense things. These are giant corporations that, you know, they're, they're not looking for your 700, 000 deal. They're not coming after, you know, your FHA mortgage.

They're not coming after your 20 percent down. Okay, this is, you know, we were talking about big commercial deals. And as long as you trust your lender, you are honest with your lender, you provide your lender with everything, your lender will do everything possible to get you the best loan. And you know, I know Mark, Mr.

Marcus for a long time. And again, he is someone that as long as you give everything you can truthfully and honestly, there's no problem there. 

Jason Marcus: And again, we. We're talking about two different sides of a coin and [00:13:00] 2008, I mean, I'm not going to sit here and tell you guys that I was all fired up fist pumping about the way regulations stepped into the mortgage field to eliminate the people that we're not talking about right here, where it is those people.

predatory lenders that came after people put them into terrible stated income, stated asset loans, like misleading W 2s, misrepresenting jobs and job histories and job titles and job amounts. But again, we're in a situation where they corrected the residential loan side of things, but didn't do anything to regulate the commercial side.

Now, as we all know, when it comes down to Contributions to campaigns when it comes down to [00:14:00] these backdoor deals that are getting done, it's not getting done by the guy buying a 500, 000 house. It's getting done by these huge corporate conglomerates that are basically scratching each other's backs. They kept commercial non regulated.

Now we're starting to get to a point where those same people that took advantage of that situation could literally help crumble our economy by letting there be a disastrous result on the commercial side. So. I am not for government intervention into business. That's not what I'm about, but there was a by product of that in 2008 with Dodd Frank that at least made somebody like me ethical, hardworking, clean [00:15:00] cut client, most important people that set structure.

to getting it so that way I wasn't losing my deals to my uncle is a plumber but he does mortgages part time that it's like I'm sitting there asking these people questions and trust me guys you need years to master this trait that of what I do this isn't something you can do part time half ass neither The gentleman to my right or left are in professions that that could also be.

a part time gig, you want to be a phenomenal real estate agent, you got to be all in. Naturally, we know what lawyers have to do to become lawyers. And even that you still need to master that sector of the business that you're focused on. So perfect example. And we all know this, like, My uncle's an [00:16:00] attorney.

This guy has never practiced real estate attorney in his life, but yet I'm trusting him on the biggest transaction of my life based on a half a semester from 27 years ago in law school. No, thank you. I want a guy who is going to be like Jay hands on doing these transactions in the ditch knows what he's doing.

And specifically. is qualified to recommend and obviously help clients through this process because he's done this and been there before. But again, right now, my biggest fear is the lack of regulation and this you scratch my back. I scratch yours between commercial lending institutions and these big corporations could find ourselves in a terrible situation, regardless of what happens on the consumer regular residential side of things.

Yep. 

Bisendra Melaram: Yeah. That's some great takeaways. And I think that's the purpose of today's [00:17:00] episode is be vigilant, ask your questions and don't hesitate to seek professional guidance. Okay. And this is more for the other. Professionals in the industry is remember integrity and transparency are the cornerstones of a healthy real estate market, right?

Because that's our bread and butter,. And like Ms. Marcus said, we're our customer focus. We are not focused on our own pocket, right? We're here about the education and helping others build generational wealth or else we wouldn't be here. 

Jason Kleiger: I mean, if even if you think about it. What do we stand to lose?

We stand to lose a lot. If we start, you know, doing certain things to kind of skirt the system or, you know change the numbers here and there, we stand to lose a lot. And all of us do. Why would we do that to ourselves in the future? Why would we do that to our clients? And it makes zero sense. It really 

Bisendra Melaram: does.

The amount of time that you went to school, the amount of time you've been practicing, the same thing with Mr. Marcus, 20 plus years in, right? Myself 20 [00:18:00] years in, you think I'm gonna give up. 20 years of my life because for a few bucks, you gotta be, you gotta be off 

Jason Kleiger: your rocker. All you have is your name and your license.

That's it. And your reputation. And my 

Bisendra Melaram: reputation falls on, on, on the backs of my father, who was a great, a phenomenal realtor, right? There's no way they're going to be like, Oh, well look what his no, no, no, no, no, no. Cause you know how the community is. So 

Jason Marcus: one of the things that like I usually use as an analogy, when it comes down to it, it's like, I can.

renovate my kitchen. I can cut a gazillion corners, but inevitably, that cabinet door is going to fall off. That tile is going to crack. That stove is going to break, that refrigerator is going to leak. It's like there's always tricks to the trade. There's always ways to skirt things. There's always ways to get around it to make your life easier.

[00:19:00] And it could be financially easier. It could be anything, any which way you look at it, you can find ways to make any situation easier on yourself. But we've learned over the course of time, especially in this industry, there's always ways to The recipe is always the same. Integrity, working hard, there's no shortcuts.

So anytime you're sitting there and we're dissecting a subject where we're looking at people intentionally trying to take shortcuts, we know just based on our experience in our industry, and even across section from talking to other people in other industries, you start seeing the people that are looking to cut.

Angles of things to try to do things where things are falling out of the sky. We know the end result. 99 percent of the time is going to end badly. We just know that it holds true. There's a karma to it. 

Jason Kleiger: It definitely I agree to that. I mean, [00:20:00] there are so many times when, you know, in contracts you, you have this thing called a mortgage contingency clause.

A lot of times people will not be able to get their mortgage commitment whether it's their income or their credit, whatever it is. And they're able to get out of the contract. Sometimes you have people who have unscrupulous loan officers who will be like, yeah, yeah, I'll give you a commitment. And the next thing you know, they get it to underwriting and underwriting says, no, no, no, no, no.

We're not going to give you a commitment because look at this. This is horrible. Okay. And, you know, at first you think, Oh, my loan officer is great. He gave me a commitment. Look at this. Okay. But then you're locked into that contract. Because your loan officer you couldn't trust. And what happens? Now you got to explain to the seller.

Oh, well, I should get out of this contract. And you know what, they're gonna say no, no, no, no, no, I'm going to keep you [00:21:00] down payment. And why does that happen? Because of people you can't trust. And the people here with me, Mr. Marcus, Miss Sandra, you know, you can trust because they're not going to put you in that situation.

And too many times I've seen that happen, and believe it or not, that happens a lot, okay? Loan officers, sometimes they get a little too rambunctious. They want to give you the commitment. They want to lock you in. They want to do this. They want to do that. But you know what? It only hurts you. And that's why you need to really go with someone who is going to give you not only the best rate, the best service.

You need to go with someone that you trust. So 

Bisendra Melaram: how would you recommend someone? Because I, I see that people do not know what they don't know. And I tell people all the time, ask a family member, friend, who's recently, recently been in a real estate transaction, ask them for recommendations on who their lender was.

Do independent research, right? Interview your [00:22:00] lender, interview your agent. I tell people that all the time, at least meet with three people and let one of them be me. And then we'll see, right? Same thing with attorneys. Here's the attorneys. This is my preferred lender because we've done countless transactions together, but you may not be a good fit The same thing I tell seller clients.

We may not be a good fit. Let's meet and let's see Yeah, yeah, you know so people should be interviewing from my perspective people should be interviewing asking for recommendations doing independent research What about you? What do you think you can add to that as far as a good tidbit of information for them to?How do they check 

Jason Marcus: to see I think you always need to have a vested interest in it. So just to parlay off what you were just talking about, it's if I get recommended by a realtor, beside the fact that I have ethics and I'm going to do best by the client, like, let's just say for argument's sake, that wouldn't be the case.

I have now an extra level involved in this. [00:23:00] Because not only do I need to do what's best in the client's interest to keep them happy. Which I'm going to do anyway, but now there's an extra layer in it because now I have a referral partner who referred me who I have to make sure. Also. As a definite an extra layer to them, so it's like, not only do I have to make sure that the clients are raving fan.

I also want to continue to do business with my referral partner. So my point in telling the audience. This is. There's value in getting the recommendation because when it comes down to it, you want multiple layers. Of people inside this transaction. Are going to be appeased by the work of somebody like myself or J.

So, or obviously, even Bisendra, like, depending on how that referral key. So, when push comes to shove, when you have more accountable people, and there's more [00:24:00] accountability, there's also more. that we ourselves on our side are concerned about. So it's like, I'm going to go the extra mile regardless, but I also need to keep my referral partners.

Even if I lie to myself and say that there's not something to that, there's something 

Bisendra Melaram: to that. There's absolutely something to that. I'm more worried about that relationship, to be honest. Seriously, if I got a, when you guys send me referrals, I work that referral as if it was my own family member, because in theory it is, it came from a family member.

I want to make sure they get the same service that I would come to expect if I sent one of you guys a referral and I, and I'm never worried, you know, I'm never worried. No, never, 

Jason Kleiger: you know, if, if I send a client to someone, okay. You know, my name is behind that referral, and if I send them to the wrong person, okay, let's send, [00:25:00] you know, I send them to Joe Q, whomever, public, okay, Joe Q public, okay.

And all of a sudden, that person bundles it up, okay. I referred that person. That's why I don't like referring people very often, because I need to know that that person is going to take care of my client. And I know that Mr. Marcus and Bisendra would take care of my client and that's why certain situations, you know, there is no question 

Bisendra Melaram: about it.

So you guys want to open this up for anyone that is looking for a referral or a reference for someone of our caliber, whether it's legal, mortgage, real estate, open it up. If anyone has. a need, we would send them a recommendation. Of course. Depending on where their locale is. It's up to you if you guys want to open it up.

I'm definitely open to 

Jason Marcus: doing it. Yeah, I can help. Like, the way we all work is, the money [00:26:00] that we make is a byproduct of how we just try to help people. So at the end of the day, if there's somebody that can perform any sort of action for somebody that we can trust that's Somebody that we know is gonna be a good fit with that particular referral.

I'm always into it, but the inverse also applies. I will never give you guys a referral of somebody in any sector of anything. That's not somebody I would use myself. Mm-Hmm. . Mm-Hmm. 

Jason Kleiger: ever. Exactly. 

Bisendra Melaram: Yeah. I don't give referrals for craftsmen. 'cause it's dangerous. It's, I have no idea because that's. I don't, I love craftsmen personally, you know, but the thing is it's hit or miss.

There's so many variables that play that I cannot control and even they can't control. I'll give them the benefit of it. You know, the,tiler that does my tiles in my master on suite may not do the same job for you. You know, so I'm, people get [00:27:00] very distraught. They tell me all the time, they said, but.

You, you see all these people regularly and I said, I do, but I will not put my professional reputation behind an individual that I cannot, you know, fit. I cannot just basically say they're going to do a phenomenal job for you because they did that for me. I mean, professionally, it's a 

Jason Kleiger: different story.

Exactly. If I know someone that's not going to do a hundred percent of the job that they're going to do. No, sorry. I'm not going to put my name behind that. And 

Jason Marcus: it's usually, unfortunately, like I've been down this road so many times and I, it, it really hurts because as we know, there's a, most of it's like, there's no upside on our side in this thing.

There's not. Like there's generally only the downside. And even though I want to get. Particular friends of mine more business. I started to learn it's almost like giving your political opinion on Facebook. You're just not going to win guys. You can stop doing that. You're never going to win. You're not going to change anybody's [00:28:00] opinion.

Like just stop doing that. And I kind of thank the world, like that most. People at least in my network of people on the good old Facebook have stopped doing that. I just need to get the guys that think earth is flat to stop doing that and then after that I feel like I have the most perfect social network ever created.

No chemtrails. 

Bisendra Melaram: They were talking about cloud seeding earlier. Sorry, if you're into that, 

Jason Kleiger: we're 

Jason Marcus: okay, that's fine. Yeah, it's all good. Oh and just my proof to you flat earths when there's a lunar eclipse, the shadow of the Earth shows that it's round. And every other planet's also round. I'm just saying.

Or just dig a hole. And then run. 

Bisendra Melaram: Okay, okay, I'm stopping right now. So that's all for today, castle dwellers. If you have any questions about the Trump case or real estate ethics, don't call us. Don't email us, but don't hesitate to reach out if you need a referral or you have any questions. And remember, keep your keys close and your deals transparent.

Thanks [00:29:00] guys. See you guys.