Episode 29: Avoid Foreclosure & Remain a Homeowner – Michael Russell Shares Hope and Help for Boston Families

00:00:00:00 - 00:00:16:03
Nate Carver
Hey, you've reached your favorite mortgage guy, Nate Carver. And today we're in Dartmouth, Massachusetts, talking to Mike Russell. If you're looking for someone to buy, or help you buy or sell a home, I think you're going to enjoy this conversation.

00:00:16:03 - 00:00:36:23
Nate Carver
Hey, I'm Nate Carver and welcome to Between Two Doors.

00:00:36:23 - 00:00:38:14
Nate Carver
Hey, Mike. How are you doing, sir?

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Michael Russell
I'm doing great. How are you?

00:00:40:12 - 00:00:53:15
Nate Carver
I'm doing good. It's, It's actually unseasonably warm, this time of year for here. It's in February. I'm out of North Dallas. And, of course, you're up in Massachusetts. So how's the weather there?

00:00:53:17 - 00:01:06:12
Michael Russell
It's cold and, nasty, you know. Yeah, but there is one. Plus, I'm not a Cowboys fan that. You know what I mean? So there's not, you know, now I'm stuck with being a Patriots fan, you know.

00:01:06:15 - 00:01:22:11
Nate Carver
Right. So we we wore our Cowboys jerseys to football, in the playoff games. House party. Yeah. And everybody like oh you're Cowboys fan I was like no, this was my ranking for the one star oh one star ranking.

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Michael Russell
Sounds about right.

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Nate Carver
Yeah, yeah. So this maybe next year. Maybe next.

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Michael Russell
Year. That's it man.

00:01:29:00 - 00:01:43:15
Nate Carver
That's a slowly so we count on every year. Hey. So so tell me, how long have you been, in the real estate world? And then I'd love to hear a little bit of your, you know, how you got into it and what you're doing currently.

00:01:43:15 - 00:02:02:04
Michael Russell
Where I'm, Well, geez, I've been in real estate since 1996. It's really kind of the first job I ever had. So I've been doing this a long time. And really, I mean, I got into it, really the path of least resistance. I had no intent. I've yet to meet someone who wanted to be in real estate when they grew up.

00:02:02:04 - 00:02:21:02
Michael Russell
You know, it's rare. It's usually a fallback career or something like that, but, it. My father bought a century 21 franchise when I was just out of high school, and, I was kind of trying to decide what I was going to do with my life. And that just opened up, you know, really the path of least resistance for me.

00:02:21:04 - 00:02:42:09
Michael Russell
You know, that's kind of how I got into it when. Excuse me, I you know, it's in the family business for a long time. And my father got out and wait and I kind of held every position there is to hold throughout a real estate company, over the years. And, so I've been I've been doing this for a long time, you know, real estate has given me everything I ever needed.

00:02:42:09 - 00:02:47:19
Michael Russell
And damn near everything I ever wanted. Yeah, yeah, yeah, absolutely.

00:02:47:21 - 00:02:51:23
Nate Carver
I don't know, maybe on the lending side that this is what they set their goal to.

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Michael Russell
Right. Same deal. Right. It's just it's.

00:02:54:18 - 00:03:20:15
Nate Carver
I fell into it and so. Yeah. Yeah. Right. Loved it. So in over 20 years now I'm sure you've got some, some great stories or experiences that first time homebuyers might benefit from or, you know, people looking to buy their next home. I'd love to hear at least one, maybe a funny story or something crazy that might have happened.

00:03:20:17 - 00:03:23:17
Nate Carver
On on your way to closing. And so.

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Michael Russell
Yeah, sure. It's, you know, all those all those war stories are, you know, they're I've probably witnessed, you know, 10,000 of them over the course of time. And, it's it now is is when it's so important, you know, more so than any time in my career, to just kind of recognize how unaffordable things are today.

00:03:45:04 - 00:04:07:10
Michael Russell
And so the slightest misstep on the way to a closing as a buyer, will absolutely mean the difference between you buying the home and not and those mishaps, you know, misuse of credit, misuse of funds, you know, you're under a microscope when you're getting preapproved, especially as a first time homebuyer with some government backed assisted loan or insured loan.

00:04:07:12 - 00:04:41:18
Michael Russell
You know, they're they're looking at it. It's it almost feels like a forensic audit trying to get a loan nowadays. And so the slightest misstep, the purchasing of furniture, because, you know, you just had to have this couch because it was perfect in your new living room or whatever it may be. You know, the the stories I've certainly seen, I've seen people buy a new car on their way to a closing and, and not, you know, and those are few and far between, but just the slightest little misstep, whether it's a deposit into your account or a large withdrawal out of your account or anything like that, can really mean

00:04:41:18 - 00:05:01:23
Michael Russell
the difference between you securing that home and not, you know, it's never been more important. You know, it. The affordability index is at 48 right now, you know, so the average household earns 48% of what is required in order to buy the average home in America. And that's the lowest it's been since almost before I was born, the late 70s, early 80s.

00:05:01:23 - 00:05:17:14
Michael Russell
And we haven't seen it like that. Really in my, in my adult lifetime, for sure. That makes for a tough go for people. It makes for a really tough go for people right now. And there's, so there's a lot of people in the market are kind of frozen.

00:05:17:16 - 00:05:18:03
Nate Carver
Right.

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Michael Russell
And not able to afford a home. It's challenging times for sure, for home buyers.

00:05:23:11 - 00:05:58:10
Nate Carver
Yeah. I on the lending side of that we making sure the conversations we have with with people that are looking to get mortgage ready, making sure that, you know, we uncover all of their income, you know, they think two sure. That's easy, but they may not, you know, maybe they get commissions or bonuses or, you know, there's other you know, they may have other income streams like dividends, things that they don't necessarily think of that might, might qualify in boosting their income.

00:05:58:12 - 00:06:22:18
Nate Carver
You know, Social Security, for example, it's nontaxable. So the nontaxable part of their Social Security, a lender can plus up 25%. So there's those kinds of things. I wouldn't expect a home buyer to know that in so they get this, they get a great team, get a great real estate agent, get a great lender, and they'll navigate this for you.

00:06:22:20 - 00:06:44:02
Nate Carver
You know, because, you know, you get the closing and you discover, you know, you their income could be less. We want to avoid all that on the front end when we actually get them qualified and do our due diligence up front so that they're actually looking at homes that they can afford. And have the assurance that they've got a good, qualified loan put together for them.

00:06:44:04 - 00:07:08:04
Nate Carver
I've seen those nightmares, too. And, it's painful. And, you know, get, you know, I guess my company were able to save about we've seen those if those kind of loans been brought to us, and we're saving about 83% of those loans that have fallen out at other lenders. Because they're not doing their due diligence.

00:07:08:04 - 00:07:31:19
Nate Carver
And then, you know, just having a team that goes, okay, what do we got to do to save this loan? That's out there. It's, I feel I feel for borrowers and and in wanting to respect the real estate agents relationship with them and knowing how difficult it is to find a lender or find a lead or find something that's willing to buy a home, try and protect that relationship.

00:07:31:19 - 00:07:45:16
Nate Carver
So, getting and correctly on the front end is more, so you're doing so well, how many tell me on your you you've got a team right that that's working with you and.

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Michael Russell
Yeah. And makes sense with 65 people. You know.

00:07:50:04 - 00:07:58:19
Nate Carver
Oh wow. That's awesome. And is a mix of real estate agents and assistants and, and you're all.

00:07:58:21 - 00:08:12:14
Michael Russell
Yeah, it's a combination. You know, there's some payroll employees, there's some, per transaction stuff like that. You know, there's a lot of salespeople and, you know, like anyone else, we work closely with a team of attorneys and, lenders as well.

00:08:12:16 - 00:08:13:11
Nate Carver
Nice.

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Michael Russell
You know.

00:08:16:14 - 00:08:27:09
Nate Carver
In, what is after 20 years, I'm sure it's changed from when you first got in, but what's your why? Like, what is the thing that drives you?

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Michael Russell
Yeah, sure. Well, it used to be money, you know, it used to be money for, you know, 20 years in my career, it was really my sole focus. Was money. More money. As much as I can possibly get you. And, you know, but I faced a lot of struggle chasing that path, you know, and I really got, I got scalped pretty hard.

00:08:46:09 - 00:09:06:03
Michael Russell
During the downturn in oh, 8 or 9. Yeah. And and that stuff always resonates with me. You know, I witnessed a lot of foreclosures. I witnessed a lot of lockouts where families were literally locked out of their property because the bank was taking it over, and I lost some properties to foreclosure. I ended up filing bankruptcy, both corporate personal.

00:09:06:05 - 00:09:22:00
Michael Russell
And so I went through the wringer. You know, I kind of put my family through the wringer, created a lot of collateral damage that took me, you know, a better part of ten years to kind of remedy. And so all that kind of, you know, personal life experience and professional experience plays a big role in who you become later in life.

00:09:22:00 - 00:09:43:21
Michael Russell
Right? And, so those things always stuck out to me and resonated with me, and I, I, I did a pretty fair job in turning my life around and turning my circumstances around. And so, and that's why I created this nonprofit, which with the sole mission of just helping people remain homeowners, helping people hang on to their home when they're facing the threat of foreclosure.

00:09:43:21 - 00:10:16:09
Michael Russell
And that's, that's what I spend a lot of my time doing is, you know, when I'm finished with you, I'm going to be meeting with a couple that, that are behind on their mortgage and it threat of, foreclosure. And, we're seeking out some assistance options that can keep them in their home. I don't know of a I mean, look, at foreclosure is always a horrible thing, but, man, an awful lot of these people who are at threat of losing their home are sitting in a 2 to 3% fixed rate, long term mortgage.

00:10:16:11 - 00:10:51:14
Michael Russell
And the value of that in America today, I can't even really effectively describe in the spoken word being able to have a 30 year fixed 2.65% mortgage on your property, the cost of replacement housing, both financially and emotionally, is significant today, you know? Right. If you're sitting in a four bedroom, two and a half bath home and your mortgage payments $1,800, and you want to go rent something, you're going to be looking at two bedroom, one bath apartments.

00:10:51:16 - 00:11:05:18
Michael Russell
That's three. Yeah. For the same equal value per month. And so I, my team and I, do everything we can to keep people, homeowners. Foreclosure doesn't help anybody, you know?

00:11:05:22 - 00:11:19:19
Nate Carver
No. It doesn't. Are you getting, in front of them before they have missed payments, or is it, are you being are you able to talk to them? Pull that off. And they're.

00:11:19:21 - 00:11:39:00
Michael Russell
Both. Yeah. You know, it's, it's, the human conditions at play here. Right? So, yeah, we, we as human beings, when we think there might be a problem, we don't usually ask for help. It's after there's a problem. Right. So that's really the reality. You know, it's like, yeah, hey, things aren't looking good. I think I'm going to be in trouble in six months.

00:11:39:00 - 00:12:04:04
Michael Russell
Is not a common conversation. Right? It's more of, there's been a notice filed and, and, you know, it's not a fair fight. Big banks against homeowners. It's not a fair fight. And so we try to level the playing field. We try to make it a fair fight, by bringing experience, understanding, and, you know, just an ability to help them craft effective applications for assistance.

00:12:04:04 - 00:12:24:21
Michael Russell
You know, every bank in America wants to work with their homeowner. They don't want to foreclose. They don't want to send people packing. They don't want to buy the asset back. They don't want to do any of those things. They want to work with the original debtor. They absolutely do. And, but you know the deal, the more time that goes by, the less options there are.

00:12:24:23 - 00:12:27:01
Nate Carver
Yeah.

00:12:27:03 - 00:12:30:13
Michael Russell
That's true. Yeah. For sure.

00:12:30:15 - 00:12:47:13
Nate Carver
I've got one right now. It's, it's in a, it's going to it's going to be a short sale and I, I just know as a lender I was like, why didn't you tell me six months ago when you were, you know, but that's that's neither here nor there. That's, that doesn't help them in the, in the, in the here now.

00:12:47:13 - 00:12:48:03
Nate Carver
And so.

00:12:48:09 - 00:13:16:17
Michael Russell
So I'm surprised to hear that just short sales are so few and far between today. Yeah. Because of the, the insane appreciation in property values over the last five years. Yeah. You know, in a 40 plus percent appreciation rate in the last five years has really put people in a place I've never seen before, which is and of course, I'm not recommending it, but you can literally not pay your mortgage for two years.

00:13:16:17 - 00:13:51:14
Michael Russell
Sell your house and get a bag at the finish line. And that's never happened before. Usually when you fall behind on your mortgage, you are underwater and you can't get the property for the full payoff amount. And so you would be forced into a short sale or something there, just so few and far between now. I mean, there are some banks, you know, that take years and years and years, and there are some homeowners who, you know, one party will file bankruptcy, they'll wait three years, the other person on title will file bankruptcy, and they drag it out and drag it out for many, many years, where the payoff becomes higher and higher.

00:13:51:16 - 00:14:15:03
Michael Russell
But I don't see a lot of that. I see a lot of people who I see a lot of people who bought in 2020, 2021, 2022 who are already falling into a problem, on a fixed, low interest rate, long term mortgage. And, and so that's honestly those are most of the people that we're, that we're dealing with and helping are you know, they've only been homeowners for five years.

00:14:15:03 - 00:14:17:10
Michael Russell
A lot of first time buyers.

00:14:17:12 - 00:14:24:22
Nate Carver
So is it are you seeing that it's their other debt that's got their debt to income ratios kind of askew or.

00:14:24:24 - 00:15:09:21
Michael Russell
Well, I think, it all starts with the very real reality that I believe that when you are in threat of foreclosure, you have other very large problems in your life typically. And, and, you know, health, right? Substance abuse, divorce, you know, you name it, there's, there's a litany of different things that go wrong in people's lives where those problems are so big and all encompassing that it actually makes the foreclosure issue feel smaller, incomplete, and being able to shake the rest of your life and your happenings off and compartmentalize and given a focus into saving your home from foreclosure is where most people, they just don't have that capacity.

00:15:09:21 - 00:15:30:17
Michael Russell
None of you know, none of us do. And when it's crisis all around us, it's very challenging to zero in on one thing with a tremendously focused intent. And so one problem. Right. And so that's that's really the vast majority of what we're dealing with here is, there's of course a lot of, there's, there's death and people are inheriting properties that are encumbered.

00:15:30:19 - 00:15:54:16
Michael Russell
And, and then they, they weren't used to keeping up that payments. So they're not or whatever the reason is, it's an additional home. It's, you know, so it's, there's a, there's a waterfall of, of reasoning behind how this happens. And, and I understand a lot of it, you know, because I've been there, I get it, I understand what it's like to be up against it.

00:15:54:18 - 00:16:18:15
Michael Russell
And, but I also made a lot of the wrong decisions. You know, when I ran into financial crisis, I made a lot of bad decisions that led to the financial crisis. And then once the crisis showed itself, I made even worse decisions, kind of doubling down on my. You know, despair, if you will, where, you know, allowing a foreclosure was,

00:16:18:17 - 00:16:44:15
Michael Russell
I should have never let that happen. There were ways to stop that. Filing bankruptcy was another thing that I, as you know, in the lending world, it's a public event. It's a public record on your credit report. You're not shaking it. You better just sit down and wait. Hurry up and key for you to be bankable in the eyes of traditional lending again, you know, and that that period of time really extended my misery, if you will.

00:16:44:17 - 00:17:04:06
Michael Russell
It's like, all right, well, now I'm now I'm on bankable now. And it just it becomes another excuse not to get things right or whatever. And so, so I understand a lot about what's going on with people out there who are dealing with this. And that's why it's so important to me, is I think that the very, one of the very worst things you can allow to happen as a homeowner is a foreclosure.

00:17:04:06 - 00:17:23:11
Michael Russell
You just don't want the worst thing. You don't want that to happen. There are other ways, to try to avoid foreclosure. And 99% of the people we work with avoid foreclosure in one way or another. About 80% of them are able to qualify for some assistance and and get back in the good graces with the bank.

00:17:23:13 - 00:17:59:17
Michael Russell
The other maybe 2015 to 20% of the people, they are forced into a place where the bank won't work with them. And so they they must move on from the asset. But by keeping lines of communication open with the lender, you gain a little control over the timeline of events. Yeah. You know, is where you don't have to feel pressure to sell your property for cash to this guy for cheaper than it's really worth, and do these things and make these urgent, rash decisions when if you just kind of keep the lines of communication open with the bank, keep them apprized each step of the way.

00:17:59:17 - 00:18:25:10
Michael Russell
If you are not approved for assistance, okay, this is my plan. Here's the proof that I'm doing it. Here's a bona fide executed offer. Here's here's what I'm doing. And the bank will work with the consumer oftentimes kind of pushing that auction date out if there was one scheduled in order to allow them to satisfy conveyance so they can pay off the mortgage in full.

00:18:25:12 - 00:18:28:21
Nate Carver
Well, what is the name of your nonprofit?

00:18:28:23 - 00:18:34:17
Michael Russell
It's called hope for hardship. Hope the number for hardship.

00:18:34:19 - 00:18:42:06
Nate Carver
I love it now. Is that do you does that just service? Massachusetts only or do you go, oh, we'll.

00:18:42:06 - 00:18:44:10
Michael Russell
Do it anywhere. Yeah. And he looks like.

00:18:44:11 - 00:18:45:11
Nate Carver
You know.

00:18:45:13 - 00:19:08:16
Michael Russell
Those two truths are absolute, right? No bank in America wants to foreclose. No homeowner in America wants to get foreclosed on. Right. Wow. Yeah. Being able to give this back freely is, tremendously important to me and important to the team that I've kind of built here. That, kind of been working off of me through osmosis and seeing what I'm doing and why it's important to me and why it's important to everybody.

00:19:08:18 - 00:19:39:04
Michael Russell
And so, yeah, we've got a full staff that processes, these assistance application communicates with the bank on a regular basis because you know banks better than anybody. You know, you you send them something and three days later they say, no, you didn't, you know, and sometimes that happens. And so we we just stay in touch and we make sure that they get the supporting documentation, the completed application, so we can get that foreclosure action paused so the homeowner can breathe a little bit while the bank is making their decision, because it's really reverse underwriting.

00:19:39:04 - 00:20:05:10
Michael Russell
When you go to apply for a mortgage, you're going through underwriting. When you're applying for assistance from your mortgage, you are going back to underwriting where the bank can kind of determine, are you a viable bet if we if we help you with the arrears, age, the past due amount, you know, that amount that's in the top right of the balance sheet that the mortgage statement that they get that just feels so like I could never, you know, 14,000 might as well be 14 million to a lot of people.

00:20:05:10 - 00:20:24:16
Michael Russell
And so they they can't do anything about it. If we can get the bank to help them with the arrears, with the fair bargain. Okay. In 60 days, we need you to resume your normal payments and we'll keep your mortgage intact. That's a win for everybody. It's a win for the neighborhood. It's a win for the family. Of course it's a win for us.

00:20:24:18 - 00:20:44:17
Michael Russell
And and you know what? It and it and it's paying it forward. It's the very best and paying it forward. You you help people freely to remain in their homes and later on in life, if they need our services in real estate, we can count on them, to, to come to us. And that's, that's really what it is, you know, it's it's, paying it forward.

00:20:44:19 - 00:21:14:09
Nate Carver
Yeah. Oh, I love it. All right, that is that is wonderful. I don't wish a foreclosure on anybody. And, knowing that you're you're nationwide. I, I will definitely be sending people in your direction whenever that is. Makes it. Makes it when is made known to me. And, Golly, that is fantastic. I don't think that many people know.

00:21:14:15 - 00:21:28:03
Nate Carver
Well, I don't expect them to know, like, what their course of action is, is is it, you know, if they suddenly they find themselves facing a foreclosure or, This is fantastic. I'm glad I've met you. Yeah.

00:21:28:05 - 00:21:42:10
Michael Russell
Me too. And I'm grateful. Grateful for the opportunity. You know, it's, It's. I've yet to find I've yet to find another nonprofit in the country that does this. And, But I'm not interested in being the only one.

00:21:42:12 - 00:21:42:24
Nate Carver
You know.

00:21:43:02 - 00:22:11:17
Michael Russell
A lot of people in this world, in this country, with the experience, to help people in this situation. I know there are. And. Yeah. And it's, you know, it's really it's a whole bunch of useless real estate knowledge that's been in my head for 30 years or whatever, growing in my mind. And, this just felt like the best thing to do with it is to help, remain homeowners, you know, like, that's I mean, in this business, we've been in this business forever.

00:22:11:19 - 00:22:33:21
Michael Russell
We we understand how excited people are when they purchase a home, whether it's their first or their leveling up or whatever it is downsizing. There's excitement, there's jubilation. But not all those stories end well. Those stories end with struggle. And that's where we like to pick up the pieces, you know, there's no shame and struggle.

00:22:33:21 - 00:22:55:14
Michael Russell
And that's the thing is, people feel ashamed. People are, can be standoffish and, untrusting and embarrassed. But there's no shame in struggle, man. We all go through struggle in life. We do. And fallen behind on your mortgage payment is, not a not a reason to feel embarrassed. You know, it does. You're not unique.

00:22:55:15 - 00:23:00:22
Michael Russell
That can happen to anyone, you know, and I'm certainly living proof of that. You know, I've been there.

00:23:00:24 - 00:23:07:00
Nate Carver
Yeah. Wow. Well, thank you, Mike. Now, let me ask this.

00:23:07:02 - 00:23:08:14
Michael Russell
Yeah.

00:23:08:16 - 00:23:20:21
Nate Carver
For you, for anybody looking to do the buying or selling of a home, what's best way for them to reach out for you? To you? Yeah. In Massachusetts. In Massachusetts?

00:23:20:23 - 00:23:42:08
Michael Russell
Yeah, sure. They can call us, 55085019214 again. That's my direct line. You can call and, you can talk anything you want. If you have real estate needs or if you're in trouble and you need help. Please call. We'd be honored to, just hear your story. That's really where it starts, right? Tell me. Tell me a story.

00:23:42:10 - 00:23:44:21
Michael Russell
Tell me what's going on with you.

00:23:44:23 - 00:23:48:09
Nate Carver
And. And for the nonprofit. Same number. Yeah.

00:23:48:12 - 00:24:06:09
Michael Russell
Yeah. Okay. Number. Yeah, yeah. And our website is hope the number four hardship.org. There you go. Yeah. You can go learn a little bit about our story and, and, yeah, figure out, if there's something we can do to help you. We'd be honored to try.

00:24:06:11 - 00:24:27:12
Nate Carver
All right. Thank you. Mike. Well, folks, there it went quick. Our conversation. I will I will put the links down below for anybody that's listening to this. I'll have that all tied to this conversation. And, if you're in the Boston area and looking to buy or sell a home, please reach out to Mike, to Mike.

00:24:27:12 - 00:24:37:21
Nate Carver
And then if you, find yourself needing to talk to somebody to avoid a foreclosure, please give me a call. So thank you for being my guest today.

00:24:37:23 - 00:24:41:10
Michael Russell
Thank you very much. It's good to meet you. And, have a great week.

00:24:50:14 - 00:24:58:16
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