How Did You Not See How Unbelievably Stupid This Was?

[Music] brought to you by the Every Dollar app. Start budgeting for free today. >> I'm a young veteran and I joined the military right out of out of high school. I did my four years, got my degree. Um, and two years ago at the age of 22, I moved my wife and kid to Florida uh to start a military sponsored internship program at one of their approved companies. Um, at the end of that internship, the owner of the company promised me $180,000 salary uh if I bought his house. Uh, that promise was put into an offer letter and an employment contract. And that offer letter solely qualified me for a no money down VA jumbo loan. So, I proceeded to buy his house for uh $830,000 with an $845,000 mortgage at a $6.75% interest rate and a nearly $7,000 a month uh payment. Uh immediately after I closed, he cut my pay, making that offer letter fraudulent. And over the course of the past two years, my pay's uh progressively been cut. Uh as he ran the company to the ground. Um and as of two weeks ago, I'm completely unemployed. I'm owed over 150,000 in wages. Um I've since vacated the house, got a rental house for my wife and kids. I started a new job tomorrow. Um but I'm being forced into a short sale and we'll be about $200,000 underwater. Um so my question is, what would you do if you were me? and what are my options to minimize the damage to my credit and my future home buying privileges? >> So, at what point in this process and how many times in this process did your heart try to tell your head how stupid this was? >> Um, I I could tell you a long story of how I was, you know, convinced it was very legit company. I mean, I interviewed today. >> I mean, you never stopped and looked at this and said, "This is a bad idea." >> Oh, no. I mean, the company had like 50. >> No, I mean, you I'm not talking about the company. The company The company doesn't matter. >> The whole story you told me, if the company is completely >> on the up and up, if they're really financially strong, and if they followed through on everything they said, this is still unbelievably stupid. >> Yeah, I agree. Now looking back, I mean, at the time I was 22 years old and the guy seemed like he was made of money. I thought I was doing him a favor uh because he found out he's having twins and he want his wife he said his wife wanted a bigger house. Um but yeah, I agreed. Looking back now, I was I was completely scammed. I never should have uh got in this situation. >> You ever heard the phrase, "If something sounds too good to be true, it is." >> Yeah, that's this is it. >> Yeah, this is it. You're like the walking definition. >> Yeah. >> Oh my gosh, honey. I'm so sorry. what hell you have been through. >> Thank you for your service to the country and you deserve to be treated better. I'm so sorry. >> Um >> yeah, he's a veteran, too, so he he's taken advantage of veterans and >> that's not unusual, as you know. >> Um >> yeah, >> there's veterans outside the gate of every single base for the next two miles. Just as soon as you leave the gate on each side of the road for the next two miles is stupid. Like every stupid human trick is right outside the gate of every military base and most of them are run by veterans screwing over current active duty people. So it's not unusual at all. It's I wish I could say it was different but we know too much about your world. All right. So >> yeah. >> Why did you move out? >> Um because so the the mortgage is going to go over due starting October 1st. Yeah. So, >> um, and I know my credit's going to get ruined, so I won't be able to. >> Why did you move out? >> So, I could start the short sale process or whatever as soon as possible. >> You can start short sale pro process while you're living in it. >> Yeah, that's true. I don't know. I just wanted to get it over with and just move on with my life as soon as possible, I guess. >> Okay. It's interesting. All right. So, a short sale is where the house brings less than the mortgage. And if it is a short sale, remember this phrase because you're going to have trouble getting it with your Veterans Administration. And it's the only way you want to do it. Don't do it if you don't get this phrase. And I doubt you're going to get it, but you need to get this phrase without recourse. >> Okay. So, a short sale is the lender looks at the situation and says, "My borrower is a 22y old that doesn't make enough money to pay this bill, and it'll never happen in this century that we're going to get our money. The only money we're going to get is out of this house, and so we're going to accept a $600,000, $800,000 offer, $700,000 offer on this house, and whatever of the mortgage doesn't get paid, we are going to forgive it without resource." That's a without recourse. That's a short sale. The Veterans Administration seldom does a short sale without recourse, but if they have recourse, they're going to sue you for the difference. And it's no better than a foreclosure. >> Who will sue me for the difference? The VA. >> The veterans. Yeah, the VA. And believe me, they will sue you. >> Cuz what the the uh realtors have told me is that the the VA, they just eat the difference on the short sale. And >> if you do it without recourse, they eat the difference. But I let me tell you, I got to tell you, nine out of 10 times they don't. Now, the FHA will eat the difference. Uh, if you talk Fanny May, a conventional loan into doing a loan, doing a short sale, it's typically without recourse. But the VA, oddly enough, ironically enough, which is designed to help veterans, is going to screw you. They're going to hammer you. So, I'm afraid for you right now. Um, but it's the only it's the only route you've got. So, take the realtor at their word. But do not sign this unless it says without recourse. I do not want them chasing you for the difference. If they're going to chase you for the difference, make them foreclose. >> Okay? >> Do not do a deal with them and then them screw you. You've been screwed enough by people you've done deals with. >> So true. >> Yeah. So, whatever the whatever this buyer offers, the VA takes that amount and forgives the rest. Say it with me. Without recourse. You got that phrase. >> Without recourse. >> Yeah. I do not want them coming after you for the difference. And the paperwork needs to say that and you need to freaking read the paperwork. >> Yeah. >> Cuz the VA is supposed to be there for veterans and quite honestly they're not. >> Yeah. >> Yeah. Otherwise, they would have never made this loan. >> Yeah. I mean, I I I I reached out to them. They did an audit into the origination of the loan and they said it's legit that uh the company who's named after the owner has the same last name that I bought his house with an offer letter that he signed to work at his company. That didn't raise any red flags apparently. So >> yeah, but the point is you if you have a 22-year-old who's never made any money in his life and he suddenly is offered $180,000 for a job that is not worth $180,000, somebody ought to look at this and go, "It violates common sense." Cuz son, you were not going to get a $180,000 job anywhere else, were you? >> No, that's that's why I took it. >> No, that's why that's why we knew it was a scam. >> Yeah. Yeah. >> And you shouldn't have taken it. >> And I would recommend an 22-year-old buying his first house, not buying an $860,000 home >> based on a bokea salary amount that you can't get anywhere else in the marketplace. The whole thing was a scam from day one. It was never going to happen from day one. >> Yeah. I mean, I could elaborate to Dr. John about how this guy's like the textbook definition of a narcissist. And >> you know, he had a whole company of a bunch of people convinced until now. >> Sure. >> That everything was legit. None of it was legit. It was all a lie. >> Well, you know, Ethan, what what I what I want to do though, if I'm in your shoes, is not define him. >> I want to ask myself, what was I being that allowed me to step into the bear trap? Yeah. >> Yeah. He we get obviously this guy's a scumball. Okay. But you obviously walked right past several warning flags and you need to learn from those so you never walk past them again. Cuz I did the same thing when I was your age and I went broke and that's what I'm trying to keep you from doing. I don't want you to get there. So if you're going to do something stupid, at least learn from it. And this whole thing was stupid. The whole thing is a nightmarish mess. I'm so sorry, honey. Yeah. without recourse. That's your phrase for the day, my man. Create your free every dollar budget today.