Fraud – Tactics to Avoid Being a Victim, and How to Overcome It

Steven E. Ernest:

My name is Steve Ernest. That's a picture of me a couple of years ago. I'm the direction of litigation and bankruptcy. I guess we don't care about bankruptcy today because it didn't make it to this slide, but I'm the director of both of those things here at Geraci LLP and I went to a conference in Las Vegas about three, four months ago and met Melissa there and it's inescapable.

Anyone would come to this conclusion as did I almost right away that she's a super genius this field. And so I talked to her and said we should do a webinar mostly for selfish reasons because she's so smart. She's going to make me look good just because I'm on this webinar with her. But there's Melissa Palmer and she is the due diligence director at Cardinal Creative Investments. And we're going to talk a little bit today about a subject that I think somewhat sadly is on the upswing. It's on the rise, at least in America, in the lending industry. We're hopeful that we can deliver some information to you and some preventative tips kind of much to our detriment because if we didn't tell you these things, you would need us more and Melissa and I would make more money. But we're going to tell you these things today for free so that you don't have to pay us later.

And I am not really sure how that works for us economically. But nonetheless, we're going to do it because we are do-gooders and that's potentially Melissa's New Year's resolution that she's going to do things for free this year and help people out. So thank you for joining us. Thank you, Melissa for being here. And here we go. Are we ready to get into slide number one? So this is the part where I tell you what we're going to tell you. Any good speech writer does that. We're going to tell you a little bit about the methods that are being employed by these narrative wells. We're going to tell you a little bit about what fraud is. We're going to give you some proactive tips that you can do to avoid becoming the victim of fraud. And then we're going to tell you some reactive things to do other than of course, call Melissa or call me.

Actually, we'll probably work that in. So those will be two of the reactive tips. What to do if you find yourself the victim of fraud. And sadly, a lot of you I think will. And we'll go into why we think that is true and you're going to learn all of those things today. So there's our agenda. The big one. This is why we're doing this since the pandemic kind of since 2017 is when a lot of this started, but since the pandemic, 242 billion, billion with a B has been stolen in America, a lot of that are the pandemic relief checks. There's just a lot of fraud going on. Oh, look at this. I hope you guys can't see that. Maybe you could.

There was 242 billion stolen since the beginning of the pandemic and a lot of new fraud channels have opened $242 billion. That's 50% of Elon Musk's net worth. Think of it that way. 50 Cents of every dollar that he has wasn't directly from him. Thankfully for him it was spread around to all the rest of us. A hundred thousand new fraud channels. They've for years and years, been in India and Africa. They are now in America too. And we're going to talk a little bit about those. Probably everybody on this webinar has received one of those emails that says, hi, I'm the deposed prince of some country in Africa that you've never heard of and I need your banking information because I have $400 million and I'm going to give you 10% of it if you can give me your banking information. I'm hopeful that none of you have ever fallen for that one.

But that's sort of the genesis fraud. The old school fraud, those grew up a little bit where you would get an email from one of your coworkers from a subtly different email address. Your boss's secretary. Well, here's the story. My first story of the day, I was a new lawyer here at Geraci and my boss, Anthony Geraci, has an executive assistant who's tremendous Sylvia, and she did not send this email to me, but it came from her email account. I'd been here about a week and a half and it said, Hey Steve, I need you to go get some Visa gift cards. I'm busy in a meeting and go get those and email me back when you got. And I thought, that's a really weird thing for her to be asking a 25 year lawyer to do, but maybe that's the way it goes around here.

Maybe I ought to do that. I don't really know. And I was walking through the office and I saw Sylvia sitting in her office not in a meeting. And so I say, hi, remember me? I'm the new guy and why do you want me to go get visa gift cards for you? And she looked at me like I had two heads. I have no idea what you're talking about. So I didn't do it and that was good. But that's sort of another casual mind runway that people commit fraud is you go and you get these gift cards and then you tell 'em what the numbers are on the back and the money disappears to someone in India and there you go, 1 million new fraudsters. That's a lot of folks who are sitting in their houses committing fraud. Like I said, a lot of 'em in India, a lot of 'em in Africa, plenty of 'em in the good old USA, they're just turkeys committing fraud worldwide now, which is kind of unfortunate and sad for us as a people in a society, but that's the world we're living in. So we're lucky to have people like Melissa who can help us avoid the perils that befall that kind of a thing.

Melissa Palmer:

That fraud scheme you just described experiencing is something that Target and CVS employees have started to become trained on to try to prevent the elderly from going in and purchasing all of these gift cards because a lot of people fall victim to it.

Steven E. Ernest:

It happens a lot. So the pandemic unleashed just a lot of new fraud. There were a lot of people at home not working sitting on their computers. There were a lot of people at home not working, getting free money from the government and other places and defrauding the government from it. I'm sure most of us have heard the stories on the news where prison inmates are getting unemployment checks and it's things like that. So there's just a world of new ways to get or to espouse your fraud scheme if that's what you want to do. Here's a little tutorial for you to become a fraudster. That's what you want to do. So voice clones, it's not just the email from Sylvia that you get anymore. It's not the email from the deposed prints in Africa. It's a voice clone. You get a phone call and it sounds exactly like your wife or it sounds exactly like your mom or somebody like that, and they're telling you that they need you.

They've been kidnapped or they need you to give them your bank information. They need to do something like that. So if mom is not someone who would ordinarily call and ask you for your visa number or to give her your banking information, probably say, mom, you know what I'm going to do? I'm going to hang up this call and I'm going to call you right back. And that's a way to protect yourself that way. But voice clones, they work and they sound exactly the same. Fake documents, pay stub templates. Any one of you can go on the internet right now and Google fake pay stub templates and you'll find so many of 'em and they're almost the flaws are undetectable to the naked eye. You almost can't even tell. So when people are submitting credit applications, when they're trying to demonstrate how much money they have and they send you a paycheck that looks exactly like yours, there's a chance that it's fraudulent.

Fake checks and check frauds. There's another one. There's been a 300% since 2017 increase in postal employee robbery. What the heck does that mean? Well, when your mail carrier is going to your house, he's just got his truck and he's putting mail into your mailbox, they can steal your mail out of your mailbox. Glenn Campbell wrote a song about that in the 1970s that's been around forever. Robbing the actual mailman is a different deal though because he has a special key that opens those large mailboxes in apartment buildings and in dorms and places like that. And so the guys are not trying to rob the actual postman. They just want that key. And when they get that key, strangely, it opens just about every mailbox in the county. That's the thing that they want. Fishing. We already talked about that one a little bit. So I am suspicious that many of you have used chat GPT.

I think that it's been a big story over the past eight months or so. Chaos, GPT is the fraud version of chat GPT. That is a real thing. I didn't make that up. That's a real thing. It's part of what they call the dark web, dark web. There it is. Item two, it's on here. Two, identity theft, synthetic and actual. We're going to talk about those a little bit more in depth later. The synthetic is the fake call from your mom that we talked about earlier. The actual identity theft is someone pretending to be someone else and they hoodwink you into believing that they're someone else. And we're going to talk about the ways that they do that and how they pull it off. So you would think, well, we will just call the cops and we'll arrest those 1 million people that we were talking about before.

Law enforcement is not the most popular branch of the government in America anymore, and they're to the extent they're doing what they do, they are not enforcing fraud very much. If you think you're going to call your local police department or the FBI and they're going to assign a detective, no matter how big your loan balance is that you've lost, it's somewhat unlikely that you're going to get much traction from law enforcement. Sometimes you will, but I wouldn't count on it. So the best way for you to prevent these problems is to avoid having them. And those are some of the things we're going to talk about today.

Melissa Palmer:

And prevention is definitely the most critical way you can avoid it. I have talked to the attorney, attorney general investigator in Attorney General of Utah and California respectively, and typically they treat it as a victimless crime when it comes to fraud, no matter the egregious amounts. And so I would add that there's really no consequence without your active dedication of time, money, professional resources to this problem, the attorneys, the PIs, the significant energy producing this documentation and records, putting it together all to maybe win a judgment. And just because you win a judgment does not mean you actually get your money back. And so it Is, Hey, hey, hey, hey.

Yeah, sometimes there's no juice to squeeze out of these people. That's the tough part is chasing after the payments can be very productive and costly. So we really, really like Tiff what stomp prevention. And so when it comes to other than fraud, whether it's fraud or not, if at the end of the day you're losing money and the result's the same, it's kind of hard to differentiate. And so ways that you can lose money without specific intentional fraudulent activity can be for two reasons and many more. But two that we'll cover here is natural disasters. So insurance insurers have been pulling out of states like California, Florida, Texas because of the increased climate risks. And so there is beginning in 20 17, 11 different property and casualty insurers pulled out of Texas Last year, I think State Farm and Allstate started no longer writing new policies for California.

And we have seen this trend annually. There are big insurance conferences to determine which states they're going to leave next just because of all of the destabilization in the insurance industry in response to a lot of the increased climate change in natural disasters. So that's one big reason. And then again, with insurance, there are a lot of creative strategies that are now being executed with exit strategies because your tried and true long-term rent and fix and flips are not making the same amount of money that they used to make. So with these new exit strategies, it's still an insurance problem because if the property is not properly insured with its use, you may as well not even have insurance at all. So just understanding that when you are underwriting these types of creative exit strategies, while they are excellent and they are a wonderful way to respond to the changing market, they also come with other factors that we are not used to necessarily considering.

And so umbrella policies, and then so beyond insurance, moving on to a lot of the education that's out here now, both YouTube and paid mentorships offer a lot of additional education that this space is massive and it creates a lot of optimism and confidence around getting into the game for a lot of new investors. And so every investor trying to adjust to this market new and old is trying to cashflow in some ways that are highly dependent on the operator. So that comes to actually having to underwrite the person and their experience when it comes to these. And so with that, HUDs are not sufficient to determine someone's experience. If you have a requirement to have your investors produce a certain number of HUDs, make sure that you understand that they could be double closing and just be wholesalers and not actually manage any assets. So understanding a HUD versus provable experience is really important.

Steven E. Ernest:

Alright, cool. Thank you. So I thought that it would be important to define some terms at this point. Now we're about a third of the way in. So we'll tell you what fraud actually means. As we all learned in our first year of law school fraud is, well, there's criminal fraud and there's civil fraud. So there's probably some overlap in what we're talking about today. But how we define fraud in America is first there has to be a misrepresentation, which is a fancy lawyer way of saying a lie, somebody's lied to you about something. The second one, it has to be a material fact. They've got to lie about something important. If they tell you that they used to work in a grain silo when they were in high school during the underwriting of your loan and they never did, they never even been to Nebraska, well is that important or is it not?

You're going to have to figure out a way that it's important and demonstrate to a judge or jury that it is. It can't just be something casually that I used to date Linda Carter. I didn't. But why is that important to a loan? It has to be a misrepresentation of a material fact. Alright? Elements number three has to be relied upon. So these all kind of go hand in hand if it's an important thing that they've lied to you about. It also has to be something that you relied upon. So if it wasn't something that was important enough to have you make your lending decision, it probably is not going to be actionable, but we'll get to what many of those things are. So then you made this fraudulent loan or you made a loan to a person who had defrauded. You also had to have lost something.

It can't just be, I want to get out of this loan because I don't like associating with liars. Well, that's not going to necessarily be enough. In fact, it's never going to be enough. You're going to have to demonstrate all of these things have happened. So something bad happened to you and whoa, we missed one. And the detriment, it caused you damage as well. So you lost some money, your loan isn't performing anymore, your collateral is only worth half of what you thought it was. Those are some examples. Getting through the relied upon the detriment and the damage is generally not going to be a big hurdle for you. Demonstrating the misrepresentation sometimes is hard, although since a lot of businesses transacted with email, email stays forever. So those are easier to show the materiality of the misrepresentation that they make. Generally speaking, not too hard to show because usually in a lending context they will have told you that they have more money than they really do, that the property has characteristics that it doesn't actually have or that the value is different than what it was.

It's usually one of those three things unless you've got a total straw purchaser, which we're going to talk about in a little while too. But I also feel like I haven't told a story in 10 minutes, so I'm going to introduce a new story. So about 20 years ago when it was probably, well anyway, about 20 years ago there was this television show in America called Joe Millionaire. I don't know if you guys watched it, but I thought it was fascinating because it was really stupid and it said an awful lot about who we are as American television consumers and what we watch. And it was sort of a corollary to these bachelor bachelorette shows where they pick one person and then there's like 19 people who are trying to get that person to marry him. And the way they organize this show is this guy Joe Millionaire, was supposedly a millionaire, ostensibly a millionaire, and ladies who would like to come and marry this super millionaire, he's got 50 million bucks and he's got all this money and wouldn't she like to marry him? And how disgusting is that these people are going on television because they want to marry this guy because he's rich. But people did it. And so there's these 20, I'm going to get to the fraud part. I swear

There's these 20 people who are all vying for the attention of this guy Joe Millionaire. And when we're watching the TV show, we all know that he's broke. He doesn't have any money, he's a complete fraud. This Joe Millionaire guy, we know that when we're watching the show, but they don't. And so they all came to marry this rich guy who actually doesn't have two sticks to rub together. And so the whole show was a fraud, right? That's why I'm telling this story. The producers were defrauding these 20 girls who showed up to marry this rich guy and horribly them on television, right? Because the entire viewing public, 30 million people in America know the truth about Joe, but they don't and they don't find out until the show goes on TV and my God, what do you do? You change your hairstyle and try to look different and change your name or something.

I don't know. Probably not some of the defenses that we're going to go into. But in America there's this notion that fraud pierces everything. If you can show fraud, it smooths over problems that you have in your contract, it smooths over privity that you might be lacking. It smooths over a lot of those things. If you can prove fraud, you are skiing and fresh snow they might say, and you can't waive fraud. There's nothing you can put in a contract that says, even if I'm defrauding you, it doesn't matter. You can't do that if it says that in your contract is unenforceable. You cannot waive a fraud in America, but you can waive fraud in France. So here's where the whole story comes in. Guess where they filmed this Joe Millionaire show that was going on American television in France? It was brilliant. So all of these poor 20 girls who were horribly embarrassed on television in front of a hundred million people in the viewing audience could not sue the producers of a, b, C in this Joe Millionaire show that made hundreds of millions of dollars, probably embarrassing them on television. Here's another fun fact. If you're hosting a corporate event and you want this clown, Joe Millionaire who's a real guy, he drove tractors or something, he's from Orange County. If you want him to come to your corporate event, there are agencies that will arrange to have him come to your Christmas party or your something. It costs like $50,000. So if that's something you're interested in and you can do that. So anyway, that's a quick story about Joe Millionaire. I hope you enjoyed that.

Melissa Palmer:

Yeah, and I'd say Joe Millionaire Was a complete fraud. Well, and even back to your last slide and your information about the fact that sometimes it's hard to demonstrate that misrepresentation, even if you have these email chains, it's really critical that you have within your application process and onboarding process with your clients that there's statements of explanation in writing signed. There's zero fraud tolerance policies that everything you have stated is true and accurate to the best of your knowledge. All sorts of things that you can make them put in writing even though, and the redundancy in the application process can be frustrating to customers, but it's critical for your paper trail when it comes to things going wrong. And so preventative practices are the most effective solutions to being able to do anything on the backend if you have some recourse. And so that's what I wanted to add with that. So misrepresentation can be difficult if you do not have those processes in place. Look

Steven E. Ernest:

At Melissa bringing us back onto topic instead of talking about 20-year-old TV shows. Good job, you're a pro. I knew that.

Melissa Palmer:

And I mean to tie it back in, even if you have that zero fraud policy in writing, you probably don't need it because in America you can't skirt around it just with. But it does make people think very seriously about what they have told you and what they haven't told you and perhaps disclose some changes that could have happened or some inconsistencies information that they would like to clarify upon receiving these extra sets of documents to sign and clarify. So when it comes to back to our other than fraud,

You have a lot of folks that are previous clients that are performing. And then when we think about all these new exit strategies and the ways to actually gather what kind of experience they have to be able to conduct these exit strategies, new exit strategies do not necessarily equally translate to their previous performance. And it's also important to understand their reason for transitioning. Of course, the market is a reason, but maybe digging a little deeper in the preliminary onboarding process, I can't tell you how many times I've found out divorces involved partnerships falling apart, business partnerships. And so while some of this stuff is none of our business when it comes to patterns of behavior, you have people that you can identify early on with liens, judgments, bankruptcies, any sort of fishy smelling experience that they're incapable of articulating. And some of the risk comes with people and changes that they're experiencing in their life because even if they've been a previously performing borrower, the things that could trigger a change in that pattern of behavior would be personal crisis. So whether it's an inexperience with new exit strategies or personal crisis, it's really important to understand, well, it might feel like somebody's personal business divorce and partnerships breaking up and all sorts of just understanding where they are mentally and where they are financially because things change. And when things change is when you see additional failures pile on. And not to be cruel, but I don't know if you scuba dev, but they always tell you do not go after the drowning person because they will drown you. So that is

Steven E. Ernest:

Something to consider when people are in personal crisis.

Melissa Palmer:

Taking out a loan on a luxury flip is probably not a good move So much for the buddy system, huh? You have to wait until they're just about drowning and then you can go give them your oxygen. Otherwise they'll just disconnect all of your tanks. They will drown you with them, okay?

Steven E. Ernest:

I'm not a scuba diver, but if I ever do, I'm not doing it with you.

Melissa Palmer:

No. If you ever do go, you'll get that training. You got to stay awake because everyone drowns, so you got to wait. Then once they relax, you bring 'em back. All

Steven E. Ernest:

Right, inexperience, are we done with this one or is there more?

Melissa Palmer:

Yeah, We can go on.

Steven E. Ernest:

Alright, good enough.

Steven E. Ernest:

Money and alright,

Melissa Palmer:

What drown me.

Steven E. Ernest:

Add that to the list of reasons not to scuba dive. All right, so my anticipation is most of you all in the viewing audience today are mortgage lenders. There's all kinds of fraud for sure. There's marriage fraud, Joe Millionaire, we talked about him, but we're going to talk about mortgage fraud, we're going to focus on that today. And these are some of the ways that mortgage lenders are defrauded. So asset inflation, they're myriad examples for all of these asset inflation where I see that, especially in California where growing, selling and using, we used to call it pot. I guess the highbrow way to say it now is cannabis, for example, you get a cannabis farm and the most valuable part of that asset ordinarily is the license. The land is fine, but the license to grow is the most important part. And so if you're loaning money to a cannabis operation, verifying and securing as a part of your loan package, the license is probably the most important part of what you're going to do.

You're going to get title insurance, you're going to figure out who owns the land. And if you go out there and look at it, there's the hydroponics are very expensive, the lights are expensive, the watering is expensive. The fertilizer that they use there that literally this is true. Bat guano is among the most expensive substances on the planet earth. It's outrageously expensive and that's what they use as fertilized. So there are all those things that are costly involved in this and securing, making sure that all of those assets are part of your collateral is important because it will not surprise you to know when the pot farmers stop paying you and disappear when you show up there, the k quo huts that they were growing inside of and all the lights and all of the back wano is all gone. The only thing that's going to be left there is some plastic wrap that's dilapidated and no more working anymore and potentially some dead bodies because frankly it's still the drug trade, a pre soul appraisal fraud.

This comes kind of in two ways. You'll get applicants who are saying, I got some good news for you Mr. Lender, I'm going to save you $800 on your appraisal because I already got one that was completed last week and here's a copy of it. It isn't this great. This place is worth 8 million bucks. It is almost a guarantee if you hear that one that you're being defrauded, your spidey senses need to be peaked in that circumstance. So that's one. The other one is when they say, Hey, this is remote land or this is really high value assets is the house in Beverly Hills that no one else knows how to value except my buddy over here and here's his information. Melissa, you're laughing like you've heard these before. So if your borrower is telling you how much the place is worth improving it within appraisal, it's probably a lie.

If your borrower is telling you, here's the appraiser who you should use, that's probably the appraiser you should not use. So get your own appraisal from someone who you've used before or someone who's on a panel that you trust, someone with a reputation, look at their website, things like that. Figure out whether the appraisal that you were getting that is valuing your collateral. A lot of our folks watching this are asset-based lenders. So the value of the asset turns out to be very important to the loan that they're making. Identity theft. I promised you 25 minutes ago that we're going to talk about anti theft and we are. So that's someone who is named Julie Wilson, who owns a $12 million house in Beverly Hills, calls you and wants to have a loan, and Julie has never taken a loan on her house before. It's free and clear.

The title looks perfect and this all sounds great. She only wants $4 million. So your LTV is terrific and all this is great, and you close the loan and you fund the transaction to whatever chase Bank and about a nanosecond after your money gets in Chase Bank, it's transferred to someplace in India and you're never going to see the money again. And three months later when you hang your NOD on Julie Wilson's door, the real Julie Wilson's lawyer calls you and says, what on earth is this? We didn't ever get any money. We didn't ever apply for a loan. That is not our signature. That's not my driver's license. That's identity theft. You've found a fake person. We're going to talk in a little while about how to make sure you're matching your customer with the person who is on title to the land, but that's what identity theft is.

Occupancy fraud, those are duplexes generally that's I live in the upstairs. I'm going to convert the downstairs to an Airbnb and you need to know whether any of that's true. Is it really a duplex? Do they really live in the whole thing? They're you that it's a commercial apartment building. Have your appraisal appraiser or take some good pictures of it and make sure that that's true. Find out if anyone lives there or it's just the Von Trap family and they're all occupied individual units there. Straw buyers. Straw buyers are when the person making your loan application is not actually the person who is going to be using your collateral or using the funds from your loan. So I have awful credit and you would never issue a loan to me. And so I get my mom to call you and she takes the loan from you and offers her collateral, but has no intention of doing the things with the funds that the funds were ordained to do.

Title fraud is the borrower really the owner of the house? I talked a little bit about this and with identity theft, usually these go hand in hand. Fortunately with title fraud and sometimes with identity theft, you have good remedies with your title companies. We'll talk about those in a little bit. But title fraud is real and it happens plenty, certainly more than it should. Loan stacking, this is a good one. I saw this one for the first time about six months ago, and this is when customers are trying to get a loan in any amount, a million dollars on their $5 million place. And so they shop their loan to six different lenders and three of those lenders say, yeah, we'll be glad to issue you a loan. And so what they do is they take all three of them, and so instead of having a second, you've got a fifth on this property or you're not in the priority that you thought you were going to be because on escrow day he closed three loans instead of just yours.

There are a couple of ways to avoid that. That's one by his warranties and representations. But if he's defrauding, you probably aren't going to be able to rely on those. But it's another breach of contract that you'll have. Make sure that your escrow company is dating down your title policy on the day that you're closing so that if anybody else is recorded just 10 minutes before you did, you're going to find out and your escrow company will not close unless you're the first or unless you're the second or whatever the escrow instructions say. Make sure that your escrow company is doing that. And then like I say, get your customer to pinky swear that they're not actually committing fraud, which is fun and they probably don't care, but tried it in there anyway. So that's the list of horribles. The bad things that can happen to you probably make you want to scream and run away and never involve yourself in lending again.

But what can we do to defend ourselves? Well, probably the first thing that you can do to ensure that you're not being defrauded is to get to know your customer. Do you have time for that? I went to a seminar about four months ago and one of the panelists said before we issue any loan, the first thing we do when we get our loan application is we sit down somewhere with our prospective customer and we have coffee with them. Some lenders have time to do that. If you can face to face, spend some time with your perspective and find out why he wants the money and what he's going to do with it, and if he's a real guy, do it. But most companies, there's a volume to this business and a scale and that's not going to work for you. I had somebody ask me for a loan just last week. There's a person who wanted an automobile loan that he asked me for, and I have the advantage of knowing him very well. I have known him every day of his life and I signed his birth certificate. He's 15 and a half and he lives in my house. So that is a way to get to know one of your customers probably. You're not going to know your potential customers all that well, but getting to know them as best you can is going to protect you in many ways on these. Melissa, you got something for us?

Melissa Palmer:

Sure, yeah. When it comes to the education and training and a lot of the exit strategy shifts that we're seeing just in response to the market, it's not to say that you shouldn't be lending to people who are trying new exit strategies, especially when they're your trustee clients, but just understanding that your underwriting criteria could be more conservative to account for these learning curves and then understanding what education and professional licenses and any additional training that they've had to be able to actually match up with that exit strategy. And you had the story of the, we're talking about driver license matches for these ballot loans, but when it comes to identity theft, Airbnb has essentially unintentionally, I'm losing the word that I'm thinking of, but facilitated a lot of these transfers of property, illegitimate transfers of property. Because what you'll see is Airbnb will have a 30 day booking and a client comes in or a Airbnb guest comes in and the house is sold before for a screaming hunt deal before the end of that 30 days. And so that's where we see some of this identity theft is actually with short-term rentals.

Steven E. Ernest:

Yeah, matching a driver's license number with your customer. 87% of the time that you do that, you're going to have a valid load. Seems like a lot, but what that also means, the other side of that is 13% of your loans are fraudulent. Anybody have room on their balance sheet to do that? Probably not. 48% of fraudulent loans had voiceover internet protocol, phone numbers, those are the guys calling you from India and from, there's an island in the Caribbean where this is big, I forget which one, and Africa. So having a real phone number with an area code that you recognize and that you can call back is going to save you from fraud probably 98% of the time returning phone calls to those numbers instead of just accepting phone calls from them. If you find yourself always dealing with their voicemail, again, spidey senses, here's the biggest one. It's more expensive to figure out, but it works in my evaluation 100% of the time. How often can you get 100% if you find out their voter registration? There hasn't been in these records a single synthetic identity which has registered to vote.

There's a really easy political joke that I could tell right here, and I'm not going to do it because we don't get political on these webinars, but there you go. Some of the times this stuff writes itself appraisals with integrity. We talked about those before. Get appraisals from people or from your panel, not people that your customer suggested to you and certainly not an appraisal that they have just scanned email to you, verifying occupancy if you can find out who actually lives there. Is this really an Airbnb? Is this really commercial property? Is this owner occupied? All of those things are good to know. Sometimes with scale, it's not possible to learn all of those things, but if you want to have a perfect file, these are the ways to do it. Reputable allies, those are people like Melissa and like the appraiser who if you wanted to find private investigators for these things, you could do it and you could find reputable allies.

The folks that you bump into at these seminars are going to be those people and then know your customer. So what I talked about before, when the 15-year-old comes scampering up the stairs for an automobile loan, you're going to know him pretty well. When somebody calls you and says they've got some commercial land in suburban Detroit and they want to make a loan or they want to borrow some funds on that, you're probably not going to know them as well, but this is the industry that we're in, so you got to do the best you can, right?

Melissa Palmer:

Yeah, And I think just to compliment what you were saying when it comes to scale and if you think your organization doesn't have time for these things, I would say at a minimum just even have the process in place, even have the documentation, have the paperwork, even if you feel like you can't go through the verification of every step along the way. One, there are people you could hire for that, and then two, you could at least just have the documentation in place to be able to protect yourself on for the what if.

Steven E. Ernest:

Yeah. So changing your budget on these I think is relevant to do historically. I'm sure all of our lender clients have a pretty good idea what it costs them to close a loan, and all of those historical figures might not match what they need to spend in the future if they're interested in avoiding fraud and to make some more expenditures during the underwriting or the evaluation process might be a good idea, could save you some money down the road and if it doesn't, probably have some money in your budget for when you need to find a lawyer to sort of unscrew these circumstances that we find ourselves in. I don't like getting those phone calls, but they happen. That made

Melissa Palmer:

A career.

Steven E. Ernest:

Yeah,

Melissa Palmer:

Your paperwork and your process is the vitamin and the painkiller is your reaction if things go wrong.

Steven E. Ernest:

I like that. Nicely done. What do you do when you find yourself the victim of fraud? So this slide right here that we just went through, these are ways to avoid being the victim of fraud. The vitamins that Melissa was just talking about, the vaccine, what did you call it? The painkiller.

Melissa Palmer:

Painkiller, yeah. Yeah.

Steven E. Ernest:

Nice. This is what you do when you find yourself the victim of fraud. So title insurance, everybody buys title insurance, right? It'd be criminal not to. And here at Geraci we have historically recommended that folks buy title insurance for 120% of the loan value that they have. And the reason we do that is because it gives you a buffer When your loan goes bad, there's going to be insurance and there's going to be costs, and you're going to have to hire me to negotiate, navigate our way through these claims, and those items all come with cost. And if you've put a 20% buffer in your title insurance policy is going to save you a lot of time when that happens. But title claim, so you had someone claiming to be Julie Wilson make and you made a loan to them and the money's gone, the money's going to be transferred to India or someplace where you're never going to see it again almost immediately.

And so all you've got left is your collateral except the Julie Wilson who owns the house isn't the Julie Wilson who you gave the money to and they didn't sign any of your loans and probably they're going to sue you for slander of title and quiet title and all kinds of things like that. And you just call your title company and you say, Hey, this is the exact reason I bought this insurance. I need you to pay me. Title companies. All insurance companies are better at receiving premiums than they are at paying claims. And so they're going to drag it around for a year, a year and a half, and then ultimately they're going to give you the money that you're entitled to and that's good. As long as you bought 120 ish percent of your loan value for your title policy, you're going to be made whole.

There's going to be a little bit of time value of your money that you're not going to have, but you'll probably be made whole legal recourse. That's me. These are my favorite ones. So you call your affable available and affordable attorney, and we make all of the necessary claims. We've got private investigators, we've got Melissa, we've got courthouses that are available to you that can track down the narrative wells, that can figure out where the money went that can demonstrate the misrepresentations of material facts that you relied upon to your detriment. And scient, which is a really great Latin word that I didn't even mention earlier, but that'll be part of that case that we file for you.

Those are all of those damage control. So when you figure out what you've been defrauded from, it's pretty important that you do what's called mitigate your damages. Mitigate is a fun word that really just means reduce or lessen You make your damages as small as you can. If you think you're exposed for $800,000, well, you're going to make sure that you're marshaling the assets that you have in your collateral pool. You're going to stop allowing your customer to make any draws on these loans. If there's any way that you can unwind a wire, you're going to do that. All of those things, damage control. And then once, as they say, all the dust settles and you've figured out what has happened that was bad and how much it cost you, and gosh, I sure hope that that never happens again. Well, you need to review and reflect. Don't just hope. Hope is not a strategy. My wife tells me that one plan for how to avoid these things in the future. Evaluate the processes that you have, which ones are good, which ones are insufficient, and figure out how you're going to not be the victim of Joe Millionaire and his wiles in the future. Melissa, you have something on the reflection. Can you reflect for us

Melissa Palmer:

Just the military jargon of that's your after action report, so that's where you're going to figure out what happened, which areas to really bolster in your operations, and try to avoid it again in the future if you come across these things, Your

Steven E. Ernest:

After action report. I love that

Melissa Palmer:

The

Steven E. Ernest:

Time has flown by. We've been going 51 minutes and it seems like 10. This is amazing.

Melissa Palmer:

So

Steven E. Ernest:

Yes, this is the part on sprockets where you get to see our headshots again, those are outstanding, and we're going to read these. You were the one who did this. Do we do the questions that are in q and a are the questions that are in chat.

Melissa Palmer:

Oh, questions in q and a? So I see three open ones. We've got Jeff Dimick, I should just stick with first names. If I get the, oh, okay. Just two from Jeff with appraisals. I hear sometimes about a lender getting an appraisal assigned or some similar term to them in order to allow them to use it. What's the value of doing? So I would right away say that sounds like exactly what you were explaining not to do, but would you like me to repeat that question or do I have to put this answer live? Is that what I do?

Steven E. Ernest:

I'll take care of that if you want to do the talking part.

Melissa Palmer:

Sure. Yeah. I mean, I think this is exactly what Steven was explaining. When they come to you with an appraisal already, I would just get another one. Get it from a trusted appraiser in your network and do not rely upon previously accomplished ones, even if they are allegedly last week. So unless you want to take the time to validate it, figure out their appraiser license, maybe get some sort of statement of explanation with their license on the line, whether or not they have a previous established relationship with that person maybe. But to save 800 bucks, I don't know. Just get another one is what I would say.

Steven E. Ernest:

Yeah, this is one we talked about a little bit, so I don't want to belabor it, but if somebody is asking you to loan money to them and they're saying they already know how much your collateral is worth and they're going to send it to you for free unless you're loaning them money that you really never need to see again, I would, it is $800. It is probably not $800 anymore, but it's not that much money. That's not the place to save.

Melissa Palmer:

And you could go down a rabbit hole of saying, well, why did you have that already done and what other lenders backed out and why did they back out? And then it's like, just get another appraisal is what I would say.

Steven E. Ernest:

Yeah. All right. Next question. Anonymous attendee. That's pretty smart in a fraud seminar. To remain anonymous, question number one, I thought title insurance did not cover fraud. So it is very astute that you write that there is ordinarily going to be exclusions in your title policies, which we'll say exactly what you're saying there. If you want to just take their denial of coverage and move on and lick your wounds, you may, but this is a place where you fight them. If identity fraud, something like that is not covered by title insurance, there almost isn't a good reason for you to be buying title insurance. So they can exclude it and often do. But ordinarily, and when I say ordinarily, the better than 80% of the cases they still pay despite that question number two from anonymous attendee at which level dollar amount, number of victims, et cetera.

Does the FBI become interested in a case as a corollary? Are there some situations where law enforcement is effective in recouping money? So this is the inner workings of federal agencies and state law enforcement agencies. I don't have a good predictor that I can give you on that, whether it's dollar amount, whether it's a particularly sympathetic party, whether it's something egregious that's part of a bank robbery or a murder. It is something that makes it sexy that they can get on the news if they don't. I don't think there's a good answer for you, and I don't think there's probably a dollar threshold where the FBI is going to say, yeah, we're not interested because we only touch cases that are more than $5 million and yours is only 3.8. I kind of doubt that, but you shouldn't expect a great deal of investigation and action on behalf of the law enforcement agencies.

I don't know if you saw the movie The Great Lebowski. Here's another one from 25 years ago. I guess that's when I was in my prime because that's all my examples today. But someone steals the big Loki's car or the small Lebowski, whichever one he is, the dude, they steal his car and he goes to make a police report and then he sees the police officer and he goes, Hey, do you got any leads? And the guy is just laughing in his face, what are you talking about? We're not out looking for your stolen car. It is kind of like that. You'll be able to make a report. They will take the report, they'll probably issue you a written report that you could show to your insurer. But as far as sending the Marines into India, the buildings where these fraudsters are all setting up shop, I would not expect that to happen. And

Melissa Palmer:

That's the great thing with a lot of these fraudsters is because they don't have any criminal records because it's hard to actually do anything about it and get any initial crimes recorded, they can just continue to do it. And so your processes are going to be the screen that can hopefully prevent them from getting to you.

Steven E. Ernest:

Alright, Melissa, I think this next one might be yours. How do you confirm a phone number is not voiceover internet protocol?

Melissa Palmer:

Oh, that's interesting. I actually had that question for you that was on the slides and so I thought you had that ability with those. I mean, I can tell you the answer to your a hundred percent verifiable voting records. We can see that in LexisNexis. So if you don't have it and you need those kinds of records checks, that can be verified. But I don't actually know about the VoIP. You,

Steven E. Ernest:

I have a private investigator who tells me that.

Melissa Palmer:

Got it. Okay. That's

Steven E. Ernest:

Good one. So that's the way I accomplish that one. You hire the information anonymous attendee another one. These are very popular today. What steps do you recommend in wow diligence in transactions to make sure it is arm's length, particularly in entity heavy states like Indiana, to make sure it is arm's length? Well, I can't promise you that I understand what this question means, but I to make sure that these aren't loans to your brother or something of that nature. I guess what you would do is investigate the owner of the property and to what use are they intending to put your funds? Is this a purchase, is this a refi, is this a rehab? Something like that. And find out if these are the real guys and this is really what they're going to do, I think is what I would do there.

Melissa Palmer:

And I think that would be where you gather all of that preliminary information of use of funds, statements of explanation, trying to figure out and definitely checking their operating agreements and who the beneficiaries are of the entities. So I would say checking those underlying documents to see who is behind those entities

Steven E. Ernest:

Depending on what question's

Melissa Palmer:

Getting at.

Steven E. Ernest:

Alright, so this one's similar. What steps do you recommend in evaluating purchase contracts to ensure their true market transactions? I think most of those answers are the same to the previous question. To get to know your customer, why does your borrower want the money? What are they going to use it for? And then just shaking out their story. If what they're to do is tilt up a warehouse, well, is this flat land? Do they know a cement guy? What are their contractor plans? Things like that. It's just a refi evaluating the loan that you're paying off and how much cash they're taking out of it. Those kind of things. What are you going to do with the money A wreck regarding loan stacking? Would you please repeat as to what measures my escrow title company can implement to avoid it? Yeah. So is I say it's a great one and I don't mean that literally this one's a problem.

And a way to ensure that if somebody is closing three loans on the same day and you thought you were the only one is to figure out what position your loan is going to be as far as you understand it, I'm making a second on this property or I'm making a first on this property. Put that in the escrow instructions. Escrow. You are not allowed to close unless you can record a first position deeded of trust or whatever, wherever you want to be. Put that in the escrow instructions. And also don't have your escrow officer rely on a title policy that was issued two weeks ago. Have him date down the title policy you have that day and find out it's not going to be perfect, but it's going to eliminate a lot of the problems that you would rely on if you didn't do this at all or if you relied on a policy that's two weeks old. Those are the two things I would do here.

Melissa Palmer:

Yeah.

Steven E. Ernest:

Mike, what third party software should I subscribe to that would catch red flags and do automated fraud risk review analysis recommendations for better outcomes? Like one in a hundred failure, not 13 like you were saying in the slide software. So we use Westlaw. We may not use Westlaw forever. There's LexisNexis. Those are the two big ones that are available to attorneys. Melissa, do you have subscription services that are available to the general public?

Melissa Palmer:

I've got LexisNexis and Clear, and it's specifically for my fraud prevention. So I am not sure from the lender side if there would be access for that. But yeah, you can get, I know from the lender side there are products that LexisNexis has clear may have some for the lenders as well.

Steven E. Ernest:

Yeah, yeah. Those are the places to start. All right, anonymous. When we look up a borrower's driver's license online, does it show the picture of the driver? I think that's going to depend on the service that you use. Most of them are probably going to just have name DOB and state and number I think is the information you're generally going to get, not the person's picture. Something you can do if you want to see their picture, it's just a regular Google search. You do a Google search with their name and then click images and see what you come up with. Not perfect, but something if the scale of your operation will allow for that. Consider it. David, how do you confirm a driver's license belongs to the borrower and not identity fraud? So those are going to be your supplementary factors that you're going to find match the social security number and the driver's license and the voter id. If you do all of those things, you can be pretty sure those are ways. So what you're going to do is just pile other pieces of information on top of that driving license.

Melissa Palmer:

And it's not always ideal, but you could always require in-person notary instead of all the online notary options and have that in the instructions with the notary as well.

Steven E. Ernest:

Yeah. All right. Here's a war story from Alex. He called the FBI on, I guess he was the victim fraud 10 or so years ago. And the FBI agent that he got agents Mueller and Scully said, we're not going to help you, which is unfortunate, but to staff those offices with the amount of manpower that they would need to deal with all of these, well their taxes are going to go ray up. So you're either going to lose money in tax or you're going to lose money in fraud, and the government has decided that what you're going to do is lose money in fraud. So protect yourself the best way you can. Anonymous, insufficient insurance coverage was mentioned on one of your slides. What would be a good practice to determine that the insurance policy is sufficient? We here at Geraci, LLP recommend 120% of your loan value.

So if you're issuing a $1 million loan, we recommend $1.2 million of insurance. That's where we go. Maybe it's 125. It's right in there. Should we continue to rely on the estimated replacement costs as listed on the appraisal report? Example, a loan amount is 6 million and the asset report says the replacement of the property would be 2 million. What would be the best practice to ensure our loan is protected and made whole if damage it occurs to the property. So this is not necessarily way or fraud. This is kind of waste or spoliation. They tear down the house because it's going to be a rebuild and then they run out of your money or they run off with your money and don't rebuild. And after you foreclose, what you have is a scrape.

There could be some fraud claims there. I don't know that they're necessarily winners, but your question is not about that. Your question is how much title insurance. I am not so sure that that's a title claim. So what title insurance is telling you is who owns the property and what the other liens are. They're not guaranteeing you that a house is going to be there at the end if this is insurance that you are requiring your borrower to have replacement costs for damage like a tornado comes through, something like that. Construction costs are, this is not necessarily my field of expertise. Construction materials costs accelerated quite a lot during the pandemic, so probably whatever you used to think would be the cost of replacement. I would think it's probably 150% of that now I think is a safe estimate. So if you're looking at how much insurance you're requiring your customer to have, I would take the number that you're using in 2019 and multiply it by 1.5 maybe. Seems kind of safe anonymous. You have several potential lending deals on the table looking for a PML attorney. Where to start? Well here at, well here, we'll ask Melissa this one. Do you know any good lawyers?

Melissa Palmer:

I would recommend the lawyers at gii.

Steven E. Ernest:

Oh, that was completely unsolicited. I appreciate that so much. So there you go. We'll be glad to help you and if we can't, we'll send you to someone who can't it Looking for. I think this is the same question. What if the borrower says, I can't wait for an appraisal to come in because I have to move quickly and because appraisers have very long wait lists. What would you do about this deal? Is it a doozy? Must we always send an appraiser to make a safer deal? So it's your money. I'm not going to tell you how to run your railroad. The ideas that we had are sometimes going to be viewed by you guys as overkill. You don't have time to do that many things. You don't want to spend that much money on each of your loans and that's fine. It's your money to lend.

So I'm not going to tell you that you can't loan money to someone on property who has to close in three days and there's no time for an appraiser because all of the appraisers are booked out a month in advance or something, whatever. If that's what you want to do, you can do it. But each thing that you don't do, which Melissa and I talked about today, introduces risk into your transaction. So just evaluate that when you're making your budgets and when you're loaning out the money. If somebody wants 20 million from you and you've got a total book that's $25 million and you're thinking of loaning the money to him, I would probably do most of the things we were talking about because if that guy doesn't pay you, you've got a existential problem with your business. If somebody wants to have $150,000 and you've got $300 million of assets under management, it's probably not quite as big a deal. That's like when my son was asking me for a loan for a car. I'm going to make him take some driving classes and I'm going to make him promise he's not going to crash it and we're going to have insurance, but I'm not going to make him work instead of going to college because he's got to repay me for the Dodge Challenger Hellcat that he's wrapped around a telephone pole. That's literally what he wants. It's called a hellcat. There's no way that's happening. You're not getting a hell cap.

Melissa Palmer:

They digress. Yeah, and I would say for that, there's no always from us, right? Your underwriting, your lending criteria are yours, but you should set your rules and you should try to stick to them. And if you find yourself constantly outside of your own boundaries, you are in that area of risk that you yourself have said you're not willing to go to. So I'm just understanding there are exceptions to rules, but if you don't have rules, everything is an exception and it's not a really great strategy to lend with.

Steven E. Ernest:

So I think what Melissa just said is so smart, not surprising at all, figuring out what your parameters are, what are your guidelines? What is the arena that you intend to play in and sticking to those because I think, and in my experience, I've been at this I think 28 years now, pushing three decades, 90% of the losses that you're going to shoulder are going to be in the 5% of the times that you didn't stick to your guidelines that you strayed from your parameters. So if you stick to your guidelines, you're going to avoid most of what's happening. And if you find yourself sticking to your guidelines and still suffering inappropriate amounts and numbers of losses, you need to reevaluate your guidelines. I think Melissa's right on when she said that. All right. You like the LexiNexis search for voting? Would a US credit bureau report that says the person exists a hundred percent ensure not a synthetic identity a hundred percent no, but it's going to get you a ways down the road. So there's fraud is a big subject, and there are ways to create a synthetic identity that looks almost as real as a real one and sometimes even has the same name. And ways to do that are these fraudsters are buying written off debt and establishing that your customer has old debt and it makes them look even more real than the other ways. There are ways to do this, so a hundred percent no, but it's a good thing to do.

Melissa Palmer:

And when it comes to risk, there is no a hundred percent risk-free option. And so there's risk avoidance. If you don't want to get in a car accident, you don't drive. There's risk acceptance. You just go drive risk mitigation is that's where Steve's having his son take some driver's courses, have insurance. So you've got your levels of risk and as long as you start setting up your parameters and your guidelines and whatever policies you have in place, that's how you can help mitigate that risk.

Steven E. Ernest:

Yeah, yeah. Alright, Rick, thank you. We're glad that you're here. Timur, want to open a lending deal? Number two. So a bit green in this REI niche. What are some early steps to take Now as far as legal representation? I'm going to ask Melissa again to answer this one. What do you think that Timor should do in regard to legal representation?

Melissa Palmer:

I would certainly have someone on your team writing those loan documents, checking your escrow instructions, making sure that you have all of the critical elements of your loan docs in order. And Geraci happens to have loan origination office as well, so that definitely have some sort of attorney's office on your side at origination stage. And then servicing is another great way throughout your loan while it's out to make sure that you've got thorough documentation and some servicing companies also do loan origination paperwork as well. And so the early steps for legal representation is certainly hiring it out because unless you went to law school, there's professionals out there that do this every day and when you're new, it's nice to rely on the tried and true people that are doing this regularly.

Steven E. Ernest:

Yeah, that's right. Call us. We're glad to help.

Mike, how often are you seeing notary or appraiser fraud? The notary fraud is almost always in the identity theft arena and numerosity. It's not going to do you a lot of good for me to tell you that it's happening more now than it was 10 years ago. These things, when the economy really goes bad is when I see the notary fraud and the economy I think is bad now and it was bad in oh eight and it was bad in the.com bubble and then again in the September 11th thing and that's when these things popped up. The most notaries don't have insurance, but what they have is a bond. And when the bond is at issue, it's nice. That's pretty easy money for you to get. The drawback is sort of twofold. Number one, if the notary has engaged in some fraud related to your transaction, she's probably got a bunch of these and so you're probably going to get in line with a lot of people to collect on that bond. And the bad news there is the bond typically is $20,000 and so even if you get a hundred percent of it, you're not going to get a great deal of money.

So it happens. I have a story that I really want to tell about notary fraud, but we totally don't have time for it and I'm not going to, so in a subsequent episode of this, if I can ever get Melissa to do another one of these with me, I'm going to tell you that notary story.

Melissa Palmer:

I'll come back. Okay,

Steven E. Ernest:

Good. All right. Where might we find a useful diligence checklist for the borrower? There are so many items to go through, so list would be helpful. Well, the outline that we have, like Melissa told you at the beginning is going to be emailed to you. So there's a place to start.

Melissa Palmer:

Yeah, and when it comes to a checklist, they're all useless if they are not customed to what your actual lending criteria is. So you kind of have to start that question with your own lending criteria and then work forward from there.

Steven E. Ernest:

What steps do you recommend if you get an appraisal reassigned due to time constraints? So we're in a big hurry. We don't have time to get our own appraisal. We're going to use somebody else's. These answers are repetitive and I apologize for that, but it's your money. Just figure out how much of a holdback you want. Do you want to buy more insurance on this one? Those are the things I would think about. But if you're doing something that's outside your guidelines, like I said, 90% of your losses are going to come from 5% of the time that you strayed from your guidelines. This is one of the times you're straying. So are you just going to squint and hope, okay, it's your money. Are you going to buy some more insurance? Are you going to pass on this loan? Those are the considerations. Thank you for the information. Please have a great rest of your day, Edwin. I will try my very hardest to do exactly that. And I remember someone at the beginning of this saying that we were allowed to go 15 minutes over or was it a half an hour over? I can't remember which.

Melissa Palmer:

I think we had a 15 minute buffer. We might be.

Steven E. Ernest:

Well, my friends then the bad news is we're now 17 minutes over and we started two minutes late, so maybe we're only 15 minutes over, but this is the end. I kind of like to break rules, so I think I'm going to do one more. David Milo I think is a repeat. This is another one we had for him and we're going to answer it anyway. Anyone that tells me that my appraiser can't enter the subject property because the tenants won't allow it is a red flag and I immediately walk away. The appraiser has to enter the home. Yeah, good. Getting to know your customer, having professionals who you trust. There were line items on several of our slides suggesting many of those, and I think that's right. It's very careful of you. So good. That wasn't really a question. So we're going to do this one.

Christian Broden. How many of these measures are you doing for your clients versus they do themselves? So we don't participate here at jussi, LLP in the underwriting or the evaluation stage. That's our clients. It's their business. In the litigation group, which is what I direct. We typically don't hear about these things until they go bad. Nobody calls their litigator to tell 'em what a great day they're having. So it's always a problem when it gets to me and it's something that they didn't do or they thought they did that just win a foul and they've been defrauded. And here we are as a practice in our firm, we can help the clients establish their own guidelines and staff up. If you want me to find a private investigator for you, I can do that. If you want me to direct you to Melissa Palmer, I can do that. You can screenshot her name and her email address, which is right there. I'm pretty sure this is the business that she's in.

Melissa Palmer:

It is. Yep. So I actually help lenders establish their lending criteria, your due diligence process, and yeah, that's my bread and butter. So can either, it's either done for you or done with you. I will not do your processes and procedures, but I will on a case, on a deal by deal basis, look at the deal with the person, the verifiable information and present any gaps, risks and inconsistencies in information deal by deal. But if you actually want to work with just hammering out a really solid process for you to do internally, we can do that as well.

Steven E. Ernest:

All right. I am not lying when I say this. I could do this all day. I love this.

Melissa, it has been a unique pleasure and an honor for me to have you on this webinar today. It was great meeting you and spending time with you today, both today and at the seminar where we met the last time. I'm delighted and so grateful that you spent the time. Thank you to all of our attendees. It was great to have all of you. I hope you learned something. I hope you enjoyed our presentation, maybe laughed a little bit. And you're going to Google Joe Millionaire and watch those shows on YouTube tonight. It's 21 minutes past the hour, so you got 21 minutes extra free content over and above the 60 minutes that you got free before that. So it's been great. Thank you all so much.

Melissa Palmer:

Thank you, Steve. Thanks everyone.

Steven E. Ernest:

Adios. Be well.