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Estate Financial evaluator appointed

June 16, 2008

San Luis Obispo Superior Court Judge Barry T. LaBarbera Monday initiated a complete evaluation of the books of Estate Financial Inc. (EFI) mortgage fund.

LaBarbera appointed Hanno Powell — an attorney from Fresno experienced in receiverships — to look into EFI’s records unencumbered for 30 days.

A group of investors, prompted by an UncoveredSLO.com article, hired attorney Roger Frederickson to help protect their investments. Frederickson filed a lawsuit and asked the courts to appoint a receiver.

EFI is one of a number of hard money lenders currently under fire in San Luis Obispo County. Investors have accused EFI of failing to provide required documentation; file deeds of trust as required by their agreements; and pay investors following property sales.

Last month, regulators from the California Department of Corporations revoked the firm’s license to sell mortgage fund securities and part interest in real estate investments. The Department of Real Estate is currently investigating numerous complaints filed against EFI.

While hundreds of investors waited in the court room, the judge and attorneys discussed issues for more than an hour behind closed doors. LaBarbera then announced that an evaluator would be appointed, and that the mortgage fund would be responsible for $10,000 towards the cost of Powell’s evaluation.

LaBarbera scheduled a hearing for July 22 and 23, in which Powell’s findings will be used to determine the management of Estate Financial’s $170 million mortgage fund.


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By: Anonymous on 6/18/08

I can't for the life of me understand how anybody that has been around the block even once doesn't see that the investors that put the last 25 million in were just being robbed. Estate knew that there was NO chance that they would recieve a return on thier investment. Why did they continue to take money. Answer that with a possitive spin if you can EFI lovers. Forget that the world is crap and everyone is losing money tell me when poor managment steps over the line. In EFI case I'll bet over a year ago.

By: Anonymous on 6/18/08

TO THE TRUTH:


I am one of those people "banks would not touch" otherwise known as a developer. To bad you're sooooooo ignorant about the truth. When I borrowed money from Estate Financial I had three other loan offers from three other lenders who are currently having their troubles in this seriously declining real estate market – but are still in business and have not had their DOC licenses revoked.


The reason developers borrowed from Estate varied, but if it was because banks "would not touch them" then Estate should not have touched them either.


Before you enter the public forum and criticize people who you don't even know try understanding what you are talking about. You are not telling "THE TRUTH."

By: Anonymous on 6/18/08

I can barely read any of these last few blogs. Ignorant folks who refuse to dig into the 'real' problem with EFI. Jim Scott said it well at the meeting. \\


Alone, withholding pertinent information to existing and potential investors is FRAUD! Taking investors off deeds (or never puttin them on) and refinancing without their permission or payback is fraud. There is too much fraud to list. Anyone who is supporting Karen is either too lazy to read and get educated or is too stubborn to think open mindedly. Do you really think the DOC took their permit because of EFI's good management? No, they found justifiable cause! Even though the verbal battle continues on this blog. Real action is happening to prove Karen and Joshua's actions NOW. Don't laugh Karen Guth, your lawyer hasn't completely informed you! You'll see……

By: Anonymous on 6/18/08

to insider,

I do not know if Karen did anything illegal. She made many bad decisions. I am tired of people not taking responsibility for their own actions. Karen took peoples money, those people made a decsion to invest with her. If EF was the only hard money lender in trouble I would say this is all Karen, however, every hard money lender is in the same position. Major investment banks with some of the smartest people running them are writing down billions of dollars, todays headline were that the housing decline is the largest in 25 years. Everybody had to understand the reason somebody borrows at 12-14% is that they are a risky borrower. Somebody who banks would not touch. If the real estate market had continued to increase I dought there would have been a problem. If Karen and company have commited fraud they should be punished and that will come to light through this audit. If bad business decisions is what she is guilty of than who are we to throw stones.

By: Anonymous on 6/18/08

To: needs to know,


I am sorry I have such a crazy e-mail address but It was a nick name from my former employment and it stuck

It may sound crazy or prtentious or even something more discriptive but I was the manager of a large resort in Hawaii and as the problem solver it became a pet name.

So other than my address I am an investor in the fund who has been very proactive for about a year. I new Karen was lying and I wanted answers.

In the end I became a plaintiff in the present legal action. I have taken legal action for my family and all fund members becaues we are in this sinking boat together and some one must start rowing.

If you would like to contact me for information I am happy to try to help.

barbera

bcqueen@charter.net


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By: Anonymous on 6/18/08

insider says:


to Ditto


Banks are federaly insured. Karen took money from people she shouldn't have. For loans she new were defaulting even before she funded them and then through it down a fricken rat hole. Thats fraud. You must be some kind of f*cking idiot or Josh or Joshes Mommy.


I agree with you, but we must keep our cool. Karen and Josh (I don't think Josh had enough intelligence to know the difference, he just a puppy dog but still an idiot) knew and intentionally induced people to invest when it was clear that they can perform. That is criminal

By: Anonymous on 6/18/08

to Ditto


Banks are federaly insured. Karen took money from people she shouldn't have. For loans she new were defaulting even before she funded them and then through it down a fricken rat hole. Thats fraud. You must be some kind of f*cking idiot or Josh or Joshes Mommy.

By: Anonymous on 6/18/08

what is a "bcqueen"

By: Anonymous on 6/18/08

First I am not defending EFI by any means. Although Karen took money from unqualified borrowers so to did many many "legitimate" lending institutions. They took bank money and lent it to unqualified home buyers. For example how could anyone lend 100% or more to someone to buy a home when they don't have any money? And now they are all "crying" for us to bail them out. Sorry but they are on their own and I can't really say I'm sorry for them although I wish them the best of luck.

By: Anonymous on 6/18/08


After yesterdays meeting many investors approached me to ask certain questions that were not answered by Josh and Karen.

I was very happy to meet those of you I did not know and glad to put a face with those of you I have been exchanging e-mails with.

As I promised I am putting my personal contact information on the blog and offering to help you in any way I can.

As a plaintiff in this case there some thing I can not discuss but I can shed light on the process and the objectives of our legal action.

If you would like to be on my e-mail list please forward me your name and e-mail address.

Thank you all for your support and I hope to be in touch with you soon.

Sincerely,


Barbera Engelhardt

bcqueen@charter.net

805-343-6060

By: Anonymous on 6/18/08

I am dumbfounded by those who still believe Karen's drivel. She took investor money (in many cases from unqualified investors – remember the guy who was living in his car?), failed to fully fund projects with legitimate borrowers, put them into foreclosure and in some cases bankrupcy. She continued to pour money into her projects that she personally invested in, she neglected to get appraisals, she didn't monitor building projects. She jumped in bed with co-borrowers who were obviously not well vetted otherwise she would not be suing them now or claiming that they are "litigious nutcases." Remember, she personally determined whose projects were to be funded, she determined or approved the appraisals and committed funds to build or develop. She lent investor money to her own projects, didn't complete them, defaulted on them, and then failed to file foreclosures because she wants to hold on "til the market comes back" so she can sell and make her own profit. She has put her own greed for profit above her responsibility to do what is best for the investor. She has refused to buy back her own defaulted loans which is a violation of the operating aggreement and one of the reasons that the judge appointed an auditor. She has been instructed to make all books and records available or the auditor is to e-mail him if she refuses. This was addressed in open court. The facts are the facts. Don't try to spin it into a scenario that suggests that greedy investors are badgering a legitimate manager who has just run into a bit of bad luck.


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By: Anonymous on 6/18/08

EFI vs. Stocks


Your analysis is close and you will get back as much if you invested money on Worldcom or Enron. Just have lots a patience

By: Anonymous on 6/18/08

You all invested in a high risk "stock" with EFI. The market crashed and you lost. If this was with your stock broker would you be doing the same thing? Probably not. You would probably just write it off as a bad investment. The only route for any beneficial type of return is going for the long haul. Currently there is no more money. The best recourse is to wait for the real estate market to rebound which will probably take about 2 years. Those who invested everything with EFI will be the big losers while those who can ride the downturn out will recoup most of their original investment. That is unless you let the predator attorneys latch on to whatever you have left just to let you know that there is nothing left when they get finished with you.

By: Anonymous on 6/18/08

Would be nice it it was so simple. The enormaty of the FRAUD is overwhelming. wish half what Karen is putting out in inforation were true.

She should be pleased to have you on board. Keep following events as they unfold, you are not alone.

By: Anonymous on 6/18/08

wake up! says:


Well, I think I have finally heard and seen enough stupidity, that I need to speak out.


Glad you are in it for the long haul. It will be long and painfull all the way down. Enjoy the ride

By: Anonymous on 6/18/08

I do not believe this is a witch hunt and most investors believe as you do. We went into knowing the risk. What is of some concern is EFI's unwilling to get help. They are over their head and this move by the judge will at least make them open up the office and let a third party take a look. Even if we support Guth ane Yagoda it is fairly apparent they may have made some serious mistakes in not checking on projects before releasing funds etc.

By: Anonymous on 6/18/08

You are correct about the risky nature of this type of investment and the unwise choice to invest it all with EFI. You are right that investing for the long haul is good advice.


But… the majority of the loans are past their maturity dates, most by many years. The loans stopped producing a long time ago and interest payments were being made through new investors capitol. Many, like myself, had their money taken by Karen when we were not qualified. That is where your interest payments were coming from.


Now that no new investors can put money into the fund, where do you think your money is going to come from? EFI must be wound down, assets must be liquidated. No other source of money is available.


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By: Anonymous on 6/18/08

bullshit!

By: Anonymous on 6/18/08

I have contacted an ex-employee through a third party…


Unless subpoenaed this person is unwilling to speak to anyone.

By: Anonymous on 6/18/08

Well, I think I have finally heard and seen enough stupidity, that I need to speak out. As an EFI investor, I knew going into my investment hard money = high risk. Yes, the payback could be good, but a turn in the market could equate to a loss. Anyone who invested all their savings in EFI had their common sense overcome by greed. Anyone who depended on the interest from their EFI investment to pay their mortgage did not manage their money wisely. Again, hard money = high risk. I am sorry for those people who are suffering without interest payments, but what were you thinking? I know, you were thinking a windfall of money, continually supplied to you no matter what. Greed. Well, guess what, realestate hard money loans invest in realestate. Have you stopped to look around at the realestate market lately? Have you noticed it is in a slump? Have you noticed realestate is cyclical? I invested in EFI because I believed Karen Guth was savvy enough at her business to weather the eminent realestate bubble. I have no interest in your witch hunts to eliminate the person I signed up to invest with. I am not convinced appointing someone else, hiring lawyers and liquidating assets is going to cause me to come out ahead. And do you really think you're going to hire another fund manager who is going to wave their magic wand and suddenly get you back what you think you have lost? All I can see from this is profit for the lawyers and a loss for me. Oh yes, and all of you get the personal satisfaction of knowing you punished the person you have set your anger on since they aren't supplying you with the endless interest payments you need to keep up with your expenses. I am in this for the long run, and I want EFI to be able to return to business to secure return of my principal when the market turns around. Taking action to remove Karen, sell assets and hire lawyers will only be a windfall profit for the lawyers and is like selling at the bottom when a stock goes down. How stupid.

By: Anonymous on 6/18/08

The DRE actually has the authority to appoint a reciever at any time. What could they be waiting for?

By: Anonymous on 6/18/08

Does anyone know if Hanno Powell has already started his services? Is he currently sitting in EFI's office?

By: Anonymous on 6/18/08

To AA:


The ex-employees (as well as current employees) will be found and subpoenaed. Tick-tock, tick-tock.

By: Anonymous on 6/18/08

How long do you think Karen will be managing EFI and control first trust deed investments after the auditor uncovers fraudulent acts and nefarious business practices that will enable the judge to place a receiver? How long do you think Karen will be occupying space on 9th Street once Josh's real estate is revoked? Patience.

By: Anonymous on 6/18/08

Find Ex Employee's.


Some were fired for asking too many questions.

By: Anonymous on 6/18/08

Fred the Atty was only paid to go after the fund mgrs. Going after the stand alone TDs would have been too costly. If you want to brong the whole house down, you must open your own wallet


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By: Anonymous on 6/18/08

Repost from Monday June 16th

Anonymous says:


People, Karen is done anyway. She can no longer do new business. Remember her permits were pulled. Do any of you think the DOC will give them back? I don't. Literally, this is liquidation time. All that is left to do is sell. She certainly can't buy. Sure she can use the proceeds from sales of one property to improve another but again, she'll have to sell that property, too. One difference between a receiver and an auditor to the investors is this – now with an auditor in place Karen can keep paying herself. With a receiver, she wouldn't be able to do that – the cord would have been cut. Why even wait 5 weeks? Even then, the process to remove her after 5 weeks may still take more time beyond July 22. Remember, the auditor is only auditing the Fund and not EFI. THIS IS KEY INFORMATION! These are two seperate entities. EFI will have to be dealt with as well and that will take even more time later. I highly doubt 5 weeks will be the end. It very well may take much longer. Estate Financial Inc. needs to be taken down as well. Perhaps another hearing and many days of preparation after July 22. Be prepared for another ride!


Comments to Repost:

If EFI is the 'manager' of the Fund (as stated in the circular) then why didn't Roger pursue EFI? He only pursued the Mortgage Fund. There may be serious delays in getting Karen out due to this error. It's possible due to this approach Karen will be around a lot longer than July 22. More bleeding of the money and for everyone involved. Don't dispare, investors are headed in the right direction.

By: Anonymous on 6/18/08

What Jim Scott spoke about at the meeting yesterday (Mike Knecht's post) is not hand slapping. Jim brought up a clear situation that's happend to him and it pertained to incredibly fraudulant matters. A perfect case and point. Thank you 'Take Control.' Your post is well appreciated.

By: Anonymous on 6/18/08

Hi, Josh,

Sounds like someone slapped your hand pretty hard! Ouch!

By: Anonymous on 6/18/08

take control


I'm looking for solid reasons to bail on Karen and Josh. What you put forth is 'hand-slapping' violations. Show me where there is outright fraud and theft. The items that can be found on the DRE webisire as cause is low-watt. Put up or shut up

By: Anonymous on 6/18/08

The sooner she is gone the better. Don’t just sit back and read the blogs, don’t rely on the soft reporting of the Tribune. If you want to know what’s going on, get out there and do some research. Start at the County Recorder’s Office. Go to http://www.corp.ca.gov/ENF/list/e/estateFinancial.asp Read the reasons the Department of Corporations revoked EFI’s permit. Karen asserts the reason for the revocation was because the DOC was concerned that new investor money would be mixed with old investor money. Well, KAREN’S ASSERTION IS NOWHERE IN THE REVOCATION ORDER. The DOC lists among other reasons: violation for failing to provide investors with proper documents prior to taking their money, failing to disclose that they had funded loans in excess of 15% of the Funds assets to Karen’s affiliated companies. The DOC states that they have found that Karen’s business plan is no longer fair, just and equitable, that her Offering Circular contains material misrepresentations about investments and is not conducting business as disclosed in the Offering Circular. Just pull up the documents and read for yourself. Then decide whether you will be better off “staying the course” with Karen or replacing her with someone charged with guarding our assets and recovering our investments. Someone who has no conflict of interest, no projects funded with our money OR Karen who has taken over 15% of Fund assets to invest in her own projects – the same projects that have not been completed though fully funded, that have been in default in some cases since 2003, and that she has neglected to foreclose upon because they are her own projects? Karen, whose permit the DOC has REVOKED (though she would like you to believe that somehow it was her own idea!).


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By: Anonymous on 6/18/08

Have you inspected any of the properties your invested in? You can find the addresses on the lendersview website. Have you been surprised to find that fully funded loans have no buildings on them? Have you seen half-finished or barely-started buildings that have been sitting out in the weather for 12-18 months or longer? Have you been surprised to find that there are no fences securing the building sites of properties where work stopped? This is a violation. Who do you think will be liable for any accidents that might occur if someone wanders on-site and gets injured? Have you been surprised to find the number of lawsuits filed that Karen has neglected to tell you about? Go to SLOcourts.net and check the calendar each week. There is a court date for EFI on Monday, 6/23 in the Paso Robles Superior Court. Did she tell us about that one? There’s another court date scheduled for August regarding the Three Bells Winery in San Luis Obispo. These lawsuits that have been filed in SLO County. What others have been filed throughout the state that we are unaware of? These are but a few of the acts of Miss High and Mighty. Sit back and wait for the market to turn? Not me. I want her greedy hands out of the till. I don’t want her to be able to continue to collect her “management” fees. I want her to be held accountable for the ruin she has caused. I thank God that a judge has ordered an audit. I also find it interesting that when the hard questions were asked at the meeting yesterday, that they once again they tap danced there way out of answering. The meeting was to vote on replacing management yet Karen fell short of her responsibilities once again.

By: Anonymous on 6/18/08

Fellow Investors:

Since uncovered broke this story in March, we have been doing our own research. We have discovered that Karen neglected to file deeds of trust for investments made several years ago. For proof, all you need to do is go to the SLO County Recorder’s Office and look up Estate Finl Inc. You will see a flurry of activity of assignments of deeds of trust from September of last year through April. You will discover who was paid off from the Mortgage Fund since it went south. She stopped making interest payments to the investors from the Mortgage Fund in September, how did she justify buying out an investor in September (who is currently on her payroll)? Who are these other people that she bought out and why them and not others who had asked to be bought out? The documents are there at the County Office. Look for yourself. (Remember, you DO NOT HAVE TO PROVIDE YOUR NAME AND ADDRESS WHEN REQUESTING RECORDS FROM THE SLO COUNTY CLERKS OFFICE. If one asks, remind them of this and do not provide the information. The fact that there are still some clerks who ask for names and addresses, begs the question of "who wants to know?"). You will discover that Karen has signed reconveyances for loans that paid off but she did not repay the first trust deed investors. You will find that she has made millions of dollars of assignments of Mortgage Fund investments to Heritage Oaks Bank within the last few months. I don’t know what that means but I’m sure the appointed auditor will find out. She has used our investments to fund her own loans 100%. She has put down no money of her own. She collects rent from buildings on properties that we are invested in without returning any of the rent money to the investors. She has not paid property taxes on properties that we are invested in which is in violation of the operating agreement. Check out loan 237-04 (Templeton Mixed Use) on the Mortgage Fund portfolio on Estate Financials lendersview website. The appraised value of the property is $235,000. Karen funded $11,200,000. The loan to value is 3617%!!!. This is not a typo. Go on the website and see for yourself. The loan matured May 1, 2006 (well before the “downturn in the market”). The borrowers are “working on entitlements”. Nothing has been built. Nothing has been approved to be built. Yet Karen funded $11,200,000???

By: Anonymous on 6/18/08

Does anyone know if Powell can report his findings long before July 22. If fraud shows up early in his task, can he put brakes on the Fund ASAP?


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By: Anonymous on 6/18/08

If you want information about this 1.7 million dollar sale, ask John and Colleen Childers. They know details about it.

By: Anonymous on 6/18/08

Get the facts says:


Chipped away,


get the facts straight before making allegations about property that is or is not in escrow. You have been misinformed about all the information.


What are you referring to?

By: Anonymous on 6/18/08

Chipped away,


get the facts straight before making allegations about property that is or is not in escrow. You have been misinformed about all the information.

By: Anonymous on 6/18/08

Something to look into.


On the SLO County's Website

Public Records


Foley-Gannon, Inc.


Hinds Avenue Partners, LLC


Pacific Oak Foreclosure Service


APN: 005-152-033

By: Anonymous on 6/18/08

Looks more the loan B-101-08

Just a book entry to make you feel good

By: Anonymous on 6/18/08

Question to any one with a calculator!!

How could the portfolio have a yield for $14,780,162.84

when no payment is being paid? Is this amountbeing added to the balance or will it a tax write off next month?

By: Anonymous on 6/18/08

Anonymous


Likely the loan was a refinance for a loan that was never funded in the first place. That loan is due in 2010 with a hope that by than the market turns around. Even if it does interest will kill any potential profit. Investors on the hook on that too, while Karen was able to book her fees again. When and if any other property gets sold, she'll collect her fees from the proceeds first and all those loyal beleivers will be stuck with another bad loan.


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By: Anonymous on 6/18/08

I have a question for Powell…


How could EFI make a loan (B101-08) for more than 6 MILLION dollars earlier this year when last fall there was no money and no new investors?


Where was the money to lend going to come from? How could EFI make a commitment to fund this project in Bakersfield when EFI was not accepting new investors?


Here is another project that will never get funded and risk exposing EFI to further legal action by a developer.

By: Anonymous on 6/18/08

Mike Knecht


Mike, you are bringing up the real issues with the "melt down" at EFI. Majority of investors still don't bother to look into individual properties and their loan history. I know of more of the same stories on other properties. Karen will do anything to dodge and avoid facing them. As long as she can delay, she is in control.

We are her real problem, not the market and her loyal followers.

By: Anonymous on 6/18/08

to Mike


Don't think you are going to get far with Powell as he is brought in to audit the FUND. The guy at the meetinf, something Scott, was talking about a first TD he has and that has nothing to do with the fund. Even if his complaint is valid, it was the wrong forum to bring it up. He should file a complaint with DRE and see how it plays out. I too thought he was sincere, but it will get no traction with Powell

By: Anonymous on 6/18/08

Never mind that according to the San Luis News Paper headline, “EF Investors Hold Off Replacing Leaders”, a blatant mis statement because the meeting was in violation of Estate Financials Operating Agreement (there wasn’t the required notification). Karen’s own people said they didn’t have a count of who was there so there couldn’t have been a vote if one had been called.


One little part of the meeting at the Madonna Events Center told the whole Estate Financial story. This man gets the microphone and he states that a property that he was invested in has loans against it for nearly a million dollars while the property is worth no more that three or four hundred thousand dollars. He says there is no explanation of where the money went. He then further states that the deed of trust has been altered or changed and he no longer is on the paperwork, making him an unsecured lender. You could tell by his tone of voice he was for real and he was very willing to provide verification then and there to back up his allegations.


He stated that this property was radically over encumbered and that the deed of trust had been changed to exclude him from having any viable claim on the money he had invested with Karen Guth. Now, if someone accused me of stealing their property I am going to deny the allegation and ask them for proof. You didn’t hear Joshua deny anything. What he said was this wasn’t the forum to address the mans claim that his deed of trust had been, in effect, stolen from him. It wasn’t the time or place to talk about it, but here is the deal. It is never going to be the time or place for Karen or Joshua to address a specific property being over encumbered by a loan that doesn’t make sense and a deed of trust that has been changed out of investors names into one of Karen’s LLC.


If you want to talk generalities you will get all the stories you can stomach from Estate Financial. If you want to talk specific properties, with specific loans, and specific alterations on deeds of trust, the time is never going to be right. I didn’t get the name of the man who spoke but if he will E-mail me at mjk122085@aol.com I will write a letter to the Hanno Powel begging him to look into this specific issue. If this man is correct, and I have every reason to think he is, there has been a crime committed.

By: Anonymous on 6/18/08

Has anyone considered each time the word 'Fund' was written in the Operating Circular was a typo? I think Karen meant to say 'Fun' money. That would explain everything!


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By: Anonymous on 6/18/08

Insider, I just don't see where she is getting out of going to the Big House. If she cooperates maybe her time will be less in prison but that's it. Somebody has to pay prison time.


BTW, I heard there was a property down by Pismo that sold for 1.7 million very recently. The Hansens got the selling contract (stripped from another broker) and it sold. Anyone have details as to whether it was Fund money or FTDs? Any details where the money went? Karen's fees I'm guessing.

By: Anonymous on 6/18/08

10k, 20k, 30k, 40k its all nickles and dimes compared to the $170,000,000 that Karen started with. Once the evaluator has reasonable proof of fraud you will probably save hundreds of thousands in fees that Karen thinks she is due and be able to get hundreds more or what's left of her personal assets should you forgo prosecution. She may even cooperate rather than go to jail.

By: Anonymous on 6/18/08

to Fud


Don't you get it? If Karen sells a property that puts cash in her hands. She has no intention of returning anything to the Fund investors right? So what benefit are any sales until someone is in charge that can be trusted. Once a trusted manager is in place then sales can occur with knowledge of how the funds will be devided.

By: Anonymous on 6/18/08

I agree 10K is what, one week of the evaluator's time? Who's flipping the bill for the rest, if the fund only pays 10K of the cost? Let's say the evaluator charges 300/hr. Times that by 8 hours a day. That's $2400/day. That's not even 5 days of work. Whoever is flipping the bill for the rest is looking at over 40K. I'm sorry but judge LaBarbera seems to be favoring Karen. You can argue that the DOC and DRE have reviewed the books but they will admit they are not done with the investigation. EFI in today's meeting made it seem the audits were over. They aren't! I can only pray Powell can do the job under his limited powers. Cross your fingers all!

By: Anonymous on 6/18/08

Let's stick with the facts and potential solution. Currently, Karen is paying lawyers a lot of money which belongs to the investors. The investors are loosing money daily. THIS IS NO JOKE – DAILY- MONEY THAT WILL NEVER BE RECOVERED. If the property stays in place for you long term investors, who is going to pay the expenses? Karen can't drum up more investors, her permit was pulled. Remember? So, this leaves her in a situation of selling everything. She mentioned this today by bringing up the 'unwinding of the fund' found in your Circular. She has to sell it all. If you let her hang on to it she'll gladly be taking management fees along the way. So when she remarked she wanted to hold on to the property until the market improves (god knows when that will be) then I feel she's delusional and greedy – more management fees. Spring is coming to an end and summer is here, these are the best selling months. Do any of you see an improvement in real estate? I don't. The expense to hold these properties for another year or longer will be eaten by her management fees and other carrying costs. Besides, look at our economy. The bond insurers insuring the bank loans are marginally making it. Many of these banks will have to assume the debt back if the bond insurers lose their A ratings which will cause the banks to be worse off – more write offs. (Make sure all your money at the banks are FDIC insured!) It's predicted we haven't even hit the bottom of real estate market yet. Once the bottom is reached, it will most likely flat line for a while. So Karen's remark about waiting for the market return is a joke! She's eating the profits with management fees and unavoidable lawyer fees. The builders and subs WILL sue. They have the right to their money. They never got their money. Now you the investors have liens on your properties, and that's putting it lightly. Go back to previous articles and posts and you will find actual incidents that support fruad. It seems lately people aren't posting their individual situations, most likely because their lawyers are asking them to keep quiet. If we all just shut up and let Karen do her job, she will (and from what I understand 'has') leverage the properties by taking out loans against them and use that money to finish projects or ?????. Of course, under good management this would have never happend! She will continue to loose more and more money for the investors this way. I'm in support of having her removed ASAP!


And where did that information come from that investors will have to wait until July 22 before their properties can be sold? Hanno Powell lost his rights as a receiver, he's now only an observer of records and can't manage or lock accounts nor property sales. SOMEONE PLEASE TELL ME WHERE THE INFORMATION CAME FROM THAT PROPERTIES CAN'T BE SOLD UNTIL JULY 22? Thanks!


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