Betty The Restauranteur

[taxguykarl]

They put you in jail for tax evasion.

I could have gotten him off the hook with the IRS--not cheap, but less than $20k.

I doubt they'll come up with the money, mostly because Betty's husband doesn't want to.

Did I read that right? He actually wants to go through a foreclosure.

[Ghel]

Did I read that right? He actually wants to go through a foreclosure.

That's how it appears to me. I'm not sure how credit-savvy he is, but he might realize that the restaurant loan isn't in his name, so it won't ruin his credit if we foreclose, only Betty's.

.... wait a sec. I just remembered something. We don't report commercial loans to the credit bureau. So even though the restaurant loan is in Betty's name as an individual (the restaurant isn't incorporated), the foreclosure won't hurt Betty's credit, either. So basically, there's no ramifications for them if we foreclose. Except that they lose their business, which as far as we can tell, isn't making money anyway.

[Marmalady]

So... there's a foreclosure, the restaurant closes, the employees lose their jobs, and Betty and her husband can just say it was all the fault of the big nasty bank?

[Ghel]

Effectively, yes. And we won't be able to respond because of privacy laws.

[notalwaysright]

It's always depressing to me when people are able to play the system and have no repercussions. Your bank has given them so many chances! My parents had a horrible time trying to do a short sale, the bank was very hard (impossible) to talk to and they repeatedly "lost" paperwork, the market was at it's worst, and they did have to pay taxes on the "forgiven" part of the loan. It probably would have been better to just let the bank take it away, but they were trying to do the right thing. That bank has been fined and had multiple lawsuits, so it wasn't just my parents not understanding, or doing things wrong.

And to see people get all these extensions, when then probably have no intention of paying, giving you guys the run-around, etc. Very aggravating.

[Aragarthiel]

So... there's a foreclosure, the restaurant closes, the employees lose their jobs, and Betty and her husband can just say it was all the fault of the big nasty bank?

If the employees haven't been getting paid because of Betty's financial issues, it's likely that they won't be blaming the bank.

[mjr]

I think we're all missing a very important question here: Is the food at Betty's restaurant any good?

;-)

Anyway, yeah, based on what Ghel is writing, it seems to me like Betty's husband wants the restaurant to fail.

It seems like a money suck, anyway. Maybe she needs to be on "Restaurant Impossible".

[VComps]

I think we're all missing a very important question here: Is the food at Betty's restaurant any good? ;-) Anyway, yeah, based on what Ghel is writing, it seems to me like Betty's husband wants the restaurant to fail. It seems like a money suck, anyway. Maybe she needs to be on "Restaurant Impossible".

Nah. Kitchen Nightmares. Let's see how she likes going 2 out of 3 falls with Gordon Ramsay.

[mjr]

Nah. Kitchen Nightmares. Let's see how she likes going 2 out of 3 falls with Gordon Ramsay.

I'm guessing it would be about how things went from Amy with Amy's Baking Company...

[Marmalady]

If the employees haven't been getting paid because of Betty's financial issues, it's likely that they won't be blaming the bank.

That's true - I had forgotten what the OP had said before, about their paychecks not being honoured, when I made the post.

[sstabeler]

Is there any way you could point it out to someone higher up? Because there's no legal reason why the bank can't change it's mind, and start reporting commerical loans to the bureaus. ( what they probably can't do is just report Betty's acocunt to the bureaus, while not reporting anybody else's account)

[eltf177]

What a mess! Why is it I see Betty and her husband making no decision and forcing the bank to foreclose?

And of course this is all bank's fault! The fact that there are no repercussions on either Betty or her useless husband is just positive proof that trying to be honest is a suckers game...

[mjr]

What a mess! Why is it I see Betty and her husband making no decision and forcing the bank to foreclose?

And of course this is all bank's fault! The fact that there are no repercussions on either Betty or her useless husband is just positive proof that trying to be honest is a suckers game...

I wouldn't necessarily say that Betty's husband is "useless". He could be "playing the game".

In other words, he's letting the restaurant fail, all the while looking like (at least to Betty) he wants to help.

Dunno.

[Tolly]

Sheesh, what a colossal mess...

Betty's husband's behaviour is definitely very suss, it rather sounds like he's setting her up to fail. doesn't it?

I'm looking forward to the inevitable foreclosure post.

[Ghel]

Things just got interesting. Not necessarily good, but interesting.

Betty called yesterday and told me that she'd received the inheritance check and deposited it at another bank. (I had no idea she had accounts at other banks, but that doesn't change much.) The bank put a hold on the check, so she wouldn't be able to make any payments until next week. And then she and her husband are going to be gone until Tuesday, so she won't be able to pay the real estate taxes until Wednesday. Could we put off starting the foreclosure until Wednesday?

I told her as long as she provided documentation that she'd received the money, we could wait an additional two days. So she had her accountant fax us a copy of the letter from the trustee and the check for over $70,000. Now we'll wait and see if she actually pays the real estate taxes on Wednesday.


Now, on the house... You may recall that back in February, Betty and her husband got insurance for the first time in many years, but it was immediately canceled because the check bounced. In May, they got insurance again (both times through the MN Fair Plan). The policy was dated May 5. We renewed their loan May 27. June 10, we received a lapse notice on their insurance. I called the MN Fair Plan, and they said the insurance was canceled effective May 5, because (surprise, surprise) the premium was never paid.

Looking at the timing on this, that means that when Betty and her husband came in to sign the renewal documents for their home loan, they knew that they hadn't paid the premiums on the insurance, but said nothing. One of the things I went over before having them sign the documents was that they'd done as we asked and paid their real estate taxes and purchased insurance on the house. I've suspected for a long time that Betty was making lies of omission, but now I have proof.