Chase FontenoThe Real Estate Catburglar

The Web of Deciet and Destruction by Michael Davis on Chase Fonteno and Hilton Head Properties - Channel 11 video and more...

2011-05-24T09:12:00.000-07:00

Apparently Mr Davis continues to seek to create havoc as recently as yesterday - a year after a Court found him guilty and awarded me $8mil in damages for his false information online.

So - here is a repeat of a prior blog with facts.

Welcome to the world where one person (Michael Davis) can initiate a path of online destruction against another (Chase Fonteno) by posting for free, false news releases, create concepts that even a news channel will do a story on - before they realize they were duped - and thus leaving a video of the false news that the person can then post on video sites around the world to give the image of bad deeds - even though a judge has now ordered them taken down - I hope and pray you never have to go though what I have had to at the hands of Michael Davis. Hopefully this article will help you protect yourself from this... maybe...

If you have seen the Channel 11 HHP/Fonteno video from 2009 or seen any of the 'interesting' websites on Chase Fonteno or even postings on the rip0ffr4p0rt [spelled the site wrong to prevent them from gaining any more notoriety] , then you need to read this!

A lesson in don't piss off an employee - the damages can be 'huge' if they don't care about their own credit or suits against them.

FACTS
These are the facts about a former employee named Michael Davis - though he has operated under many names in his activities - all after we hired him - days out of Federal Prision for Loan Fraud - in charge of our accounting and banking. [yes, I know, someone screwed up not doing a background check...]

Since April of 2009, I have been in a different world. Mostly a world created by a guy named Michael Davis. Amazing what someone can do with a criminal mind and bent on destroying someone else (and make money at it).

First - I was born Douglas Proctor, took my set fathers last name in high school 9Fonteno, and have gone by 'Chase' since 5th grade, nick name given to me by school friends. My father (step father) was a well known politician in Houston for many years - he passed away in 2008. [more on me at www.chasefonteno.com and on my father at either www.jimfonteno.com or www.en.wikipedia.org/wiki/James_Walton_Fonteno]

Hilton Head Properties [www.hiltonheadproperties.net] and its subsidary companies 'mostly' acquire large multi-million dollar distressed apartment properties from bankruptcy, lawsuits, divesture, tax sales and other manners. Which are partly renovated or what ever issues of 'distressed' that existed resolved and then re-sell - many times on an owner financed note to other investors. The company typically never acquires single family properties, but instead acquiring the mortgages on single family properties for investment income, done in a subsidary company (Hilton Head Finance)

FIRST HIRE
Sept. 2006
Michael Davis came to work for Hilton Head Properties in September, 2006 as our new Chief Financial Officer and Director on the Board. Why did we hire him? Great resume and was at the time 'supposedly' a Director of Finance at EDS. Had a great wife who was an attorney for {big public soft drink company} and a cool son named {lets say Mark to protect the young} who played hockey. He worked for a few months as the company was on the verge of doing a 506RegD State Securities Offering to raise capital. So he was a good fit with the other staff the company had.

COLON CANCER ? OR PRISON?
But a few months after he was there, before the offering came out, in Dec. 2006 - he gave me a letter of resignation. Why? He had colon cancer and was going to Houston to have surgery. I convinced him that I was going to hold his resignation aside and see how it went. Even offered part pay to stay on the Board and remaine the CFO and to review work in Houston by laptop while he was recovering. He agreed. We even threw a going away party for him with all the staff. That was a friday.

On Monday after he left, it occured to us we did not have any idea what hospital in Houston he was going to. Called his house - no answer. So I had my assistant start calling all the Hospitals in Houston (know how many there are? wow...) At the end of the day - we tried his house again (I actually had 3 employees in my office that heard this conversation on speaker). Got an answer by his 'wife'. Actual conversation:
Chase - "Hi, this is Chase at Hilton Head Properties, is this Michael's wife?"
Wife - "ummm... no, I am his girlfriend - he doesn't have a wife".
Chase - "hmmm... maybe I made a mistake, are you an attorney for {big public soft drink company} and he has a son named {Mark}?"
Wife - "no, I am an attorney that work for a company that does some legal work for {that company}, but I do not work directly for {that company} directly', and {Mark} is my son, not Michaels.
Chase - "well maybe I misunderstood about the wife part - my apologies. Michael left so quickly that we did not know what hospital he is at in Houston for his Colon Cancer"
Wife - "Oh... his problems are bigger than colon cancer..."
Chase - "oh no... is he going to make it?"
Wife - "yes, but it will take about 16 months..."
Chase - "wow... you almost sound as if he went to prison instead of the hospital"
Wife - "bingo !"
Chase - "what? are you serious?"
Wife - "he told you had colon cancer? He checked into Federal Prison for 16 months for something a prior boss did and he got into trouble for it" {ahem - he lied to her too, see later}.
Chase - "like what?"
Wife - "Before he was at EDS, he was at a small company and the President was committing fraud, and Michael found out about it - but did not tell anyone for a bit - and finally the Feds got involved. When it all came down - Michael was found guilty for not reporting, so he agreed to be a witness if they would only find him guilty for 1 count of mail fraud, which the judge gave him 16 months in the Federal Penitentiary"
Chase - "wow - that is quite different than he told us"
Wife - "well, I think he did not want anyone to know since it was really not his fault"
Chase - "thank you for your time and I am sorry to bother you"

We decided to 'accept' his letter of resignation. :) And move on.

We should have done more research, but we let it die and removed him from our website and all literature and went on.

I never wrote Michael nor contacted him. I had a few issues about him lying - but it appeared to be 'honorable' in the intent of not causing any worries at the company with staff, investors and others since he was only here a few months and no real public information other than one news release that we were hiring him. And as a private company we decided to not make a news release about his resignation.

MICHAEL DAVIS OUT OF PRISON - SECOND TIME AROUND
So the company moved on. Then, without tought, 16 months later I was contacted by Michael Davis by email asking for a website link to documents we used.

I honestly could not even remember who he was at first and had to ask HR Dept - I was advised just 'colon cancer guy'? Oh... yea...

I thought - know what - lets at lease get closure, so I met Michael for lunch, where he reiterated the same story he told his... ahem... 'wife'. I felt sorry that his life was messed up by someone else. That day will live in infamy for me... :(
We were short on a bookkeeper, and actually he did a good job for us when he was with us I thought, but could never use him for a CFO, so I agreed to hire him for bookkeeping at minimum wage (literally), in Sept, 2008.

He jumped in and appeared to really go after it. But there were times that he acted odd, even angry around the office. I did not realize till later when it was pointed out that it was when I would be 'dating' someone. And was nice again when it would end. I decided during HHP's turnaround that we needed to do two things, one was to move from our 22,000+ sqft offices on the 38 floor of One Elm Place (since we were down from 50+ employees/contractors to about 6 for now) and to raise money against our mortgage entity, Hilton Head Finance, which would require an audit of our accounts. The latter issue seemed to make Michael Davis nervous, but I did not relate the issue.

So, we moved Hilton Head Properties to the penthouse of the Hartford Building, 400 N St Paul (14th floor). Really nice offices, but about 1/2 the space and 1/3 the rent. Room to grow also. Odd, when we moved in the first week of May - Michael never showed up. Would not even answer phone calls. Just 'gone'.

ALL HELL HIT...
1. We started noticing that former employees and investors were posting false information on us on a scam site called 'therip0ffr4p0rt'. Lots of postings. After talking to the former employees, they stated not only did then not post it, but they would sign affidavits they did not - which we now have. That site has amazing search engine abilities to show up always on the first page of any search that has a word in it. Can't sue them and they will not remove false info - even under a judges order. They operate under a federal law called 'the internet decency act'. Only, it is indecent what they have done to good people, including HHP. But 'lots' of individuals and companies. I have read horror stories how this guy gets paid tons of cash to 'soften' the blow (he use to remove data for a large fee - but he is now in trouble over that - for fraud & rackateering. So - it will 'never' go away. :( [more on this below as to 'really' what happened]

2. We had our mail forwarded from the old office to the new one. Shortly thereafter, my assistant received bank mail showing that a credit card was taken out on one of the associate companies, and Michael Davis was listed as the 'President', and had personally used approx. $9,500 of the line of credit. Loan fraud? (again, did not know the truth about his background yet).

3. Within a week of moving into our new offices, the Dallas District Attorney contacted us claiming that we were being 'reviewed' about a complaint of real estate fraud. Huh? So we cooperated, gave them requested documents and followed up 'very' often sending over more documents without them even requesting to ensure they had a full picture of what we do. We were advised they had received some documents and notes from Michael Davis. I don't think they were aware of Michael's real background either. They never say 'its over'. But we never heard another word - that was June/2009.

4. During the 'same week' that the District Attorney arrived in our office - we were contacted by Channel 11 wanting to do a story on 'something' as they would not say. And they would not discuss it at all - 'except on camera'. That was their constant request 'on camera interview'. Two fathers in politics have taught me - do not talk to the press unless you know exactly what is going on. So I did not. They did say they understood I and the company were under investigation by the DA. I and my attorneys responded to Channel 11 by email 'guessing' what they were doing a story on. We hit it on both counts. They pursued a story for about 1 1/2 months. Then they advised they were going to do a story without my statement. Fortunately they used the emails - but only the parts they wanted to. The guy behind the screen? Michael Davis. LOTS of 'false' information, 'misleading' information and even reviewing documents we do not use and have not used since 2004 or 2005. And 'we don't sell homes'. Ever. We purchase notes. Oddly - the story was about one property (Cecila Landis) that a guy named Mike acquired the property in his company and sold to a family for $500 down, no credit check and no payments for a number of months - but they had to fix the property themselves. Later Hilton Head Finance purchased the note from Mike. But HHF 'guaranteed' their title when the note was purchased as the holder of the note. But - when they were delinquent in their payments for many months and notice of foreclosure was sent - they got an attorney who noticed an issue in the contract - an issue we agreed was a problem - so... we 'gave' that property to the Landis - with only two terms of agreement. One - they would assume the delinquent property taxes. And Two - we no longer would guarantee the advserse title issue. A deal that was done by 'their' attorneys. We agreed - and it was done - over 3 years ago ! So... what are they complaining about the 'repairs'? And a family showing up years later (a family that left the house to rot, not pay taxes, blight on the neighborhood and danger to the children in the area - which was turned into a home for someone willing to fix it and pay taxes?) No idea why this property was brought up. And that was a news story over 9 months ago. Not another word. Just slander/libel. Not our property. No mortgage to us.

The others? All I know now, is that they all are related and purchased property all at the same time from either the Sterling, GP or BP companies - not our company. We later purchased the notes. They purchased with $200 to $500 down, no credit check and no payments for several months to get the properties repaired. We purchased the notes before their first payment was due. They never did any repairs nor made any payments. And we never heard another word. We sent out notices to cancel their agreement and give them a refund so the property could be sold back to the company we got the note from - but never heard a word. So we later foreclosed. Not sure 'what' was going on there. Then we returned the properties back to the parties that sold the notes to us for a credit. Why did they 'know' Hilton Head and blame us? It appears they were visited by 'some guy' that advised them HHP and Chase defrauded them. Guessing the 'guy' was Michael Davis considering all else he did.

Why did the news and the DA take action as they did? We later found out that each was advised by 'Michael Davis' that the other was doing an investigation. (ie. DA advised Channel 11 doing investigation and vice versa). Verifying one another provided motivation - and Michael Davis provided the fuel - even if it was a bit misleading and out of context.

ITEMS IN THE NEWS STORY - REAL TRUTH...
a. I do have a stock brokerage violation from 1995. It is disclosed to 'everyone' always. New employees, charities I sit on board/committees, investors, partners, banks, hard money lenders, wall street, brokers - everyone. It is even disclosed to anyone I ever date within the first few dates. Not exactly 'hidden info'. The violation? I was new to securities on the issuance side and violated a disclosure requirement I was unaware of. I received probation for the violation, with a right to travel almost anywhere and requirement to pay any damages. And I am NOT on any supervision or anything else. That was over a long time ago. False statement entirely.

b. Hilton Head Properties and Hilton Head Finance have 'never' during its existence purchase 'any' single family homes or acquired any adverse possession homes. We 'did' rent space to over 40 investors that would acquire homes by many means, including tax sales, bankruptcy, foreclosure, judgment lien sales, auctions and more - including Texas Statute adverse possession. The 'vast' majority of 100's of mortgages we acquired were from properties the investor 'purchased' by these means.
This story was about the 'few' that no owners could be found by the investor. Dallas has over 2,000 abandon, boarded up home, many of which the owners are dead and no heirs exist that can be found. The County/City/School District have so many delinquent tax properties that it takes 'many' years to finally foreclose on these (some we have seen have over 20 years back taxes). And the City is 'backlogged' in tearing homes down and it will typicall 'years' to get to them to tear it down. Some of the parties we purchased mortgages from started the legal process defined in Texas Statutes for adverse possession to acquire them so families that are tired of renting could buy a home for $500 down and $300 monthly with no credit check and fix it themselves. We agreed to acquire 'some' of these 'adverse' possession notes - of which the company has approximately 30 active adverse possession notes. However the documents provide the the holder of the note had to 'guarantee' title to them, or provide them a nicer home. Hilton Head has a 'golden rule' which is 'very' prominent on our website, and always has been for years - which the news apparently 'intentionally' failed to show (considering they anaylzed the site and it was on the front page?)(www.hiltonheadproperties.net) which states the ethics that the company operates under and also the terms of guarantee to all home owners and in particularly the ethics we operate under towards both the buyer and 'heir apparent' of an adverse property we hold a note on, and in fact the company has acted on that guarantee a number of times. And even been reviewed by several Attorney Generals with no demands further action warranted.

The investors that acquire properties and sell them to individuals, which the company many times acquires the mortgage on - have now been advised 'while we want to help the community rid itself of blighted properties and provide homes to those wanting to get out of slum properties - the image of what you are doing and our involvement of purchasing notes on adverse possession properties is damaging our credability because of Channel 11 and the local agencies, and therefore we cannot acquire any further adverse mortgages. We are sorry. Chase Fonteno, President
.

c. Name not on anything? I sign for 'everything' for HHP, HHF and all affiliated companies. Not sure even IBM has the president's name personally on everything. This is a 'corporation' that has over $3mil invested in it by investors and has over 130 shareholders. The 'company's name should be on everything - not mine personally. Why were checks in my name? No Idea. All mortgages are owned by Hilton Head Finance. All payments go to Hilton Head Finance. I have seen 'many' payments made incorrectly to former owners of the notes, to the name of the sales person, even a few times to our bi-lingual assistant. ALL are stamped Hilton Head Finance and deposited in HHF's account for proper credit and accounting. And we are currently doing a massive audit of HHF for a very large securities offering. Think if there was some impropriety that we would be doing a securities 'audit'? What people will do to report 1/2 the story and put it out of context to get a more sensational story.

d. This blog as 'real estate catburglar' being identified as 'teaching others' how to 'really' steal real estate. This site gave advice on how to deal with vacant, abandon, tax delinquent property that is a blight on society a danger to the children living near it and a haven for drug dealers and bums. And it was characterized as 'bad'?

5. Once the news story was out - it was copied approximately 50 times to websites all over the world - mostly with a title of 'Chase Sucks'. Michael Davis usually appearing as the poster or enough information posted to know it was him. Again - putting text around the new story that was neither in the story nor true.

6. Actual 'news stories' started getting posted all over the internet - anywhere he could get the ability to post a 'free' news story. Wild stories - all completely slander and false information - which fortunately over a period of 4 months almost all news services read and agreed to delete as it was not news, but a slander attack.

7. chase-fonteno.com - Michael Davis most creative effort outside of convincing Channel 11 to do a story construing many facts. This website is interesting in that it takes 'some' facts and creates an image that far exceeds reality. And he uses 'things' he created elsewhere in the internet to support it.

8. Davis started posting on the internet in facebook, twitter and by email the company's bank balances, did it regularly for several months to prove he could use inside information he obtained to hack into our bank accounts - even using that information to transfer funds to a bank account he managed. We had to get 'new' account numbers for 'every' account (over 30) in the end to finally stop him.

9. Davis hacked my personal twitter and facebook account (he had enough info on me to get in and change both the email and the password to take full control. Fortunately facebook returned control very quickly (a week). But twitter? 3 months since they do not really have a staff and take request for review and action as they can. He posted on both sites, which went to my family, investors, employees, financiers, etc. mostly things indicating I was gay. While I completely respect the gay community, I am as far from gay as you get. Control was finally given back by the site company and changed back.

10. I have been recieving numerous 'gay' magazines and other paraphernalia at my office and home - all ordered under my name, using an american express card that we are told by those companies that does not allow a charge. No idea, but it is not my credit card.

11. Letter written to my mother, brother and some friends and investors from 'anonymous' making false claims about me.

12. My cell phone, power and other services were oddly turned off at times - always being told it was 'Chase Fonteno' that called in the cancellation. I did not.

There is more... but it is more of the same.

LAWSUIT - ANY GOOD?
So, HHP & I sued for slander, libel, defamation of character, dispargment, tortious interference,
http://www.hiltonheadproperties.net/legal/michaelrdavis_slandersuit.htm

http://www.hiltonheadproperties.net/legal/michaelrdavis_fraudsuit.htm

We won on BOTH suits as to his actions, by default, but had to prove up some of the evidence as to the restraing order we got against Michael Davis. We now go to court in April and May to plead for the damages.

WILL THE REAL MICHAEL DAVIS PLEASE STAND UP
In the suits - we learned the REAL background of Michael Ray Davis. There was never a 'boss' that took advantage of him or got him into trouble. Davis applied for loans (cars, cash, house, etc.) by stating false information. He went to jail for loan fraud.

His 'work' at EDS? It was based on his employment at several 'other' large companies. It appears all of those were not true. So even EDS hired without proper checks. And when we hired him? During 'the' week, or the 'week after' he was found out due to the federal indictment on him for loan fraud. So - we 'did' technically hire him from EDS. But we did not do the amount of checking we do now.

For all you in la la land, or hoping to build a business, or already running a business - this can happen to you. There are people out there that are street smart that can destroy you by doing something as simple as logging onto the rip0ffr3p0rt site and saying false things about you and your company.

NO REAL PROTECTION
A suit is fine and winning a judgment is even better. But - for what? Millions of dollars against someone that has nothing and does not care? It does nothing to help against someone that is a street smart convicted felon that does not have anything and never will. In fact, there is no law that prevents someone for saying false things against you even after losing a suit for the same thing. You cannot stop them. All you can do is sue for damages. This is not a lesson on how to prevent it. In some ways - there is no way to protect.

DAMAGES
And the damages? How about mine as an example. After these people seeing the video and Michael Davis's website and/or the rip0ffr3p0rt site:
- Investor stopped investing with us.
- District Attorney visit
- On the news - most not true and misconstrued, no manner to 'reverse' that.
- Asked by a couple of charities I've been helping and donating to for years, to leave until it is cleaned up.
- Women I would go out with, after doing a google search, all of the sudden back away - later admitting due to video.
- Own family questions and loss of respect
- Have to ask for affidavits of former employees & investors as to 'not them' posting false statements when they just don't want 'any involvement at all'.
- Lots Of Expense fighting it.
- Have to write a blog because there is no simple way to make all he has done go away. Even with a judges order.

WHAT MADE HIM GO OFF ?
By the way... What made him do this? You have to admit - he did a LOT of bad things. WHY????? After considerable review by attorneys, staff, former staff and others hired to make sure it does not happen again?

1. We found a huge volume of letters he wrote to inmates in the Federal Prison he was at, saved on our office server in his private drive area. It detailed actions and escapades he wanted to do to others and actions he had already done. All related to other men indicating he was very attracted to men ('who knew...') That with his past reactions when I would be dating and this left probably thoughts of personal interest that was not fulfilled?

2. He did illicit bank activities that were not authorized, and most likely would send him back to prison for committing another crime.

Plenty of motive - if we had been looking.

Still no idea how to protect from it in the future, other than better background check and possibly get to know a possible employee 'better' before hiring. Meaning check out home life and maybe a series of questions put together by a psychologist to identify certain personality triats?

Has he stopped? No. We rehired a former employee back recently. He got word quickly and sent her an email of 'guess' who Chase is claiming is working at HHP again. She responded 'probably me, because I am, please do not contact me again'.

Now if he would only channel all that energy into something useful and beneficial. Some people just live for misery. I am a happy person. True - this has hurt me in many ways. But it has also made me stronger and I will endur it. Even though the average person will look at the headlines and assume it is true and never give it a second thought.

I use to think all that was in the news was factual and complete. I learned a long time ago that was not true. News would not be interesting if it was not sensational, and so half truths and out of context data and statments make for 'good news'. That is sad.

If you made it this far - thank you for hearing the other side.

Have a good life and keep an eye out - you never know who may destroy your life.

Chase Fonteno

Oh - and the legal stuff to keep suits away - The statements made here are opinions of Chase Fonteno and while believed to be based on facts, there may be items here that are not factual.

iBidEarth.com - build it and they will come... hopefully...

2011-04-09T23:15:00.000-07:00

Well - after creating, staffing and operating an entire Online Sales Dept, for Hilton Head, primarily focused on Real Estate Sales on eBay in 2007/2008 - and failed miserably, taking considerable losses, mostly being eBay Fees. So - we closed that department - for now... And began building our 'own' online site. http://www.ibidearth.com/ First - why did we fail, selling real estate on the Real Estate part of eBay - the most successful online auction site of all time? Simple - but we missed it for over a year. #1 - eBay is a consumer site, and their average sale is well under $1,000. There are just simply not enough 'consumers' on eBay willing to buy Real Estate - for CASH, particularly if it is over $3,000 to $5,000. #2 - eBay had a little hidden secret for a long time. That secret cost many people lots of fees to eBay because they (read - me/us) did not read the fine print. While a standard auction in eBay is expected to be paid for if you win - and if you don't you are sort of black-listed for being a bad guy... That is not true of Real Estate Auctions. The fine print on the Real Estate Auctions area says a sale is not a sale. It is just an indication of interest between parties (at a cost to the seller of $300 to $500 for an auction to find that 'party') and thus the buyer is 'NOT' REQUIRED TO PAY. And after 20+ sales on eBay by Buyers that did not pay and us still eating $300 to $500 per auction to eBay - we certainly believe their statement. Now - I will say that eBay has lowered their fees quite a bit. But not only is a Buyer 'not required to pay', but eBay made a release sometime ago that they do not intend to 'pursue' growing their real estate auction area as it is not their core business type. Thus... we move forward with iBidEarth.com to be The Primary Live Online Real Estate Auction Site. After we spent 100's of hours developing it in 2008, we lost our primary web programmer when we were about 90% done with the site. And when we tried to find a new web programmer that had the same direction - we did not find him before the market started to dramatically affect our real estate investment arena. So - iBidEarth unfortunately sat on the back burner while we went though re-organization. That was not a good thing - the site would have probably flourished considerably during 2009/2010's tumulous real estate market. But - it is now 2011. And we have been back hard at work on iBidEarth.com. It is up currently where you can get into it - but it is not ready for prime time. Lots of tweaking going on right now. We hope to be done tweaking and ready for an Alpha test by end of April/2011. And Beta test during May. And ready for a public debut in... June? (fingers crossed). iBidEarth.com - is powered by Izzy & Bizzy at Hamster Central Office...

Come visit - don't leave comments yet. The site is like a puzzle with lots of missing pieces. We know about almost all of the major issues and are working on them.

HOWEVER - we ARE seeking BETA TESTERS to test the site sometime in May.

Please feel free to send an email to chase@ibidearth.com if you wish to be a beta tester in May. We will not be able to pay anyone for beta testing - however - we will give you 'no fee' postings on the site for 2 years in all areas, give you a VIP pass to the Kick Off Party (expected sometime in June or July), list you as one of the Original Beta Tester on the site forever.

And for all those that already have helped get the site up - you guys rock !

Chase Fonteno

President iBidEarth.com

ARE THE GOOD TIMES COMING BACK NOW???

2010-04-04T08:43:00.000-07:00

IS IT TIME TO DUST OFF YOUR CALCULATOR AND START FINDING DEALS AGAIN?

Indicators by almost every economic modeler, forecaster and predictor, using employment trends, market movement and capital indicators are now showing - it's coming back... maybe...

Marcus & Millichap provided on April 2nd a research report showing Monthly Employment Trends showing employers added 162,000 jobs in March, the strongest gain since 2007 and revisions to the prior two months all show the labor market is transitioning to an expansion cycle. And this is expected to equate to the creation of over 1,000,000 jobs in 2010. This causing workers living in shared housing to keep expenses down during the past recession, to start finding new housing will impact the apartment housing market. (http://blog.marcusmillichap.com/)

Also, In an effort to accelerate the U.S. economic recovery, lawmakers have lined up several pieces of jobs legislation, though the impact on permanent job growth remains questionable. The jobs bill includes $38 billion in tax breaks and infrastructure spending, which could create as many as 250,000 jobs. Though the bill will accelerate the pace of hiring, many of these positions would likely have been generated without government intervention. Already, several indicators point toward an improving employment market, despite substantial caution among businesses, including a decline in first-time unemployment claims and a rise in temporary hiring. Advancing the timeline for job growth will give the broader economy a boost in the second quarter, potentially speeding up the recovery. Payroll expansion will support a larger rise in GDP and increase retail sales while easing foreclosure activity. The bill also includes $20 billion that will be infused into the cash-strapped highway trust fund, creating construction positions in time for the spring building season.

The new law will provide businesses with a tax holiday that runs through December for new hires who have been unemployed for at least 60 days and grant an additional $1,000 tax credit to the hiring firms if the employee works for at least one year. The tax break targets the 6.2 percent Social Security payroll tax and will be paid for by a crackdown on offshore tax havens and a $13 billion addition to the deficit spread out over the next three years.

Other bills currently circulating through Congress include an extension of unemployment benefits, which are scheduled to expire at the end of this month, and health insurance subsidies for the unemployed. The Build America Bond program, which subsidizes interest costs paid by local governments to borrow for construction projects, also is expected to be expanded at a cost of $7.6 billion, paving the way for additional construction jobs.

CBS News - Job Market Rebounds in March

http://www.cbsnews.com/video/watch/?id=6358496n&tag=related;photovideo

Chase Fonteno

President/CEO

Hilton Head Properties

214-712-9800

The Web of Deciet and Destruction by Michael Davis on Chase Fonteno and Hilton Head Properties - Channel 11 video and more...

2010-03-04T20:29:00.000-08:00

If you have seen the Channel 11 HHP/Fonteno video from 2009 or seen any of the 'interesting' websites on Chase Fonteno or even postings on the rip0ffr4p0rt [I won't dignify by stating the website properly] , then you need to read this!

A lesson in don't piss off an employee - the damages can be 'huge' if they don't care about their own credit or suits against them.

FACTS
These are the facts about a former employee named Michael Davis - though he has operated under many names in his activities - all after we hired him - days out of Federal Prision for Loan Fraud - in charge of our accounting and banking. [yes, I know, someone screwed up not doing a background check...]

Since April of 2009, I have been in a different world. Mostly a world created by a guy named Michael Davis. Amazing what someone can do with a criminal mind and bent on destroying someone else (and make money at it).

First - I was born Douglas Proctor, took my set fathers last name in high school 9Fonteno, and have gone by 'Chase' since 5th grade, nick name given to me by school friends. My father (step father) was a well known politician in Houston for many years - he passed away in 2008. [more on me at www.chasefonteno.com and on my father at either www.jimfonteno.com or www.en.wikipedia.org/wiki/James_Walton_Fonteno]

Hilton Head Properties [www.hiltonheadproperties.net] and its subsidary companies 'mostly' acquire large multi-million dollar distressed apartment properties from bankruptcy, lawsuits, divesture, tax sales and other manners. Which are partly renovated or what ever issues of 'distressed' that existed resolved and then re-sell - many times on an owner financed note to other investors. The company typically never acquires single family properties, but instead acquiring the mortgages on single family properties for investment income, done in a subsidary company (Hilton Head Finance)

FIRST HIRE
Sept. 2006
Michael Davis came to work for Hilton Head Properties in September, 2006 as our new Chief Financial Officer and Director on the Board. Why did we hire him? Great resume and was at the time 'supposedly' a Director of Finance at EDS. Had a great wife who was an attorney for {big public soft drink company} and a cool son named {lets say Mark to protect the young} who played hockey. He worked for a few months as the company was on the verge of doing a 506RegD State Securities Offering to raise capital. So he was a good fit with the other staff the company had.

COLON CANCER ? OR PRISON?
But a few months after he was there, before the offering came out, in Dec. 2006 - he gave me a letter of resignation. Why? He had colon cancer and was going to Houston to have surgery. I convinced him that I was going to hold his resignation aside and see how it went. Even offered part pay to stay on the Board and remaine the CFO and to review work in Houston by laptop while he was recovering. He agreed. We even threw a going away party for him with all the staff. That was a friday.

On Monday after he left, it occured to us we did not have any idea what hospital in Houston he was going to. Called his house - no answer. So I had my assistant start calling all the Hospitals in Houston (know how many there are? wow...) At the end of the day - we tried his house again (I actually had 3 employees in my office that heard this conversation on speaker). Got an answer by his 'wife'. Actual conversation:
Chase - "Hi, this is Chase at Hilton Head Properties, is this Michael's wife?"
Wife - "ummm... no, I am his girlfriend - he doesn't have a wife".
Chase - "hmmm... maybe I made a mistake, are you an attorney for {big public soft drink company} and he has a son named {Mark}?"
Wife - "no, I am an attorney that work for a company that does some legal work for {that company}, but I do not work directly for {that company} directly', and {Mark} is my son, not Michaels.
Chase - "well maybe I misunderstood about the wife part - my apologies. Michael left so quickly that we did not know what hospital he is at in Houston for his Colon Cancer"
Wife - "Oh... his problems are bigger than colon cancer..."
Chase - "oh no... is he going to make it?"
Wife - "yes, but it will take about 16 months..."
Chase - "wow... you almost sound as if he went to prison instead of the hospital"
Wife - "bingo !"
Chase - "what? are you serious?"
Wife - "he told you had colon cancer? He checked into Federal Prison for 16 months for something a prior boss did and he got into trouble for it" {ahem - he lied to her too, see later}.
Chase - "like what?"
Wife - "Before he was at EDS, he was at a small company and the President was committing fraud, and Michael found out about it - but did not tell anyone for a bit - and finally the Feds got involved. When it all came down - Michael was found guilty for not reporting, so he agreed to be a witness if they would only find him guilty for 1 count of mail fraud, which the judge gave him 16 months in the Federal Penitentiary"
Chase - "wow - that is quite different than he told us"
Wife - "well, I think he did not want anyone to know since it was really not his fault"
Chase - "thank you for your time and I am sorry to bother you"

We decided to 'accept' his letter of resignation. :) And move on.

We should have done more research, but we let it die and removed him from our website and all literature and went on.

I never wrote Michael nor contacted him. I had a few issues about him lying - but it appeared to be 'honorable' in the intent of not causing any worries at the company with staff, investors and others since he was only here a few months and no real public information other than one news release that we were hiring him. And as a private company we decided to not make a news release about his resignation.

MICHAEL DAVIS OUT OF PRISON - SECOND TIME AROUND
So the company moved on. Then, without tought, 16 months later I was contacted by Michael Davis by email asking for a website link to documents we used.

I honestly could not even remember who he was at first and had to ask HR Dept - I was advised just 'colon cancer guy'? Oh... yea...

I thought - know what - lets at lease get closure, so I met Michael for lunch, where he reiterated the same story he told his... ahem... 'wife'. I felt sorry that his life was messed up by someone else. That day will live in infamy for me... :(
We were short on a bookkeeper, and actually he did a good job for us when he was with us I thought, but could never use him for a CFO, so I agreed to hire him for bookkeeping at minimum wage (literally), in Sept, 2008.

He jumped in and appeared to really go after it. But there were times that he acted odd, even angry around the office. I did not realize till later when it was pointed out that it was when I would be 'dating' someone. And was nice again when it would end. I decided during HHP's turnaround that we needed to do two things, one was to move from our 22,000+ sqft offices on the 38 floor of One Elm Place (since we were down from 50+ employees/contractors to about 6 for now) and to raise money against our mortgage entity, Hilton Head Finance, which would require an audit of our accounts. The latter issue seemed to make Michael Davis nervous, but I did not relate the issue.

So, we moved Hilton Head Properties to the penthouse of the Hartford Building, 400 N St Paul (14th floor). Really nice offices, but about 1/2 the space and 1/3 the rent. Room to grow also. Odd, when we moved in the first week of May - Michael never showed up. Would not even answer phone calls. Just 'gone'.

ALL HELL HIT...
1. We started noticing that former employees and investors were posting false information on us on a scam site called 'therip0ffr4p0rt'. Lots of postings. After talking to the former employees, they stated not only did then not post it, but they would sign affidavits they did not - which we now have. That site has amazing search engine abilities to show up always on the first page of any search that has a word in it. Can't sue them and they will not remove false info - even under a judges order. They operate under a federal law called 'the internet decency act'. Only, it is indecent what they have done to good people, including HHP. But 'lots' of individuals and companies. I have read horror stories how this guy gets paid tons of cash to 'soften' the blow (he use to remove data for a large fee - but he is now in trouble over that - for fraud & rackateering. So - it will 'never' go away. :( [more on this below as to 'really' what happened]

2. We had our mail forwarded from the old office to the new one. Shortly thereafter, my assistant received bank mail showing that a credit card was taken out on one of the associate companies, and Michael Davis was listed as the 'President', and had personally used approx. $9,500 of the line of credit. Loan fraud? (again, did not know the truth about his background yet).

3. Within a week of moving into our new offices, the Dallas District Attorney contacted us claiming that we were being 'reviewed' about a complaint of real estate fraud. Huh? So we cooperated, gave them requested documents and followed up 'very' often sending over more documents without them even requesting to ensure they had a full picture of what we do. We were advised they had received some documents and notes from Michael Davis. I don't think they were aware of Michael's real background either. They never say 'its over'. But we never heard another word - that was June/2009.

4. During the 'same week' that the District Attorney arrived in our office - we were contacted by Channel 11 wanting to do a story on 'something' as they would not say. And they would not discuss it at all - 'except on camera'. That was their constant request 'on camera interview'. Two fathers in politics have taught me - do not talk to the press unless you know exactly what is going on. So I did not. They did say they understood I and the company were under investigation by the DA. I and my attorneys responded to Channel 11 by email 'guessing' what they were doing a story on. We hit it on both counts. They pursued a story for about 1 1/2 months. Then they advised they were going to do a story without my statement. Fortunately they used the emails - but only the parts they wanted to. The guy behind the screen? Michael Davis. LOTS of 'false' information, 'misleading' information and even reviewing documents we do not use and have not used since 2004 or 2005. And 'we don't sell homes'. Ever. We purchase notes. Oddly - the story was about one property (Cecila Landis) that a guy named Mike acquired the property in his company and sold to a family for $500 down, no credit check and no payments for a number of months - but they had to fix the property themselves. Later Hilton Head Finance purchased the note from Mike. But HHF 'guaranteed' their title when the note was purchased as the holder of the note. But - when they were delinquent in their payments for many months and notice of foreclosure was sent - they got an attorney who noticed an issue in the contract - an issue we agreed was a problem - so... we 'gave' that property to the Landis - with only two terms of agreement. One - they would assume the delinquent property taxes. And Two - we no longer would guarantee the advserse title issue. A deal that was done by 'their' attorneys. We agreed - and it was done - over 3 years ago ! So... what are they complaining about the 'repairs'? And a family showing up years later (a family that left the house to rot, not pay taxes, blight on the neighborhood and danger to the children in the area - which was turned into a home for someone willing to fix it and pay taxes?) No idea why this property was brought up. And that was a news story over 9 months ago. Not another word. Just slander/libel. Not our property. No mortgage to us.

The others? All I know now, is that they all are related and purchased property all at the same time from either the Sterling, GP or BP companies - not our company. We later purchased the notes. They purchased with $200 to $500 down, no credit check and no payments for several months to get the properties repaired. We purchased the notes before their first payment was due. They never did any repairs nor made any payments. And we never heard another word. We sent out notices to cancel their agreement and give them a refund so the property could be sold back to the company we got the note from - but never heard a word. So we later foreclosed. Not sure 'what' was going on there. Then we returned the properties back to the parties that sold the notes to us for a credit. Why did they 'know' Hilton Head and blame us? It appears they were visited by 'some guy' that advised them HHP and Chase defrauded them. Guessing the 'guy' was Michael Davis considering all else he did.

Why did the news and the DA take action as they did? We later found out that each was advised by 'Michael Davis' that the other was doing an investigation. (ie. DA advised Channel 11 doing investigation and vice versa). Verifying one another provided motivation - and Michael Davis provided the fuel - even if it was a bit misleading and out of context.

ITEMS IN THE NEWS STORY - REAL TRUTH...
a. I do have a stock brokerage violation from 1995. It is disclosed to 'everyone' always. New employees, charities I sit on board/committees, investors, partners, banks, hard money lenders, wall street, brokers - everyone. It is even disclosed to anyone I ever date within the first few dates. Not exactly 'hidden info'. The violation? I was new to securities on the issuance side and violated a disclosure requirement I was unaware of. I received probation for the violation, with a right to travel almost anywhere and requirement to pay any damages. And I am NOT on any supervision or anything else. That was over a long time ago. False statement entirely.

b. Hilton Head Properties and Hilton Head Finance have 'never' during its existence purchase 'any' single family homes or acquired any adverse possession homes. We 'did' rent space to over 40 investors that would acquire homes by many means, including tax sales, bankruptcy, foreclosure, judgment lien sales, auctions and more - including Texas Statute adverse possession. The 'vast' majority of 100's of mortgages we acquired were from properties the investor 'purchased' by these means.
This story was about the 'few' that no owners could be found by the investor. Dallas has over 2,000 abandon, boarded up home, many of which the owners are dead and no heirs exist that can be found. The County/City/School District have so many delinquent tax properties that it takes 'many' years to finally foreclose on these (some we have seen have over 20 years back taxes). And the City is 'backlogged' in tearing homes down and it will typicall 'years' to get to them to tear it down. Some of the parties we purchased mortgages from started the legal process defined in Texas Statutes for adverse possession to acquire them so families that are tired of renting could buy a home for $500 down and $300 monthly with no credit check and fix it themselves. We agreed to acquire 'some' of these 'adverse' possession notes - of which the company has approximately 30 active adverse possession notes. However the documents provide the the holder of the note had to 'guarantee' title to them, or provide them a nicer home. Hilton Head has a 'golden rule' which is 'very' prominent on our website, and always has been for years - which the news apparently 'intentionally' failed to show (considering they anaylzed the site and it was on the front page?)(www.hiltonheadproperties.net) which states the ethics that the company operates under and also the terms of guarantee to all home owners and in particularly the ethics we operate under towards both the buyer and 'heir apparent' of an adverse property we hold a note on, and in fact the company has acted on that guarantee a number of times. And even been reviewed by several Attorney Generals with no demands further action warranted.

The investors that acquire properties and sell them to individuals, which the company many times acquires the mortgage on - have now been advised 'while we want to help the community rid itself of blighted properties and provide homes to those wanting to get out of slum properties - the image of what you are doing and our involvement of purchasing notes on adverse possession properties is damaging our credability because of Channel 11 and the local agencies, and therefore we cannot acquire any further adverse mortgages. We are sorry.
Chase Fonteno, President
.

c. Name not on anything? I sign for 'everything' for HHP, HHF and all affiliated companies. Not sure even IBM has the president's name personally on everything. This is a 'corporation' that has over $3mil invested in it by investors and has over 130 shareholders. The 'company's name should be on everything - not mine personally. Why were checks in my name? No Idea. All mortgages are owned by Hilton Head Finance. All payments go to Hilton Head Finance. I have seen 'many' payments made incorrectly to former owners of the notes, to the name of the sales person, even a few times to our bi-lingual assistant. ALL are stamped Hilton Head Finance and deposited in HHF's account for proper credit and accounting. And we are currently doing a massive audit of HHF for a very large securities offering. Think if there was some impropriety that we would be doing a securities 'audit'? What people will do to report 1/2 the story and put it out of context to get a more sensational story.

d. This blog as 'real estate catburglar' being identified as 'teaching others' how to 'really' steal real estate. This site gave advice on how to deal with vacant, abandon, tax delinquent property that is a blight on society a danger to the children living near it and a haven for drug dealers and bums. And it was characterized as 'bad'?

5. Once the news story was out - it was copied approximately 50 times to websites all over the world - mostly with a title of 'Chase Sucks'. Michael Davis usually appearing as the poster or enough information posted to know it was him. Again - putting text around the new story that was neither in the story nor true.

6. Actual 'news stories' started getting posted all over the internet - anywhere he could get the ability to post a 'free' news story. Wild stories - all completely slander and false information - which fortunately over a period of 4 months almost all news services read and agreed to delete as it was not news, but a slander attack.

7. chase-fonteno.com - Michael Davis most creative effort outside of convincing Channel 11 to do a story construing many facts. This website is interesting in that it takes 'some' facts and creates an image that far exceeds reality. And he uses 'things' he created elsewhere in the internet to support it.

8. Davis started posting on the internet in facebook, twitter and by email the company's bank balances, did it regularly for several months to prove he could use inside information he obtained to hack into our bank accounts - even using that information to transfer funds to a bank account he managed. We had to get 'new' account numbers for 'every' account (over 30) in the end to finally stop him.

9. Davis hacked my personal twitter and facebook account (he had enough info on me to get in and change both the email and the password to take full control. Fortunately facebook returned control very quickly (a week). But twitter? 3 months since they do not really have a staff and take request for review and action as they can. He posted on both sites, which went to my family, investors, employees, financiers, etc. mostly things indicating I was gay. While I completely respect the gay community, I am as far from gay as you get. Control was finally given back by the site company and changed back.

10. I have been recieving numerous 'gay' magazines and other paraphernalia at my office and home - all ordered under my name, using an american express card that we are told by those companies that does not allow a charge. No idea, but it is not my credit card.

11. Letter written to my mother, brother and some friends and investors from 'anonymous' making false claims about me.

12. My cell phone, power and other services were oddly turned off at times - always being told it was 'Chase Fonteno' that called in the cancellation. I did not.

There is more... but it is more of the same.

LAWSUIT - ANY GOOD?
So, HHP & I sued for slander, libel, defamation of character, dispargment, tortious interference,
http://www.hiltonheadproperties.net/legal/michaelrdavis_slandersuit.htm

http://www.hiltonheadproperties.net/legal/michaelrdavis_fraudsuit.htm

We won on BOTH suits as to his actions, by default, but had to prove up some of the evidence as to the restraing order we got against Michael Davis. We now go to court in April and May to plead for the damages.

WILL THE REAL MICHAEL DAVIS PLEASE STAND UP
In the suits - we learned the REAL background of Michael Ray Davis. There was never a 'boss' that took advantage of him or got him into trouble. Davis applied for loans (cars, cash, house, etc.) by stating false information. He went to jail for loan fraud.

His 'work' at EDS? It was based on his employment at several 'other' large companies. It appears all of those were not true. So even EDS hired without proper checks. And when we hired him? During 'the' week, or the 'week after' he was found out due to the federal indictment on him for loan fraud. So - we 'did' technically hire him from EDS. But we did not do the amount of checking we do now.

For all you in la la land, or hoping to build a business, or already running a business - this can happen to you. There are people out there that are street smart that can destroy you by doing something as simple as logging onto the rip0ffr3p0rt site and saying false things about you and your company.

NO REAL PROTECTION
A suit is fine and winning a judgment is even better. But - for what? Millions of dollars against someone that has nothing and does not care? It does nothing to help against someone that is a street smart convicted felon that does not have anything and never will. In fact, there is no law that prevents someone for saying false things against you even after losing a suit for the same thing. You cannot stop them. All you can do is sue for damages. This is not a lesson on how to prevent it. In some ways - there is no way to protect.

DAMAGES
And the damages? How about mine as an example. After these people seeing the video and Michael Davis's website and/or the rip0ffr3p0rt site:
- Investor stopped investing with us.
- District Attorney visit
- On the news - most not true and misconstrued, no manner to 'reverse' that.
- Asked by a couple of charities I've been helping and donating to for years, to leave until it is cleaned up.
- Women I would go out with, after doing a google search, all of the sudden back away - later admitting due to video.
- Own family questions and loss of respect
- Have to ask for affidavits of former employees & investors as to 'not them' posting false statements when they just don't want 'any involvement at all'.
- Lots Of Expense fighting it.
- Have to write a blog because there is no simple way to make all he has done go away. Even with a judges order.

WHAT MADE HIM GO OFF ?
By the way... What made him do this? You have to admit - he did a LOT of bad things. WHY????? After considerable review by attorneys, staff, former staff and others hired to make sure it does not happen again?

1. We found a huge volume of letters he wrote to inmates in the Federal Prison he was at, saved on our office server in his private drive area. It detailed actions and escapades he wanted to do to others and actions he had already done. All related to other men indicating he was very attracted to men ('who knew...') That with his past reactions when I would be dating and this left probably thoughts of personal interest that was not fulfilled?

2. He did illicit bank activities that were not authorized, and most likely would send him back to prison for committing another crime.

Plenty of motive - if we had been looking.

Still no idea how to protect from it in the future, other than better background check and possibly get to know a possible employee 'better' before hiring. Meaning check out home life and maybe a series of questions put together by a psychologist to identify certain personality triats?

Has he stopped? No. We rehired a former employee back recently. He got word quickly and sent her an email of 'guess' who Chase is claiming is working at HHP again. She responded 'probably me, because I am, please do not contact me again'.

Now if he would only channel all that energy into something useful and beneficial. Some people just live for misery. I am a happy person. True - this has hurt me in many ways. But it has also made me stronger and I will endur it. Even though the average person will look at the headlines and assume it is true and never give it a second thought.

I use to think all that was in the news was factual and complete. I learned a long time ago that was not true. News would not be interesting if it was not sensational, and so half truths and out of context data and statments make for 'good news'. That is sad.

If you made it this far - thank you for hearing the other side.

Have a good life and keep an eye out - you never know who may destroy your life.

Chase Fonteno

Oh - and the legal stuff to keep suits away - The statements made here are opinions of Chase Fonteno and while believed to be based on facts, there may be items here that are not factual.

HUD Announces $2 Billion for Neighborhoods...

2010-01-17T11:20:00.000-08:00

U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced today that HUD is awarding $2 billion in Recovery Act funding to states, local governments and non-profit housing developers, under HUD’s Neighborhood Stabilization Program (NSP), to spur economic development in hard-hit communities and create jobs. Nearly 60 grantees are receiving awards. A full list of grants awarded today can be found on HUD’s Recovery Act website.
http://portal.hud.gov/portal/page/portal/HUD/documents/nsp2grantchartandsummaries.doc

Funded through the American Recovery and Reinvestment Act, this round of NSP grants is being awarded competitively to applicants who developed the most innovative ideas to rebuild local communities, while demonstrating that they have the capacity to be responsible stewards of taxpayer dollars.

“By investing Recovery Act dollars in revitalizing hard-hit neighborhoods, we’re not only creating new job opportunities, but giving communities across the country an opportunity for a fresh start,” said Vice President Biden. “These competitive awards go to the heart of the Recovery Act: funding innovative projects that both provide immediate relief and help lay a new foundation for long-term economic growth.”

“Vacant homes have a debilitating effect on neighborhoods and often lead to reduced property values, blight, and neighborhood decay,” said Donovan. “This additional $2 billion in Recovery Act funding will help stabilize hard hit communities by turning vacant homes into affordable housing opportunities. The Neighborhood Stabilization program is a key part of the Obama Administration’s comprehensive approach to address the national housing and economic crisis.”

To learn more about the story of the Recovery Act, visit www.WhiteHouse.gov/Recovery. To follow Recovery Act dollars, visit www.Recovery.gov.

HUD and FHA allow flipping for 1 year !

2010-01-17T11:11:00.001-08:00

HUD and FHA announced on January 15, 2010, that they are rescinding for 12 months, the 90-day anti-flipping rule to help foreclosure efforts and stablize home values.

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-011

Hilton Head Properties & 'Chase' D. Fonteno Awarded Over $2.4 Million By Late Nite Jury

2009-07-21T23:56:00.000-07:00

After Two Weeks of Trial, Hilton Head Properties and 'Chase' D. Fonteno, at 10pm on Friday July 17th Were Awarded Over $2.4 million by a Dallas Jury Against MacGyver Finance

Jury Award Also Effectively Proved Statements Made On Slander Site 'Ripoffreport' Were Not True

Hilton Head Properties Taps Robert Young as New CFO

2009-07-15T22:04:00.001-07:00

As HHP prepares its Hilton Head Finance subsidary for a large public debt offering, it taped Robert Young for a second term as CFO

Interesting News Story - a bit one sided...

2009-07-02T20:57:00.000-07:00

Well... interesting news story tonite. Quite a bit one sided - but if it was not sensationalism, it would not be interesting...

Channel 11 tried to approach me for over 3 weeks and refused to talk to me except on camera - seeking sensationalism. They would not even advise me or our attorneys what the story was about. Even so - our company provided a number of emails to Channel 11 advising that 'adverse properties' represent a very small part of the company's mortgages. And the company's process is to help turn blighted neighborhoods of vacant, abandon, drug infested, tax delinquent properties by adverse possession into owner occupied homes - for $250 to $325/mo.

Even though the reporter was provided 'considerable' information about adverse possession and the fact we have not purchase a mortgage that was related to an adverse possession in a number of years - the information and that fact were not addressed.

Our company has NEVER acquired a single family property. We purchase mortgages by outside sellers (the associates). The company in which the news story states we 'own' is actually Silverwest Properties - a company owned by Wes Gilliland - the rogue party that we stopped doing business with in 2005 due to horrendous title work done by his company. We purchase mortgages - not homes. And the mortgage servicing company we own - Hilton Head Finance manages a considerable number of mortgages - most of which are not adverse possession.

And the 'anonymous' former employee? Well - not to have issues with slander or libel, a quite educated guess by other employees (and myself) - that would be Michael Davis - who we recently became aware that when we hired him - it was apparently just weeks after he left Federal Prison for 'fraud'. And as of yesterday it 'appears' by bank records our CFO just received - he has fraudulently applied for loans and gotten them under at least one of the associates companies - without any authority of the associate that owns the company. The associate (B. Payne) was made aware of it today and he advised he never authorized 'anyone' to obtain a $9,000 loan against his company (which the bank advised today - Davis signed up for and has now taken the entire loan down without notice to anyone). Payne has advised he is contacting the District Attorney's office for fraud.

As our company made a determination to hire Bob Young back as our CFO about a month ago - in preparation for a large financing the company is undergoing. This appeared to set Michael Davis off - and he began a reign of terror including negative statements to our bank, constant false statements on Twitter and false statements on Ripoff Report (using false names - but admitting it on phone calls to me) and possibly making statements to various state officials that are 'not the full truth'.

Now we know why - a new CFO taking over the accounting oversight from Mr Davis would (and did) uncover the fraudulent loans.

My background of an error I did in 1995 that ended up being a securities violation is a very public thing - because I tell everyone (friend, employee, associate... everyone). It prevents 'gossip'.

As to adverse possession - once we acquired the mortgages, there are considerable liabilities to the company to ensure the homeowners actually get the home - or we have to provide them a home of equal or greater value and better repair status - and we HAVE done that already. We also have just given mortgages to heirs that popped up YEARS later (even though they did not pay property taxes for 2-20 years, did not keep the property in repair status to meet minimum city health codes or even just mow the lawn and keep the property secured.) - We have also purchased a few homes from heirs - always ensuring that the home owners either get title - or get a better home.

Cities and Counties only have so many people to deal with abandon, distressed, tax delinquent, code violation type properties that are a blight on neighborhoods, their values and even the safety of neighborhood children when a property is an open vacant structure (a violation of city code). There are 1,000's of them in almost every major city. More than the City/County can handle by foreclosure (taxes) or demolition (code violations). A drive down just about ANY street in South Dallas - just ONE STREET from beginning to end - you can list over 30 boarded up, abandon homes. Our work in blighted areas of a number of cities - helps convert blighted homes into owner occupied homes. Most by acquisition from the owners by the associate companies - which they then sell on owner financed notes - but under guidelines they have to meet - IF they want us to purchase them. (they own their own companies and can do what the wish - but if not under the guidelines we require - we will not purchase). Then - we purchase the notes and manage them for the entire term of the note - since these individuals AND homes - both - usually cannot qualify for a normal loan. So we help them own a home - just by proving they have a 'real' job (to eliminate drug dealers buying homes).

More on this later.

And we are currently preparing for an audit for a large securities offering we are doing to grow the program into more cities and pay any remaining delinquent taxes. And adverse possession? We have not acquired any new mortgages that are based on adverse possession in over 2 years. And do not have any current plans to do any either - they are expensive due to the prospect of litigation and normal purchases are simply more profitable.

Feel free to contact our company or me anytime you wish. Our office moved about a month ago to:
400 N. St Paul
14th Floor
Dallas, TX 75201

Our phone numbers did not change
214-712-9800
chase@hiltonheadproperties.net
http://www.hiltonheadproperties.net

How To Own Real Estate - Name On Title

2009-02-01T13:21:00.000-08:00

How to Own Real Estate - Name On Title

A few lessons for the new Real Estate Investor:

A. Never Own Real Estate in your personal name: Real Estate Ownership comes with some liabilities:

Someone can get hurt on it (even if they were not suppose to be on the property). It could even be a bum that was not suppose to be on the property, drunk, fell and broke his arm - and he sues "you". Or even a real estate agent that falls due to a loose brick... You need your name clean always to ensure your credit rating stays high so you can borrow to build your real estate portfolio.
Or, if someone sues you for some reason, placing the properties you use in a separate entity helps protect them from outside suits.
As much as you believe in a deal as being risk free or easy profits - Real Estate deals do not 'always' go right. You need to provide some protections on your name if this happens so it does not destroy your ability to get back on your feet and do the next deal right. Keep it out of your personal name.

B. It is Better To Own Real Estate in a Corporate or LLC entity: Build protections between you and the liabilities of real estate.

Holding your investment/rental properties in a Corporate or LLC entity helps protect both you and your property. And it is a good idea to NOT use your name in the name of the entity (like Bob Smith Real Estate) is not a good idea as it makes it easy for someone suing to just name you personally. Do not make suits easy. Give the company a name not using your name. They will have to do some research to find your name and thus less likely to include you in a suit.

Even if you have insurance and other protections - being named in a suit 'automatically' will cost you money - even if you win - because you had to hire an attorney to defend the part about it being you personally.

C. If the property is large - hold it in a separate entity from the other properties:

If the property you intend to own is a large apartment complex or commercial property, it is better to own it in its own entity to:

Handle the staff payroll separately and taxation on such.
Handle any investor investment easier as not being part of other deals.
Easier to handle any lawsuits and protecting other assets from such lawsuit.
Easier to identify the performance of the property to outside parties.
Cleaner sale when property is sold, where the financials are not merged with other properties.

Feel free to post questions if you have any, or click on my email at http://www.chasefonteno.com/

'Chase' D. Fonteno
President
Hilton Head Properties, Inc.
1401 Elm St., Suite 3800 Dallas, TX 75202
214-712-9800
214-712-9801 fax

http://www.hiltonheadproperties.net/
http://www.hiltonheadpathways.com/
http://www.sterlingworldpartners.com/
http://www.luxuryhomemanagers.com/
http://www.ibidearth.com/
http://activerain.com/hiltonhead/

All statements in this blog are the personal opinions of "Chase" D. Fonteno

Chase Fonteno

Sub-prime crash era opportunities

2008-02-11T22:42:00.000-08:00

Before I start let me say two things. 1. I have never posted a blog before... this is absolutely the first. 2. I am NOT selling ANYTHING HERE. I do very well for myself and it won't hurt me a bit if you did the same thing I do - and even competed against me on some deals. Somewhere - if this information motivates you - we will probably do something together... almost every one I have ever told how to do this has ended up doing some form of a deal with me, or we traded ideas - so we both win. And it appears a blog is a great way to do that on a larger scale...

So...

While continuous hysteria over the sub-prime crash continues to drag on... there exist opportunities in a segment of real estate investing that in 30 years has never seen a down market and actually, if you invest properly, has a considerable upside during the current sub-prime debacle. What sector is that? That is better answered with a few questions...

What type of property 'always' goes up in value?

What type of property - if you sell and have to foreclose - is 'always' in better condition when you get it back, than it was when you sold it?

What type of property regularly confuses the pros as to its true value (literally leaving real estate professionals giving values assessments that often are over 300% from one another)?

It is the property - you steal ! (legally and ethically of course...)

But wait... you are probably thinking $100,000+ homes? expensive apartment complexes? land? nope... I am talking about property you would never want to 'ever' show your friends and family... its ugly... it is bad... forgotten... but, it will keep you buying your friends and families dinners forever - so let them envy... just don't show them photos...

Oh - and we don't fix ANYTHING !! EVER !

Would you believe me if I told you that in 2 short years I acquired approximately $7 million in real estate for approx. $1.5 million, used only about $10,000 of my own money - oh and...
I never went out and borrowed any money to do it?
But I do have a lender... he just does not know my name...
I never applied for a loan... I never asked for the money...
I never talked to anyone to get it...
And the terms of the loan are what ever I want them to be - each month...

We acquire abandon, forgotten homes (in large quantities now) all over the country - in low income areas. Why low income? Scary? Well hold on. Lets see... what real estate agent would want to sell homes in the $20,000 to $40,000 range when they can be in a nicer area of town and sell the same quantity of homes - but they are in the $100,000 to $200,000 range (or higher) ? Well - that presents a problem for low income areas. You see - appraisals are done by appraisers who depend LARGELY on comparable property sales values on MLS (Multiple Listing Service) used by all agents to list properties and announce the final sale price. If there are no agents doing business in a particular area - what is the value? You think I am kidding? I most certainly am not. In fact there have been times I ask other dealers I know, if they are selling their house in a low income area - even if they already have a buyer - to proceed to list it anyway with an agent and pay a low commission - just to have it reported on MLS to help with comps when I am trying to do financings. And I do the same for them at times.

Ok - so lets take a typical low income neighborhood home... 3 bdrm, 1 bath, no garage, 1,200 sqft. Delinquent property taxes of ? $3,000 that is probably 7+ years (no, I ma not kidding). If it is boarded up, chances are the owner died and his children had no money to pay taxes or repairs - so they just left it and finally the city boarded it up to keep vagrants out of the area. So values? Buy it for ? $5,000. Paying the Seller $2,000 (on a note of course with $300 down and $100 month - he's happy, he was going to lose the property anyway to taxes) Real value? maybe $10k to $15k as is. Needs broken windows replaced, exterior scraped and painted, new front door, roof repairs, plumbing repairs, elect. repairs, etc... But of course we are not doing to do any of those... And when the work "is" done (by someone else) the property is worth ?? $45k to $55k. So, we well it on an owner financed note - $500 down, fix it yourself. No credit check - your job is your credit. And prove you have the money to pay for materials and you have the ability to do the work yourself. (did I just turn a buyer into a rehabber?)

Now - at $500 down, $350 month, no credit check, owner financed, fix it yourself. Trust me - they will beat down your door to finally own a home and quit renting...

So - you just paid out $300 to buy it and $100 month (for? 12 months?) [then you start paying on the delinquent taxes every month of $100/mo until paid - 35 months?].
You sold it for $500 down and $350 monthly (for ? 15 years?).
You just cleared money up front... and make $250/mo for 4 months - then you get a raise (purchase note and delinquent taxes paid off) to $350/mo.

Oh - and since they are 'buyers' and not renters - they pay the current taxes as they come due. They pay repairs. They pay utilities. They pay insurance. AND - they pay you.

If they do not pay as required - well... you foreclose (give them some leeway - maybe 6 months of delinquency before you foreclose. Don't forget 'they' renovated that home. At foreclosure, 99% of the time you end up with a home in 'much' better condition than when you sold it the first time. Why? It was un-livable at first and the buyers cleaned, repaired and made it livable... now you have a better home... and you do what? Sell it for more money the 2nd time. Usually $5k to $15k more.

Now that means I acquired a home for $5,000 and sold it for ?$30,000 and maybe gave the owner $2,000 in a Home Depot or Lowe's credit card. That 'equity of $25,000 you just created along with a 15 year payment of $250/#350 (10% to 11% owner financed note rate) is a pretty substantial prize - and the guy in the house is only too happy you sold him his first home - which he must work on before he can live in it

Yea - you are doing the match. 5 years (60 months) of payments of $250.00 and the balance of 10 years (120 months) at $350.00 is $57,000 in total payments (this includes the interest).

So - if you did that just 30 times (I did 60 in one year), you would have an income of between $7,500/mo to $10,500/mo. And once you are there - you do not work for it anymore and it comes in for 15 to 30 years.

Oh - and no affect by the Sub-prime era issues... other than... lower prices to us to buy In fact - subprime crash is quite an opportunity to learn.

So quick math again... If you buy for $350 down. And sell on $500 down. And time frame between buy and sell is less than 30 days (very typical) - and you are clearing $3,000 a year ($250/mo) - what is the rate of return? Kind of hard to figure since you only had your investment in the property for less than 30 days... but lets use the $350 you paid down. And you are earning $3,000/yr. That is a 857% annual return on your investment (at the $250 net per month).

Guaranteed. Or you resell the house. For more money. And you are investing in the stock market why???

And if delinquent taxes are your financing source - do you really need capital financing?

Oh - and when sub-prime crashed, lots of those that do sub-prime deals with 'bank' financing lost their way of being able to do those deals...

More for you...

Time to change your strategy...

Feel free to post questions if you have any, or click on my email at http://www.chasefonteno.com/

All statements in this blog are the personal opinions of "Chase" D. Fonteno

Chase Fonteno