From Crisis to Comeback to Saving Homes and Changing Lives with Michael Russell

A Wake-Up Call in the World of Housing Struggles

In an emotionally gripping episode of The REI Agent Podcast, host Mattias Clymer sits down with the deeply passionate and battle-tested Michael Russell.

A seasoned real estate professional turned nonprofit warrior, Michael is on a mission to prevent foreclosure and empower families through his organization Hope4Hardship.

This episode isn’t just another real estate chat—it’s a raw, truth-packed journey into the heart of personal redemption, financial crisis, and the power of persistence.

“No bank in America wants to foreclose. No homeowner wants to be foreclosed on.”

That single quote sets the tone for a powerful conversation that peels back the emotional and financial layers of America’s housing issues—while offering practical, actionable hope.

The Silent Struggles Behind the Mortgage Statements

Mattias opens up about his own brush with financial chaos, sharing a candid story about a simple automatic payment error that nearly torpedoed his credit score—and almost cost him a lucrative mortgage refinance.

“We have multiple mortgages, little kids, and a crazy life… and we didn’t even notice the payment didn’t go through.”

His vulnerability paves the way for a broader message: life happens, and if you don’t advocate for yourself, the system won’t.

The takeaway?

Get a little squeaky. Fight for your financial future, even when it’s uncomfortable.

Meet Michael Russell: Foreclosure Fighter with a Mission

From running his family’s Century 21 franchise to being forced into bankruptcy during the 2008 crash, Michael Russell has seen it all—and felt it all. His scars turned into strategy.

What followed was the founding of Hope4Hardship, a nonprofit laser-focused on helping struggling homeowners in the Northeast avoid foreclosure.

“I just figured the best thing I can do with that knowledge is pay it forward to the next man or woman.”

He dives deep into the bureaucracy of mortgage assistance—explaining how banks can help, but most people don’t know how to ask, or are too emotionally overwhelmed to even try.

Why Real Estate Agents Must Wake Up and Grow Up

Michael doesn’t mince words when talking about agents who inflated their lifestyles during the pandemic boom.

“The COVID real estate starter pack was a leased white Range Rover and some red bottom shoes.”

It’s a moment of comedic relief packed with real wisdom. If you’re riding the highs without preparing for the lows, you’re setting yourself up for disaster.

The lesson? 

Live within your means. Consistency beats glamour. Long-term wealth beats short-term applause.

The Truth About Wholesaling—and Why Integrity Matters

One of the boldest parts of the interview comes when Mattias and Michael both take a hard stance against wholesaling while holding a real estate license.

The message is loud and clear:

“It’s impossible to hold the sanctity of a real estate license and be a wholesaler. It’s simply not possible.”

If your goal is to serve, not manipulate, then every action—even profitable ones—must be filtered through integrity and long-term vision.

They challenge agents to resist the temptation of short-term cash grabs and commit instead to deep, loyal service.

When Helping Others Becomes a Calling

Michael’s work is gritty. It’s emotionally draining. It’s layered with setbacks and clients who don’t always stay on track.

But when it works—when families get to stay in their homes—the payoff is immeasurable.

“If half the people I work with can save their home and stay in their home and keep their family… then hey man, that’s winning.”

His faith in the human spirit—and the power of second chances—is unwavering. It’s not about being a savior. It’s about being a guide for those who’ve lost their way.

Real Wealth Is Helping People Rise

This episode is more than a podcast. It’s a rallying cry for real estate agents, investors, and anyone with a beating heart to look deeper into the industry’s potential for good.

Whether it’s through direct service, financial literacy, or simply picking up the phone to advocate for someone, the opportunity to make a difference is in front of us.

“You can’t fake shared struggle. That’s the one thing in life that always stays real.”

Michael Russell reminds us all that success means nothing if we don’t use it to lift others.

This episode is for every listener who’s ever hit rock bottom—or is helping someone else climb out of it.

And it’s proof that the real return on investment is impact.

Transcript

[Mattias]
Welcome to the REI Agent, a holistic approach to life through real estate. I’m Mattias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent, Mattias here. I just had the privilege of interviewing Michael Russell. He is dedicating, he started a non-profit and he’s dedicating a lot of his time to helping people avoid foreclosure.

And as we were talking, I didn’t bring up this story because I wanted to make sure we got everything that he wanted to say out. But I was thinking in my head about how we kind of went through a similar process, not foreclosure, but he was talking about basically you need to go to the bank to try to work this out. So you need to kind of go through the processes with the bank to try to avoid foreclosure.

And he goes into more detail. I won’t get into that now on this podcast. But what happened with us was we actually had our mortgage get sold, which is common.

But what was interesting about this one was before it got sold, before the last payment went out, they cut off our automatic payment. And so our automatic payment cut off and we have multiple mortgages and we have a crazy life with little kids and all this other stuff that we didn’t notice that this happened. And so we missed the payment and then it got sold.

And before it got sold, it got reported to our credit bureau. Fast forward, like maybe a month, we were trying to get a new mortgage, a cash out refinance on a property. And we’re like, wait a minute, wait a minute.

Why is our credit so low? And then we kind of pieced it all together and I reached out to the bank, the first bank, figured out that they were the ones that reported to the credit bureau, it wasn’t the new bank. And so we reached out and we said, hey, look what happened here.

And they’re just like, yeah, you missed a payment. You’re way default, so it’s your fault, blah, blah, blah. And I just kind of calmly explained what happened.

And they’re like, finally, after I kind of spoke to the person, I was just like, I realize probably most people that call about this are probably just trying to get away with something. And you probably have to deal with a lot of people that are at fault but wanna get away with something. And I’m just like, this circumstance is a little different.

Can you see if you all turned off the automatic payment for me? And they confirmed that they did. And I just said, look, I’m sorry that this happened, but we just didn’t realize.

We set up automatic payments because our life is crazy and we wouldn’t miss payments if we didn’t have that luxury in place. We would have paid this had that never been done. And so it’s like, yeah, yeah, I can see.

You would have gotten some mail that would have said that you’re behind, but people get a lot of mail, so it probably just looked like junk, whatever. It’s like, yeah, that’s probably true. And so he’s like, well, you gotta follow this process.

You gotta upload the document, like a letter. You gotta upload documents, whatever, to this portal. And then you gotta wait.

And I’m thinking, okay, I can’t wait that long. We’re trying to get this mortgage in place. Meanwhile, I start getting a bunch of news, like clickbait-y articles come across my feed saying that mortgage rates are gonna be the highest they’ve ever been.

And I’m thinking, okay, so right now, if I get a mortgage with my lower interest rate or with my lower credit score, the interest rate’s gonna be already significantly higher if rates go up higher yet. If they start increasing, then it’s gonna cost me a lot of money over the long period of time. So I start kinda getting a little bit antsy about this.

I had waited about a week, and so I called back, and the lady’s just like, we can’t help you. You gotta wait. And I just said, hey, can you talk to a supervisor to see if they can help us a little bit more?

And so she did, and she came back to, hey, we really can’t help you. You’re just gonna have to wait. So I just, at that point, said, look, can you tell her again that this error is on your end, and I have potentially thousands of dollars at stake here?

Could be, if you look at the course of the loan, it could be tens of thousands of dollars, right? I really need to talk to, I need this resolved ASAP, or I’m gonna have to talk to a lawyer. And she’s like, well, do you wanna tell her that yourself?

I’m like, you wanna speak to a manager? Like, yes, let’s do that, please. And I’ve worked customer service jobs, and I didn’t wanna be disrespectful, and I hate that I had to even go to this extent to talk to somebody that could help me.

But again, I was serious. I was gonna speak to an attorney if I needed to get resolution somehow, if they needed to buy down my rate so I could lock it for their error. Again, speaking calmly and politely to the representatives.

So the manager came on, I explained everything, and she said, I’m gonna check in with the team and see if there’s anything we can do. And so she did, and then she’s like, we kind of moved you up, but it might still take a couple business days for it to be cleared, and then it’s gonna take another five or so business days for them to clear the credit report. I’m like, okay, thank you for helping.

So I get off the phone, in an hour, I get a notice that says that it’s been removed, they’ve removed it from the credit report, so everything’s done. But again, it could still take time for the credit reports to update. So I actually had a mortgage buddy friend pull my credit and found that everything was gone, except for there was one little, one of the credit bureaus had still a, it hadn’t fully risen up back to what it should be, and it just kind of said that there was a recent, they still had remnants of this mispayment that wasn’t there, but they still had evidence of it.

I don’t know, I don’t understand this stuff. But it was high enough that I could go ahead and proceed with my loan. But it’s just one of those things that he talks about in this process of getting yourself out of foreclosure, that you really have to advocate, you really have to go and try to get things done.

You have to communicate, you have to go back to the bank. If you send something in once, it may not be enough. You have to kind of go back and check in with them.

It’s a big bureaucracy. They’re not sitting around thinking, oh, I wonder if Mattias has been helped today. I wonder if he’s in good shape.

I wonder if he’s still worried about this whole situation. It’s gone. In fact, when I called back in, they couldn’t even figure out who I talked to the first time.

They had completely changed, their bank itself was, they sold the loan and then they were changing into some other department or being bought up by somebody else. I don’t know, it was a mess. But I was very thankful that I stayed persistent and I got a little squeaky.

And that’s not something people love to do. I, again, wish I didn’t have to. I wish I didn’t have to go to that.

I wish I could just talk to somebody and be like, hey, look, you guys screwed up. Can you make it right? And then it would be taken care of and not have to go.

I mean, if I wouldn’t have called back in, that could have been months of time that would have gone by. And maybe in a normal situation, that would be fine if I didn’t have to get a mortgage. But I also have a credit card that fluctuates based on my credit score.

I don’t have like a, okay, you can spend $25,000 limit. It’s like you can type in, if you have a big purchase, you can type in how much it is and they’ll tell you if you’re approved or not. That’s how you do it.

And so I was getting denied for smoothies, things like that. It was frustrating. So I guess all that to say is if you are dealing with these kind of institutions, you do have to be a little squeaky.

It really helps to have a good relationship with a mortgage advisor. There’s some good points there for being loyal to the person who’s done your loan in the past, using somebody local, not just like a big bank, because they might be able to help you a little bit more or care a little bit more to help you than others will. So all that to say, we got a different but really cool episode for you today with Mike and Mike Russell.

He goes over again what steps, how he helps people get past or through the pre-foreclosure stage and helping people to avoid it altogether if possible. He was, is an agent and so has perspective from that end as well. It’s been a great conversation.

So make sure you check it out. Without further ado, we got Mike Russell. Welcome back to the REI Agent.

I have the pleasure of interviewing Mike Russell today. Mike, thanks for joining us. Thanks, man.

Appreciate it. Grateful to be here. Hey, Mike, this is a little bit different than our normal interviews.

Tell us what brings you here today. What is the reason that, yeah, we’re interviewing you. What’s your passion?

What are you out there helping?

[Michael Russell]
Yeah, sure, man. I’ve been in and around the real estate business my whole life, really, since I was 19 years old. And 30 years in this business took me to a place where in the last five years or so, I’ve been focusing on a nonprofit that I created called Hope4Hardship, which helps people who are facing imminent foreclosure in and around the New England area.

And that’s just sort of become, I don’t know, for cliche purposes, a passion project or something, but it’s something I enjoy doing because it resonates with me very personally because of my own struggles with those kinds of things. And there’s a whole bunch of useless real estate knowledge around in my head that makes it pretty simple for me to help people request assistance from the very entity that is threatening their housing. So it’s just pretty simple to me.

And so it doesn’t take a tremendous amount of effort. I’ve been doing that kind of thing my whole life. And so I just figured the best thing I can do with that knowledge is pay it forward to the next man or woman.

So that’s what I’ve been spending a lot of time doing.

[Mattias]
Yeah, that’s awesome. What was your background in real estate before?

[Michael Russell]
Oh, geez, man, when I was 18 years old or something, I didn’t really know what the hell I was doing like most people. And I’ve yet to meet someone who said they wanted to be in real estate when they grew up. But summer of 96, my father bought a Century 21 franchise and that kind of created the path of least resistance for me.

And I decided, oh, well, I guess that’s what I’m gonna do for the rest of my life. And so I jumped right in it. I went to see my old man said, hey, what do I gotta do to trade my blue collar in for a white collar?

And he said, go to college, which I wasn’t thrilled about, but hey, whatever, I went to college. I started working there as an administrative assistant, held every position there is to hold in a real estate company. I’ve got over the course of my life.

Until I just took it over and began running it myself back in 2009, 2008 of all years. All right, good time. Yeah, my father got out at the right time.

And so that’s my background. I’m a real estate investor. I’m been in and around real estate, a part of maybe 30, 40,000 different types of transactions over the course of 30 years.

But every day I think I’ve seen it all and I get proved wrong, is the reality of it. And so in that 08, 09, I got scalped pretty hard. I had a lot of really bad habits, spending habits, living in the moment with my finances in my life and 08 and 09 caught up and it forced me, my own decisions and then the crumbling of the real estate economy and the economy in general led me to filing corporate bankruptcy, personal bankruptcy, being foreclosed on, having to short sale some assets.

And the decisions I made leading up to that were poor, but the decisions I made once I faced that financial crisis were equally poor. And in hindsight, there are so many things I could have done besides take those, again, path of least resistance options, bury my head in the sand or take what I thought was the easy way out. Those decisions that I made about allowing a public record to be cemented onto my credit report via bankruptcy or foreclosure or both in my situation, really elongated my struggle.

It added an additional five or six years onto my emotional and financial crisis and struggle as I went through those things. And those public events make you unbankable in the eyes of any traditional financing arm. And there were other ways around my struggles than what I did.

And in the 15 years preceding that, I just came to kind of identify and learn what they were. And it’s pretty simple for me to help people who are in a struggle like I was. It’s really just, I don’t know how else to describe it.

It’s very simple for me. And of course, it’s not my loan that’s delinquent or in default. And so the emotional barriers, which are really the biggest struggle of the human condition when you’re facing problems like that, don’t exist for me.

I can really take a step back and see the situation for what it is without the emotional strife that’s attached to it for the individual going through it.

[Mattias]
Yeah, yeah, I’m sure that what you’re describing, I’m sure it’s incredibly emotionally painful to go through. And we know that so many people were going through that in that time as well. Tell me a little bit about, or if you were to give advice to a new agent kind of getting into the business now or has in the past few years, what kind of preventative stuff would you suggest somebody do to kind of prevent that kind of thing from happening if we ever have a correction again like that?

[Michael Russell]
Yeah, sure. So live within your means would be the first advice I would give. It is, it’s tremendously challenging to enter the real estate market today.

Tremendously challenging. I have twin nephews that are 22 years old and boy, I keep telling them, buy real estate, buy more real estate and keep buying real estate. And just getting them into that first place is tremendously challenging.

Combined, I think they make about $100,000 a year. They have really relatively no debt and they can’t get approved to buy anything in the Northeast. They simply can’t.

And we’re seeing a lot of that. We’re seeing a lot of, 43% of our transactions last year were cash. And I would say about half of those were parents and grandparents cashing out retirement to buy houses for their kids or grandkids with the promise that once rates settle down, refinance us out and give us our money back.

And boy, that’s a scary, that’s a scary prophecy. It’s scary to say the least. But yeah, I don’t know.

It all depends on what you’re trying to do in real estate. If you’re a new licensee and you’re trying to make a go at this business, I would tell you that real estate has given me everything I ever needed in life and damn near everything I ever wanted. But the reason for that is I’m not afraid of this.

I’m not afraid of the phone. And I am a proponent of speaking with strangers. Nobody knows enough people in their life, in their day-to-day life to sustain revenue every year consistently for the rest of their career.

Nobody does. You have to be able to communicate with and provide value to people you don’t know. And that, you know, I’d say that’s the curse of the new real estate professional, boy, is embracing that and understanding that you can create a career if you’re not afraid of the telephone.

[Mattias]
Yeah, I could see how a lot of people coming in during the pandemic, like maybe 21, et cetera, might have quickly increased their way they live, their lifestyle, right? Because it seems so easy. And, you know, they maybe even felt like they were just naturally amazing at this job.

And, you know, come to time like this, it might be feeling a lot harder for them. So it’s definitely, if you do have, if you’re not a seasoned agent, if you haven’t been in this business for a long time, don’t count on your business forever if you do feel like you have a quick success in the beginning. It could be a market cycle.

It could be, sometimes you just, your sphere buys more houses in a year than they do other years. So like it’s, if you don’t have a system, a proven track record over many years of being able to sustain a business, a certain business amount, don’t, yeah, just don’t count on it to be around forever.

[Michael Russell]
You know, that was the, you know, the COVID real estate starter pack was like a leased white Range Rover and some red bottom shoes. You know, that was, and, you know, some social media memes, you know. And listen, that’s, I poke fun at that all the time, but so look, it’s this business, sales business is like anything else, right?

It’s about consistency. And no matter how great times are, you have to do the same work as if they were bad times. People who do that succeed and make a career out of this.

And the ones who don’t leave the business is the reality of they leave the business. You know, they go back to the job they had prior or they are simply unable to ever leave that job that they held on to throughout the course of their, the beginnings of their career. And it’s, it’s challenging, you know, it’s, you know, one thing I learned a long time ago is that by and large, the vast majority of people do what they have to do to get by.

Very few of them do much more. And that’s just the reality of the human condition, I think, and there’s no judgment against it. It’s just the human condition, right?

It’s what we do. And so when the market’s outstanding and everyone’s a buyer because the cost of capital is so cheap, then, you know, everyone’s a rock star. It’s when that dust starts to settle that you begin to see, you know, who the people who are gonna make it are.

[Mattias]
Yeah, 100%. And I think another thing that I would add to the lifestyle piece of it is that if you’re, if you do see an increase of income in this business, try to first buy some investment properties to then raise your income with a cash flow. So your cost of living can be increased then by your cash flow.

If you can cover your basic needs first with cash flow, that’s amazing. But, you know, it’s not for everybody. I think it can be hard.

It could be the harder route. It could be the less fun route, but you’re gonna thank yourself for sure if you start increasing that portfolio.

[Michael Russell]
There’s no question about it, and not enough people do. It’s funny, I swear, every single real estate agent I ever sat down and interviewed wanted to be an investor. Every one.

The first time they come in, they sit down, and like so many people, that’s why they’re getting their license, you know? The sad reality is that so very few become that. And it’s, you know, the fear is not real.

It’s fear-based. And most people who are trying to get started investing are afraid because they feel like they don’t have the money to do it. And it takes risk, of course.

It takes an appetite, it takes a risk threshold. But the reality is there’s more money on the street than any one person could ever use. And so the access to capital is immense in every market.

And it’s just a function of being able to take that risk. And, you know, people who have never, you know, used hard money before, you know, the interest rates alone can scare the hell out of them. Just the thought of it.

A name. You know, yeah, right? You know, they could’ve come up with a better name for it, right?

Yeah, private capital. Yeah, you know, nobody builds long-term sustained wealth with their own money. Yeah.

Nobody does. Yeah. And I still am a firm believer that the best way to solidify long-term sustained wealth is the acquisition of real estate.

There’s no question about it. It absolutely is. And I wish more people would take the jump, you know, take the leap.

You know, I’m surrounded by, I don’t know, half a dozen to 10 people every week who would love to do it, but have that obstacle of fear that’s in their way. And money’s never the problem. Money’s easy.

Getting money is tremendously simple. It’s just about identifying the asset. And, you know, that becomes a function if it’s a two-pronged thing.

If you’re afraid of this, you know, once a property hits the MLS, all deals are off, you know?

[Mattias]
Yeah. Yeah, to your point, I mean, I had, I interviewed a girl who is now 18. She flipped her first property at 16.

And she did have to get her dad to co-sign, but she did everything else, and she found the hard money to do everything. I mean, she was already in the networks because of her dad, but she was showing the initiative. That’s what people loved about it.

And, you know, I mean, she was such a great inspiration to anybody, to kids, but to anybody really, that it’s possible that you can go out and find it. And you’re right. I think if you find the right deal, the money can be a secondary problem.

And I think most people will stop and wait until they have the money or think they need to wait until they have the money to do anything. And I’m currently writing a book that is kind of like the how to kind of get started in real estate as an agent and as an investor with no and low money strategies. So hopefully that will help some people as well, take a little bit more broadly than just saving up 20, 25% to buy an investment property.

And yeah, looking forward to what results come from there.

[Michael Russell]
Yeah, that’s great. And, you know, it’s knowledge. You know, knowledge creates belief in oneself.

Belief in oneself creates confidence and confidence moves mountains.

[Mattias]
Yeah, 100%. Oh, Mike, let’s talk more about the foreclosure side of things. Yeah, sure.

Yeah, I mean, so how are you helping people? I’d love to know.

[Michael Russell]
Yeah, so, you know, it’s very challenging for most people in the world to believe and understand the average consumer, the average debtor, that the very entity that is threatening your household is the entity who can help you. And the reality is that there are two inalienable truths about foreclosure in America. No bank in America wants to foreclose and no homeowner wants to be foreclosed on.

So those two absolutes are always true. Bank doesn’t wanna foreclose. They can’t stand foreclosing.

They’d rather do anything in the world but foreclose on the collateral that they have attached as security. But most people don’t take the initiative to apply for assistance from that very entity. And that’s where we start our work.

And so we craft applications on behalf of people. We craft hardship explanations and we submit those until the bank, really what matters in the foreclosure world when you’re applying for assistance from your lender is for them to deem your application complete, which of course is an arduous process that the average person does not wanna go through. A lot of people we meet submitted an application three months ago, never heard back.

So they think they’re all set. Look, this is about proactive, consistent follow-up. And so part of the process of what our team does is they follow up every three business days with the bank looking for a status update.

Because as I’m sure you can imagine, you send something to a bank and three days later, they say that, I don’t know what you’re talking about, didn’t see it, or it’s not complete, or we need this now, or we need that now. And it’s a constant grind, just getting that application to a complete status. And so we begin there, we craft what we believe are outstanding applications.

Every single time, still to this day, I foolishly convince myself that it’s gonna be deemed complete as soon as they see it. It never is, right, it just never is. They’re always seeking something else.

And so whether that be letters of explanation, further supporting documentation, whatever it be that they are asking for, we follow it through to the end, get it certified complete. Once it’s certified complete, it’s kind of a reverse underwriting situation. You go apply for a mortgage, it goes to underwriting.

When you’re asking for assistance, it goes to underwriting, but it must be complete first. Once it goes to underwriting, it’s then under review. Under review means that they pause proceeding further with any foreclosure action.

They just pause it while it’s under review. They’re giving you an opportunity to vet out your finances and the validity of your hardship. And most importantly, whether or not the bank deems you a viable bet moving forward as someone who could resume their normal payments if they just got a little help with that arrearage.

That’s a process, usually takes 30 days. Sometimes it takes 90, even though they tell you 30, whatever. But the reality is we’re trying to pause that further action by giving the consumer an opportunity to present their case for getting back in the good graces of the bank.

And then once that review process is over, they will issue a results letter. And every bank in America that offers assistance, and most do, will issue a results letter with assistance options in two buckets. Retention options, we will offer you assistance and you can retain your home, keep your home.

And these are the four or five different ways that we can assist you. Or there are non-retention options, of course, far less frequent nowadays, because those would be things like a short sale or a deed in lieu, which I still can’t figure a good way to do a deed in lieu or why you would. But the non-retention options are fewer and further between, of course, because of this ridiculous appreciation that’s gone on in five years.

Very few people are underwater, right? Very, very few people. And I say it all the time, I wouldn’t recommend it, because I’m not recommending this, but really never in my life, in the 30 years I’ve been in this business, have I seen a time where you could literally not pay your mortgage for two or three years, sell your house and get a bag.

It’s not the real world, but it happens on a regular basis. We meet people who haven’t paid their mortgage in two years, two and a half years, they sell their property, they get a check for $190,000, more money than they’ve ever seen in their life. One of the benefits of outstanding appreciation is even though you’re in trouble, it doesn’t mean that you have to walk away with nothing.

And that’s the struggle, I think. The biggest, and I say I spend the vast majority of my time, man, talking people out of their own way. Because this is rarely a financial problem alone, right?

If you are behind on your mortgage, it is a very safe assumption that you have other compartmentalized, separate problems in your life that are actually far bigger than simply being behind on your mortgage. And being able to compartmentalize them effectively and laser focus on this one problem that if you allow the foreclosure to happen, the rest of your problems are going to get significantly worse. Just getting people to a place where they understand the value of taking a breath, trusting in this process, and trying to compartmentalize problems.

And hey, the rest of these things in your life are separate from this. Let’s try to save your home. And honestly, in today’s day and age, that ridiculous and so valuable 2.25%, 30 year fixed mortgage rate you have on that property. Getting people to understand the value of that and the cost of replacement housing and the humble up factor. You’re living in a four bedroom, two and a half bath, 2,200 square foot home and you’re paying $1,800 a month and you fell six months behind. To find replacement housing at 1,800 bucks, you’re lucky to get a two bedroom, 800, 700 square foot apartment that doesn’t allow dogs and isn’t de-led or whatever the case may be, that’s the real hard work.

Like the application, the stuff, the granular, that stuff is simple to me, right? I’ve been around it all the time. I probably closed 1,000 short sales from 2008 to 2013.

I represented Freddie Mac and Fannie Mae as a listing agent, sold 1,000 of those homes over that same period of time. Like dealing with banks and all, that’s the easy stuff. It’s the challenging piece is getting the homeowner to understand the value of their current situation if it can be protected.

That’s the real struggle. That’s where the effort goes in, at least for me, is getting people to understand that. It’s a hard thing.

Like if you bought your first home, which is tremendously common in like 21, 22, and you got a two, we just had a 2% flat, 2% flat fixed rate mortgage. That’s insane. To value that is hard because you have nothing to compare it against.

You just think it’s normal, you know? But man, if the bank will allow you to get back in the good graces, really it’s the Fed, right? It’s really taxpayer money that’s solving this problem for so many people is what they’re doing now, it’s called a partial claim mortgage with most FHA, Gini, or Fannie, or Freddie backed mortgages.

They’ll give you multiple bites at the apple, you know? If you’re an FHA buyer and you fall behind, what happens is HUD comes in and pays the servicer. Say you’re 50 or, I’m sitting on one right now, this is M&T Bank.

This is a partial claim mortgage that needs to be notarized and sent back in for a client. They’re $92,000 behind. And HUD is offering to pay that $92,000 to the servicer, hold a silent second for the 92 grand, not due and payable until either the maturity of the note, you sell the house, or you refinance.

As long as the consumer will resume their normal payments sometime in the next 60 days or so. It keeps their 2% mortgage intact. Wow.

It allows them to get back in the good graces. But it’s a, every situation’s different, you know? It’s, I don’t think any of us know, I have a sneaking suspicion, but I don’t think any of us know if values are going to hold forever.

And if having a $92,000 silent second on your property, which is really just interest and fees, sitting out there on top of your principal balance when you bought at mid-range height ever of property values, when, you know, so it’s, every situation’s different, you know? But a lot of people, if they can play the whole tape forward in their mind, which is very challenging to do, the most sound decision to make for a lot of people is to maximize return on the asset, sell it, take the money, and live to fight another day. But that housing transitions are a very humbling process.

They’re very, very, very humbling. If you are downgrading your housing, your living situation, that is one of the, that wreaks havoc with the ego. It wreaks havoc with, you know, the unreasonable things that all human beings possess, things like entitlement and blame and all the rest of that.

It wreaks havoc on it. It’s a lot of work getting someone to kind of play the whole tape forward, see the future, and understand that if you don’t do anything, they, you know, the bank doesn’t want to foreclose, but they will. And trying to change your housing situation with no money in the bank is a hell of a lot harder than changing it with tens of thousands of dollars in the bank.

They both suck. Leaving the home that you’ve grown accustomed to, if it’s your first home, and, you know, like leaving that and going into an apartment, that sucks. But doing it with tens of thousands of dollars in the bank, how can you possibly describe just how much easier that is to somebody?

I spent my morning today explaining this to someone, first-time home buyer. Like I said, $92,000 in arrearage. Horrible personal tragedies came upon this woman.

And she is in her own way. And she needs someone to help get her out of that and find the softest landing spot. And so that’s, I don’t know, that’s, I guess it’s just kind of, you know, like, listen, you do anything for 30 years, it gets monotonous, right?

And I always, it resonated with me, of course, because of my own struggles with this stuff. And, you know, my own poor decisions created a lot of collateral damage in my family that took me the better part of 10 years to remedy. And so it’s all very real to me.

I understand it, I have empathy for it, but I also understand what it takes to get out of your own way, stand up, and start addressing and cleaning house of the problems in your life. And I find joy in helping people that are in a position of struggle, you know, more so than, I don’t know, helping normal people, you know?

[Mattias]
That’s, yeah, that’s really great. What kind of, so it sounds like you have to really help people overcome a lot to get to a point to let you help them. What’s it like when you actually succeed?

Do they, are they thankful for it, do they see it? Yeah, man, it’s phenomenal.

[Michael Russell]
You know, 90% of the time. Yeah, they, 90% of the time, they, if they ever need to buy or sell real estate ever again in their life, I’m their guy. And that’s the fair bargain, right?

That’s paying it forward, you know? You help someone for nothing, right? And you just, you give your knowledge, experience, you know, strength and hope to somebody.

Yeah, of course, they pay it forward back to me. But yeah, I mean, of course there are some people that this is the problem. If the government’s going to bail people out and HUD’s going to come in and pay, essentially make your payments after they were late for you, there are certainly people in the world who do not stay on track, you know?

We’ve had people that, you know, we just had someone here locally that we got them the same kind of deal, partial claim mortgage. It was like 45,000 maybe in arrears. They tacked it onto the back end and it’s been, I think, seven months.

And they put her back in the good graces. She just had to resume her normal payments. She hasn’t made one payment since that.

So of course, and that’s, and so yeah, and there’s, that’s where entitlement comes in. You know, people think, you know, I think it’s just how we’re ingrained here, right? Yes, I borrowed $300,000 to buy this house, but as soon as they move in, they really believe it’s their house.

And it is not, it is an encumbered asset in the eyes of the bank, that house is collateral, you know, F around and find out kind of scenario, right? And that’s the hard reality of it. But hey, you know, so look, I never set out to do this believing that I would reach every single person.

I just believed that I would give the same effort to do so. And I try, you know, I’m pretty good at life nowadays at controlling the controllable, right? I can control my explanation to people.

I can’t control their reaction. And all I can control is my explanation and then my reaction to their reaction. And those are the only things I possess control over.

Everything else is far above my pay grade.

[Mattias]
Yeah, yeah, I was a behavior specialist in the school system before I went full-time real estate. And, you know, I can kind of relate to what you’re talking about a little bit. You know, you work really hard to try to help people understand kind of the right path to make the right decisions, that kind of stuff.

And you can get a lot of rewarding moments, a lot of great decisions made, and then there can be a meltdown or whatever. It can all kind of come crumbling back. And so I think it’s for sustainability and that kind of work, I mean, I feel like the wins are important.

They feel great. If it’s all losses, it becomes more taxing than it’s worth.

[Michael Russell]
Of course, right? And some of them are tremendously easy. You know, there are people who will walk in here and a lot of these banks will do an over-the-phone financial interview and approve somebody in 26 minutes.

And, you know, they’ll walk in, sit down, we’ll get on the phone, do a three-way call with the bank, and boom, you know, they’re back in the good graces. It’s really an amazing thing. And I made some good friends doing this, man.

I made some good friends, some good relationships with people that, you know, it’s hard, man, because as you know, when you fall behind on your mortgage, that’s a public notice. And the number of people and entities who come out of the woodwork, by and large, by and large, seeking to capitalize on what they perceive to be the misfortune of others, right? Let’s just call it what it is.

And so they are being pulled in so many different directions, oftentimes by outstanding salespeople. They are often made to believe certain things that may or may not be true. They are, there’s a local attorney here in town that is, I don’t even know where he is, but he hits all these people and he says, I’ll sue your bank as part of a class action.

And that’ll fix everything. You know, not on a contingency fee basis. Give me $5,000 and I’ll sue your bank.

And it’s like, but these people, they think it’s an attorney. Oh, this attorney is gonna solve the, yeah. It’s a tough thing to watch.

And listen, no disparagement. You know, everyone’s got a business model and I’m not here to, you know, throw any shade on it. It is what it is.

I understand it. We’re a capitalist society and everyone’s business model is their business model. And so, but look, if somebody has an asset that is faltering or a toxic asset, in my opinion, it’s either save it or maximize return.

And never in my experience has maximizing return meant to sell it to a wholesaler or do, you know, like if you wanna maximize return, get the highest number of qualified buyers in there and make a bid. Right. You know, that’s the reality.

But it’s, you know, it’s, yeah, it’s a grind, man. It’s, you know, there are about 115, maybe 120 year to date people per week just in the state of Massachusetts who fall behind on their mortgage. 70% of those loans were written during COVID.

Wow. Yeah. And it’s, so think about it, right?

Like this is, and I’m not a conspiracy theorist or anything like that, but I can read the tea leaves, right? And back then FHA dropped their credit rating requirement to 580. Rates were two something percent.

And there’s a pretty strong argument that this country was lending money to people who really had no business except them. Yeah. Wow.

I think that the Fed has come in through this partial claim program where the HUD, you know, which is just taxpayer funded, you know, housing and urban developments at GSC, right? They’ll take the government money and pay the payments that the FHA borrower couldn’t afford to pay in order to keep them. And I think there’s, I’m starting to believe that there should be some more foreclosures out there.

Maybe quite a few. And I think that the government is working to sort of not allow them to become foreclosures. And I think, I don’t know, I’m a believer in the free market, right?

Like what happens, happens. And I don’t think there should be a whole lot of bumpers down the alley. And I think that we have a serious inventory problem in this country.

Right. And if there’s, I don’t know, a couple of hundred thousand properties that could be on the market, you know, so it’s, you know, time will tell, you know, the Wall Street Journal put an article out a couple of weeks ago about this very problem. And there’s no question, there’s some potential shadow inventory out there right now being covered up by these partial claim mortgages, which is an effective bailout of the American consumer, which, hey, listen, I’m a much bigger proponent of bailing out the consumers than I am of bailing out the banks, you know?

Sure. We certainly didn’t get bailed out last time around. So it’s just, it’s interesting to watch, you know, I try to keep my ear to the ground.

But at the same time, I try to help people. I’d say that 50% of the people we help get back on track and stay on track. That’s great.

Yeah, it’s not outstanding numbers, but shit, if half the people that I work with can save their home and stay in their home and keep their family, then, hey, man, that’s winning, you know? The other half end up quite quickly back where they were to begin with. And once you go to the well, you’re kind of done, you know?

Sure, they’re not gonna keep letting- Yeah, they don’t let you just keep going back. And, you know, in this environment, that’s really the only way to save a home, right? Is through this HUD partial claim thing is nobody wants a loan modification.

Modifications modify the terms of the note and they modify from your 2.25% fixed to a current rate 7%, which automatically double or triples your mortgage payment and it becomes unaffordable anyway. So it’s, yeah, it’s interesting, man. It’s always changing, but I enjoy the hell out of what I do.

I really do enjoy it. I think it’s, the one thing you can’t fake in life, man, in my experience is shared struggle. So I know what it’s like to struggle financially.

I have a pretty healthy outlook on, you know, the fact that that was all my fault, wasn’t anybody else’s. But not everybody in the world, and certainly I didn’t either, comes to that conclusion quite quickly. And, you know, so I deal with a lot of people that are pointing fingers, you know, it’s still, you know, not enough thumbs, too many fingers, you know, it’s kind of the way it rolls.

And, but it’s, I enjoy it. I like to see people get back on their feet. I like to see people become better versions of themselves.

And, you know, I’ve been doing some semblance of that work for a long time. I just kind of changed the audience.

[Mattias]
I love it. You know, one of the things that I’ve definitely written about and in this book that’s coming out and just kind of been my stance is that if you are looking to be a realtor in your local market and an investor to not be tempted by wholesaling, to not do both. And I think you kind of outlined why that is the case.

And I think that if you’re not necessarily helping, like if you’re gonna wholesale a property, you’re not necessarily, they’re not necessarily your client. So you don’t necessarily have a fiduciary duty to represent them. But I think that if you start getting reputation for treating some people with a fiduciary duty and some others without it, you know, I don’t think it’s where you really wanna be if you have a long-term goal of being a realtor and helping people.

And I should say, you know, taking like a $5,000 wholesale fee and getting decent market return is one thing, but we all know that that doesn’t usually happen, that there’s often a much bigger wholesale fees and it’s usually under what a person could get on the market.

[Michael Russell]
It’s impossible to hold the sanctity of a real estate license and be a wholesaler. It’s simply not possible, right? You can only serve so many masters.

And if you’re a licensee, you’re not one of them. But that’s lost on quite a few people, you know. There’s an awful lot of people in the course of my life that I met and I swear they thought their fiduciary was themselves.

But, you know, most of the wholesaling I’m seeing now is, you know, I still see realtors involved, but I see realtors identifying a straw. And so they find a straw who is not licensed to be the wholesaler, but they still facilitate it in some fashion. And I’m just not a proponent of it.

I’ll buy some of these houses, but only if they’re short sales. I’ll buy a short sale property, but I’m not gonna take equity out of a homeowner’s hand. You know, I think there’s a better way, always a better way than, and I tell everyone, look, I’ll buy your house, but you don’t want my offer because I’m not gonna offer you anywhere near what we could get on the open market.

And I’m simply not, I’m just not. I’m not gonna pretend that my offer is the best. You know, if I’m buying property, I’m doing it for profit.

And that means that I’m not the best offer. Yeah. And so, yeah, but I think, you know, it’s rewarding work, man.

You know, it’s fun seeing people go from a really bad place to a better place. You know, that’s enjoyable to me. I like the turnaround.

You know, the only reason I’m here is because I turn my own life around and I stick around and do this so I can play a small role in other people turning their lives around. And that’s rewarding to me. And not everyone gets an opportunity to do that.

[Mattias]
You know? Yeah, I love it. Are there resources that you can think of or that you’d recommend to people if they’re not in your area?

Because you said you only service the Northeast.

[Michael Russell]
Yeah, so vast majority of our work is done here in the Northeast. We do some work down in Florida. But it’s, you know, HUD approved counselors, HUD approved home counselors are really your best.

And look, the reality is every servicer, you know, and if you’re like me, you know, and you got two years of unopened mail sitting on your dining room table and you’re wondering what the hell’s going on, the reality is the answer’s in that mail if you just open it. And every servicer, when they begin, when you are in default, they will begin sending you packages. And inside those packages, somewhere buried on page two or three is a list of HUD housing counselors, or at least the website where you can go and identify a not-for-profit counselor who isn’t going to charge you money to try to find your path out of this way.

But it really is just as simple of picking up the phone, calling your servicer and saying, look, I understand I’ve fallen out of your good graces. I’d like to do my level best to get back in them. Can you please help me through the application process?

It really starts there.

[Mattias]
Okay, that makes sense. Yeah. Mike, do you have a book that you recommend people to read?

It could be related to this, it could be just kind of a fundamental book for mindsets, a current favorite, anything like that?

[Michael Russell]
Oh, geez, man, I’m a big sports guy, you know, so I like sports books. I got some sitting over here. Management Secrets of the New England Patriots, one of my favorite series of books.

If you could identify an organization that was tremendously well run in the last 20 years, the Patriots would be at the top of my list. And there are some outstanding tidbits of information on there about how to manage a team and how to do the right thing. So I’m big, I lean big towards, that was really always my attraction to sports is much less the talent and more the teamwork and the finely run organizations compared to those that aren’t.

And I think it’s all very apparent once they get out on the field or the court. But yeah, so. That’s interesting.

[Mattias]
Yeah. And if anybody is in your area that would wanna reach out for help or just, you know, wanna reach out and follow you in general, where can they find you?

[Michael Russell]
Yeah, they can call me direct, (508)501-9214. Just tell me your story, I’ll tell you if I can help. And I can go to my website, hope4hardship.org.

It’s the number four, hope4hardship.org. I can learn a little bit about me and what we do. And yeah, man, I’m always honored to meet new people and hear stories of struggle and see how I can play a small role in turning it around for you.

Awesome. Well, Mike, thanks so much for being on the podcast. Absolutely, man.

[Mattias]
Thank you.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit reiagent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in this show is not investment advice or mental health therapy. It is intended for entertainment purposes only.