I’m going through a lot, and right now I’m at a crucial point where I need to make the right decision — because if I don’t, I will be financially destroyed. My problem is twofold.
The first part: About three years ago, I married a person who was nothing short of evil. During that time, I purchased a duplex. I asked him to sign a statement saying it’s my sole and separate property. This was notarized. It’s an actual document that was required and part of the package of papers I signed when I purchased my home. He is not on the loan and he’s not on the title. Fast forward a year later: I have filed for divorce, but I have not served him papers yet because he’s threatening to try to take my house and to get alimony.
The second part: When I purchased my duplex, I rented it out. My tenant has not paid a dime since December 2021. He has destroyed the home, broken the windows and door and put more than 100 holes in the wall. He also stole my mail, which was going to the other unit in the duplex, and has been committing credit-card fraud, opening bank accounts in my name, changing information (my address, phone number and email) on my existing accounts and racking up charges, and making payments in my name. I have filed identity-theft reports with the police. I’ve called all the credit bureaus. I have called my credit-card companies.
My credit score is 512 because of the fraud and because I fell behind on my mortgage, as my tenant was not paying rent. My duplex was at a point where it was in foreclosure, but I saved it through loss mitigation, and I have a payment due June 1. Ideally, I would want to keep the house and rent it to a tenant with a Section 8 housing voucher because it’s guaranteed rent, but I think I’m going to be forced to sell — which is not all bad, as I bought the house two years ago for $560,000 and now it’s worth $900,000. But I would need to purchase something else or pay more tax on the sale. But there’s the rub: I won’t qualify for a new mortgage due to my low credit score.
I’m sorry for rambling. I’ve been a single mother since I was 15 years old. And I was so proud that I was able to purchase something in Southern California. That wasn’t easy to do, but I’m afraid the stupid decisions I’ve made are going to turn everything upside down, and all my hard work is going to go to waste.
Single Mother, Wife & Landlord
Dear Mother, Wife & Landlord,
All of your hard work will not go to waste. Take action on your husband and your tenant. Take a breather for everything else.
If a tenant does not pay their rent and breaks the terms of their contract, you can file papers to evict them. Most pandemic-era eviction moratoriums have ended. For instance, Los Angeles County protections ended on March 31, 2023. And as I told this letter writer, identity theft is fraud. You’ve done all the right things: You’ve filed a police report, contacted the credit-card companies and (I hope) frozen your credit with the major bureaus.
You should take the same course of action regarding your husband. You should not be held hostage by his attempts at bullying, misinformation or coercive control. Just because he says something and even believes it does not make it true. He is not on the loan or the title of your house. A divorce lawyer can provide you with more expertise than a bitter soon-to-be-former husband. File those divorce papers.
It’s not a given that you would have to pay your husband alimony upon divorcing him. “When determining alimony payments, a family court will consider the length of the marriage,” according to Renkin + Yip family law firm. “In California, spousal support may be paid for up to half the length of a marriage that lasts 10 years or less. Unions that lasted longer than 10 years are considered ‘long term,’ and no specific duration will apply.”
Evict your tenant and serve your husband with divorce papers before you decide what to do with your house. If you buy another home, you won’t get the same interest rate as you got in 2020 or 2021. That’s going to add a significant amount to your monthly mortgage payment, even if you purchase a cheaper property. Your low credit score will also make a mortgage more expensive.
Remember that psychologists and financial advisers often recommend that people don’t make big decisions within a year of a major life event, such as the death of a family member or divorce.
You’ve been a single mother since your teen years, and you have navigated marriage, bad tenants and identity theft. There’s not much more life can throw at you to test your resolve. That’s the good news. And you didn’t make stupid decisions. You made decisions in good faith. You have already shown that you are strong. Stay the course under pressure. Don’t sell your home in a panic or do anything out of fear or anxiety.
Financial decisions are often emotional ones. Seek out trusted friends and family — and lawyers and qualified advisers — for support.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
The Moneyist regrets he cannot reply to questions individually.
More from Quentin Fottrell:
Published: March 23, 2023 at 4:26 a.m. ET
By Michael Susin
Seplat Energy PLC said Thursday that it has taken legal action against its former chair after terminating a consultancy agreement with its wholly-owned subsidiary and its co-founder with immediate effect.
The Nigeria-focused energy company said the termination follows repeated warnings about breaches of a material nature such…
By Michael Susin
Seplat Energy PLC said Thursday that it has taken legal action against its former chair after terminating a consultancy agreement with its wholly-owned subsidiary and its co-founder with immediate effect.
The Nigeria-focused energy company said the termination follows repeated warnings about breaches of a material nature such as “unilaterally making significant commitments on Seplat’s letterhead without prior board authority or knowledge”.
The company said that under the consultancy agreement, Mr. A.B.C Orjiako, acting through Amaze Ltd., was obliged to provide defined assistance with certain external stakeholder engagements following his retirement from the board.
The company has commenced legal action against Mr. Orjiako and Amaze Ltd. at the Federal High Court in Abuja, Nigeria.
Mr. Orjiako served in the company as chair and stepped down in May 2022.
Write to Michael Susin at michael.susin@wsj.com
Banks should be on alert for Russian oligarchs attempting to circumvent U.S. sanctions by investing in commercial real estate, a U.S. Treasury Department watchdog said.
Wealthy Russians with ties to the Kremlin are likely attempting to evade the economic sanctions placed on them in the U.S. by moving money into the commercial-real-estate sector, where complex financing methods and opaque ownership structures can help bad actors hide funds, the Treasury’s Financial Crimes Enforcement Network, better known as FinCEN, said Wednesday.
FinCEN, which serves dual roles as the U.S.’s financial intelligence unit and anti-money-laundering regulator, is the recipient of the suspicious activity reports that financial institutions are required to file if they suspect a transaction may be illicit in nature. Law-enforcement officials can consult the reports when conducting investigations into financial crimes.
The Biden administration has targeted wealthy Russians as part of its response to President
invasion of Ukraine last year, placing those with close ties to the Russian government on blacklists that are intended to prevent them from accessing the U.S. financial system.
The alert issued by FinCEN on Wednesday is the Treasury’s latest effort to prevent sanctioned Russians from finding ways to evade such financial restrictions. In an 11-page report, FinCEN listed a number of potential red flags and typologies it said banks should be on the lookout for.
“Thanks to international pressure and the economic restrictions that more than 30 countries have imposed on Russia for its brutal war against Ukraine, sanctioned Russian elites are increasingly left with fewer options for moving and hiding their ill-gotten wealth,” FinCEN Acting Director
Himamauli Das
said.
Sanctioned individuals may try to use pooled investment vehicles or offshore funds to avoid due-diligence processes, FinCEN said in its alert. Banks aren’t typically required to verify the identities of individuals who own less than 25% of a fund. Sanctioned individuals could keep lowering their stakes to avoid detection, while still maintaining control of the fund, FinCEN said.
Oligarchs also may use shell companies and multiple layers of legal entities or trusts, or transfer their assets to a family member or business associate to conceal their ownership, the Treasury bureau added.
Sanctioned individuals aren’t just investing in high-end or luxury properties, according to the alert. In some cases, they may seek out more inconspicuous investments that provide stable returns without drawing unwanted attention. Such sanction evasion strategies are just as likely to occur in small to midsize U.S. cities as they are in the largest metropolitan areas, FinCEN said.
FinCEN’s latest alert builds on a similar warning issued last year, in which the watchdog advised banks to pay close attention to transactions involving high-value assets such as artwork, luxury yachts and jewelry.
Federal prosecutors have warned that lawyers, consultants and other service providers who work for sanctioned individuals could run afoul of the law.
An indictment unsealed earlier this week charged a former high-level FBI agent and a former Russian diplomat with sanctions violations in connection with work they did for
Oleg Deripaska,
a raw-materials magnate who was placed on a sanctions blacklist in 2018.
Write to Dylan Tokar at dylan.tokar@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
If someone promises you the “deal of a lifetime,” it’s probably not a good investment.
That’s what finance guru Matthew Onofrio, who sold a program claiming to have cracked the code on commercial real estate, promised inexperienced investors looking to strike it rich. But prosecutors say it was all a fraud aimed at lining Onofrio’s pockets.
The 31-year-old native of Eau Claire, Wis., appeared on investing podcasts and at conferences with a compelling tale. He said he had walked away from a promising career as a nurse anesthetist when he discovered a real estate strategy known as triple net investing, through which he had amassed a portfolio worth over $150 million in just three years.
But between 2020 and August of this year, federal prosecutors in Minnesota say, Onofrio had ripped off numerous banks to the tune of $35 million by roping investors into a complex web of quick-flip real estate sales, fraudulent mortgage applications and doctored appraisals.
In a statement, Onofrio’s attorney, Marsh Halberg, said none of his client’s investors had been hurt financially by their investments.
“The defense is aware of very few, if any, transactions where the investors have suffered actual losses at his time. We believe most of the transactions with Mr. Onofrio still maintain a positive cash flow and /or an increase in the value of the property that was purchased,” Halberg wrote in an email.
A civil suit filed this year involving a radiologist from Puerto Rico named Matthew Hermann, who wanted to get involved in real estate investing with his wife, laid out how Onofrio operated.
The suit said the pair met at a networking conference in Colorado in 2020 and hit it off while discussing real estate opportunities. Hermann said he was hoping to build up a real estate portfolio that would provide him with enough income that he could stop working.
Hermann said in court papers that Onofrio offered to bring him into “the deal of a lifetime,” involving a commercial property for sale for $6.3 million in Minneapolis. All Hermann had to do was come up with $1.5 million for the down payment.
“Onofrio told Hermann that he won’t get to his goal of leaving his job by buying duplexes. Onofrio told him that ‘this will light gas on the fire of where you need to go’. He told Hermann that this is all about mindset’,” the court documents read.
When Hermann said he didn’t have that kind of money available, Onofrio offered to lend it to him so he could secure a bank loan for the purchase and Hermann agreed, the court filings said. What Onofrio didn’t say was that he had already reached a deal with the owners to buy the building for $4.75 million, not $6.3 million, and that the difference was going into his pocket, the suit claimed.
Hermann was then stuck paying nearly $6,000 a month in loan payments to Onofrio in addition to his bank loan.
“Onofrio pushed Hermann—a novice with real estate—into this purchase with grand promises of the deal of lifetime. The reality, though, was that Onofrio was the one assured to make money on the deal, not Hermann,” the papers read.
Hermann later tried to sell the property and said he found a buyer willing to pay $6.3 million for it, but the deal fell through due to litigation surrounding Onofrio’s loan.
Hermann’s attorney didn’t respond to a message seeking comment.
Federal prosecutors described a similar pattern, with Onofrio allegedly placing his own money into investors’ accounts to make their finances look better to lenders, and also fabricating appraisal documents to inflate the value of properties.
In one deal in 2021, a Minneapolis commercial property was sold three times in just five months, passing through more than one business entity Onofrio controlled. By the end of the string of transactions, the price had jumped by nearly $4 million, business publication Finance & Commerce reported.
Onofrio is charged with three counts of bank fraud and prosecutors say they are seeking the forfeiture of $35 million seized during the course of the investigation.
Here's why people are still worried about regional banks and commercial real estate
This chart shows year-to-date performance for the KBW Nasdaq Bank Index
BKX
,
the KBW Nasdaq Regional Banking Index
KRX
and the S&P 500
SPX
through Thursday, with dividends reinvested:
Bank stocks have taken it on the chin because of investor fears tied to the decline in market values for the institutions’ bond portfolios as interest rates have risen. This phenomenon helped lead to the failures of three prominent regional banks so far in 2023, although each of the three had a special circumstance that fed deposit flight.
JPM
expects a boost to earnings from its purchase of the failed bank at a steep discount from the Federal Deposit Insurance Corp.
So what’s next for the banking industry? JPMorgan Chase CEO Jamie Dimon said regional banks were “getting near the tail end” of the disruption during a Bloomberg TV interview on Thursday.
Last week, Federal Reserve Chairman Jerome Powell said that the three failed banks “were at the heart” of the industry’s stress and that their resolution “kind of draws a line in the sand.”
Steve Gelsi explains why the regional-bank turmoil might not be over, despite the reassuring words from Dimon and Powell.
He also reports on PacWest Bancorp
PACW
of Beverly Hills, Calif., whose stock dropped 23% on Thursday after it provided an update on recent deposit outflows.
Here is a longer-term threat to banks’ profits, which may not be limited to regional players.
More coverage of U.S. banks:
Commercial real estate update
By now, most investors understand that reduced office occupancy has near-term and long-term implications for corporate landlords and the banks and other investors that provide their financing. But there are other factors causing a breakdown in the commercial real estate funding market, as Joy Wiltermuth reports.
Aarthi Swaminathan looks at another problem for owners of office buildings (and their lenders): rapid obsolescence.
Read on:
Housing market
Amid signs of slowing economic growth, what may comfort Federal Reserve policy makers trying to lower inflation provides no relief to people who have watched apartment rents rise much more quickly than their wages have risen.
Emma Ockerman shares what may be good news for renters, including useful information about seasonality of rent increases.
More on housing:
A healthcare warning for consumers
Emma Ockerman reports on yet another way U.S. consumers might be pushed into paying more than they need to for services: Be careful if you’re offered a ‘medical credit card.’
The Moneyist shares an update
Quentin Fotrell — The Moneyist — shares an update from a woman who wrote him in 2018 to ask advice about how to make use of $150,000 she had inherited. At that time, she said she expected always to be poor. Here’s how she has fared since then.
More from the Moneyist:
Meta, Facebook and artificial intelligence
Shares of Meta Platforms Inc.
META
— Facebook’s parent company — have nearly doubled this year, following a 64% decline in 2022. To add perspective, the stock is still down 30% from the end of 2021. It trades for 18.5 times the consensus earnings estimate for the next 12 months among analysts polled by FactSet. That compares to a forward price-to-earnings ratio of 18.1 for the S&P 500.
But the slight premium for Meta, when compared to the index, might be worth paying. Consensus estimates through 2025 point to a 25.4% three-year compound annual growth rate for Meta’s earnings per share from 2022 and a two-year CAGR of 20.3% from 2023. Analysts expect the S&P 500’s weighted aggregate earnings to rise at a three-year CAGR of 11.3% through 2025, with a two-year CAGR of 8.0%.
Investors cannot help but to have noticed that Meta CEO Mark Zuckerberg no longer touts the “metaverse” with great enthusiasm. The next big thing and the best buzzword now is AI. Jon Swartz explains what Meta is doing to jump on the AI bandwagon.
Auto market news
Tesla
TSLA
is recalling 1.1 million cars sold in China to address a defect identified by the country’s State Administration for Market Regulation.
Rivian Automotive
RIVN
had some good financial news this week, and the worst may be over for its stock, as Claudia Assis reports.
Jurica Dujmovic takes a look at the “beautiful and dynamic” Rimac Nevera electric car, for which there may not be much of a market.
Other auto market news and opinion:
Ready for takeoff — finally
After many years of waiting, Virgin Galactic Holdings
SPCE
expects its Unity 25 spacecraft to make its first commercial flight in June, as James Rogers reports.
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