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I, John, will address these issues as the late John McLaughlin would address issues on his program.

A misunderstanding regarding the status of the Texas property currently exists among the parties.  Upon the advice of an unbiased third party, it was recommended to focus on where we are now without rehashing everything that has transpired regarding the move from Texas to California in 2011.  Therefore, the focus here here will be on current status of things and proposed solutions.  As it stands now, the Texas property deed as recorded in 2011 specifies tenants in common for all individuals listed on the deed including percent interest for each individual.  There have been other written agreements (and possibly verbal) that have been made which are not valid and have not been disclosed to or signed by all parties involved which attempt to give 100% ownership of the Texas property to the Scotts for some reason.  These side agreements are invalid as discussed in more detail below.  Therefore, we are left with the current legal standing of the status of the Texas property as recorded on the current deed with other agreements made between parties concerning the Texas property deemed invalid.

Resolution : Due to the misunderstanding of the actual ownership of the Texas property, the parties involved have treated the ownership of the Texas property differently with inconsistent and contradictory actions and behavior.  The Scotts have treated all equity and income from the Texas property as personal assets and income.  The Braytons have considered the assets and income regarding the Texas property as their income (and assets) but under Scott management.  Obviously, a meeting of the minds was not achieved, and the actual agreements were not properly conveyed to all parties including myself.  

Although I was a party to the agreement as requested by the Braytons (but I was not given the agreement to review and sign), my only insight into the Texas property arrangement was what played out over time between the Braytons and the Scotts via verbal exchanges up until the bankruptcy discussions disclosed agreements that were made.   I had no way of knowing that the Scotts thought that they had 100% ownership of the Texas property while the actions and behavior of the Braytons indicated that they still had ownership of the property.   Furthermore, the deed clearly confirms that intent of the Braytons as far as ownership of the Texas property.

In accordance with the actual Texas property deed, the income generated from the Texas property and all expenses to maintain and manage the property should be immediately disclosed by the Scotts to all parties as requested by the Braytons on many occasions given their understanding of the agreements made.  The period covered by this disclosure should include the time starting in 2011 when the Scotts began to manage the property to the present.  All expenses that were paid out of the Texas property proceeds should be disclosed to all parties to allow everyone to review and understand the current cash flow and the use of funds from the Texas property.  This disclosure will also give everyone an opportunity to agree to how future proceeds should be allocated/spent and to consider re-appropriation of past expenses, if required, to be used for other expenses (or put back into reserves).

There appears to be a misunderstanding on how ownership and equity is held by each party on title on the Santa Ana property.  Currently, title on the Santa Ana property is held as joint tenancy with the following individuals on title : Roger Brayton, Joan Brayton, Jim Scott, Deborah Scott.  Legally, joint tenancy equally divides equity among all individuals listed on deed with right of survivorship.  In this case, each person legally has a quarter interest in the Santa Ana property.  Although the current title on the Santa Ana property legally binds ownership and interest as such, a verbal or written agreement or understanding with regard to the interest each party has in the Santa Ana property may override what the current title legally specifies.  In this case, the Braytons contributed approximately 15K (actual number to be verified)  which represents approximately 14-15% equity (actual percentage to be determined).  The Santa Ana property has increased approximately 300% (actual percentage to be determined - an incredible return, IIMSSM).  Therefore, the initial 15K is now approximately 45K (these figures are estimates but very close to actual at the time of this letter).

Possibly due to bankruptcy conversations where the assets held by the Braytons were reduced as much as possible to protect the assets from the creditors, the initial funds that the Braytons contributed toward the purchase of the Santa Ana property were kept at the same initial level and not increased to reflect the actual equity that they have in the property due to the triple digit appreciation.   This issue can hopefully be just a clarification to make sure all parties are on the same page with respect to the Santa Ana property.  It is an important issue as other issues may be resolved by tapping into the Brayton portion of the equity in the Santa Ana property to resolve other issues  (discussed below). 

The interim loan made to the Braytons by the Scotts (Jim) has not been paid back per the agreement.  It is the Scotts prerogative to take whatever action, legal or otherwise, deemed necessary to collect on the loan which is a main point of contention between the Scotts and the Braytons.  Loans of this type are often the cause of problems, and unfortunately in this particular case, has become a major source of contention among parties.  These type of issues are often cause passive-aggressive behavior which can cause a breakdown of relationships.  The time is now to decide whether we save family relationships or whether we go down a road of irreconcilable differences.  

I am not a party regarding the loan between the Scotts and the Braytons.  The default on this loan has caused bad feelings among everyone and has most likely been a contributing factor to some of the decisions that were made regarding the Texas property that have overstepped legal bounds and have attempted to wrangle control of assets to cover debts owed.  Only the individuals involved know what the actual thinking was at the time and why these decisions were made, so I can only give from my perspective what I know, what is legally possible, and propose some solutions.

Solution 1. Loans between family members are risky and can cause major issues when one party does not perform to the agreed upon terms of the loan.  I personally do not loan money to family if I can not afford to consider the loan as a gift should the loan not get paid back for whatever reason.  My attempts to offer other family members an interest in an investment opportunity in real estate in return for a loan have been rejected, so even agreeing on a secured loan is not easy at least among family members invovled.  Unfortunately, expanding investments opportunities to friends and associates often end up badly, and I am dealing with transactions with friends and business associates who have not performed to agreements which have been the source of considerable financial hardship for me as well.  Ultimately, there is no guarantee of anything in life especially when dealing with money even with friends and family.  Therefore, the prevailing thought is that if a loan is made to family or friends, the lender must be willing to accept that the loan may actually become a gift (or a write-off).  This does not preclude the lender from taking any legal actions against the borrower, but all actions must stay within legal bounds, and the lender must be willing to accept damage to relationships that often are the result of such action.

Solution 2. In this particular case, the lender (Jim) has several options to get paid back immediately if so desired (and is well within the rights of the lender).  The lender has the prerogative to take proper legal action to get repaid if other means of repayment can not be made with the borrower.  If the decision is made by the lender to demand payment of the entire loan amount due to default, then that option is possible and can be done via various methods including using the equity that the Braytons currently hold in the Santa Ana property.  Or the Texas property generated income can be used to repay the loan according to a payment schedule, or the loan can be paid in full from the sale of the Texas property.  Subsequent decisions to place liens on property held by the borrower are not valid unless the original loan was secured at the time the loan documents were signed.  The lender (Jim)  should disclose to everyone his desire with respect to the outstanding loan so we can all move forward to find a resolution and proceed immediately with the appropriate actions so this issue can be resolved and relationships normalized.

NOTE : When I mention legal action, unless the borrower contests the terms of the loan and disputes paying back the loan in full or on an agreed schedule, there is no need to go through legal action but rather move forward by mutual agreement.  Only if the borrower contests paying back the loan immediately (should the lender decide to execute the acceleration clause) or refuses to make payments per the agreed schedule, then legal action may be necessary to enforce the agreement.

The Braytons (Roger and Joan) will quitclaim their interest on the Texas property immediately if this action has not already been performed.  This action is necessary to try to preserve assets moving forward given the anticipated onslaught of creditors who will be looking for assets to cover their debt.  The remaining individuals on Texas property title will be responsible for jointly managing the property (management of Texas property will include a property manager at this time).  Income and expenses related to the Texas property will be jointly managed by all parties with full transparency, and all parties will need to agree to how the Texas property income is used.

A complete review of records is required to determine the nature of the default notice(s) on Chase mortgage for Texas property.  It is likely that the Wells Fargo internal fraudulent business activities led to unauthorized accounts to be opened which resulted in missed mortgage payments and pending foreclosure on the Texas property.  The assertion that the Braytons were already in financial distress in 2011 which lead to default on the Chase mortgage is not supported by the facts (and I was involved personally with the discussions with Wells Fargo and Chase over a long period of time while I was in Texas to assist in the move).  Unfortunately, the records for this period have not been found and may have been lost in the move from Texas to California in 2011.  Electronic records should be available, however, Wells Fargo would need to provide these records but does not have an incentive or a good track record for providing valid and accurate information in attempt to cover their fraudulent activity.  Some effort will be required to unravel possible involvement of the Wells Fargo fraudulent business practices with respect to the missed mortgage payments on the Chase loan resulting in default notices and potential foreclosure on the Texas property.

Depending on what is found regarding Well Fargo fraud which may have caused considerable financial hardships for the Braytons, resolution of this issue may provide substantial financial relief for the Braytons moving forward.

My reference to legal documents and procedures is made to acknowledge that ultimately there is a legal system with laws that determine the course of actions that we may take if mutual agreements can not be successfully executed.  I have not created a single legal document nor have I received a single legal document for review regarding the issues that we are dealing with currently.  My hope is that all parties can step back and agree to what actions to take based on what is fair and equitable.  If a meeting of the minds can not be achieved, then the legal system is available to determine what actions should be taken based on all the documents that the Scotts have generated.  Unfortunately, legal action may result in damaged relationships and hard feelings that often are never repaired, but we should all agree that matters as significant as these often require a third party to resolve based on what is legal and equitable for all parties involved.  Priorities ultimately decide if any differences remain unresolved and what actions are necessary for resolution.

Everything stated is based on what has happened over the last five or more years and must be dealt with as soon as possible.  I have had discussions with the Braytons and the Scotts with limited success to reach an understanding of what happened and to determine how to resolve the issues.  Bottom line is that the Braytons do not agree with the assumed position of the Scotts, and vice versa.  There are 180 degree differences on many issues, and then I am stuck in the middle trying to figure out things the best I can with limited and contradictory information.  I have tried to take a neutral position and help out with solutions that make sense and that are fair and legal for all parties.  Where I am pulled into the issues directly (and where the attempt to completely exclude me has been made) is with regard to the Texas property.  I have no choice to not be involved in this matter given legal arrangements not to mention the understanding of some parities that I was and am still involved.  As a third party who is involved via legal inclusion, I continue to look for resolutions to major issues that hopefully make sense and are fair to everyone.  And why would I not want to be involved and participate?  The idea that some have that I would just want to walk away to avoid an unpleasant and disastrous situation is troublesome thought to say the least.

Unfortunately, the push back so far has been severe with almost little hope of resolving issues - irreconcilable differences.  But I believe I understand where things went off the rails, but if no one is willing to budge on what they think is the truth and consider all other input to be, well, dishonest input, then we have little or no hope in moving forward.  Hopefully, we can begin the process to resolve these issues once and for all with the realization the time is of the essence.  If we end up with irreconcilable differences which all parties should be attempting to avoid, then proceeding with the legal route (arbitration) is the next and only remaining step to resolve the issues and move forward.

This open letter is an attempt to move forward with mutual understanding and agreements to resolve these issues keeping the priority that family and relationships should be number one, and all the other issues regarding building and maintaining a lifestyle, income, status, etc. often cloud clear thinking and should be considered much lower on the scale of priorities.

As for making any real predictions, I have some additional thoughts and will include them on this site as time permits and as needed.  I will also post all feedback to this site for discussion as I receive it.

I have removed some issues here that were more in the realm of rehashing what happened.  After receiving some feedback and finding that there have been discussions regarding what happened from a single perspective, it appears that rehashing the past is unfortunately necessary to document what happened and to state the facts as clearly as possible from another perspective.   I will reintroduce some of the details originally covered here in a separate "rehashing" section which I attempted to avoid but appears to be a required section on this site.

Please use feedback link provided in feedback section on this site to provide comments or feedback.  Or email me at john@allinthefamilies.com