Lifting the Legal Veils
A group of mothers in San Francisco once read about a 25-year-old entrepreneur and mother of four struggling to raise her family in Afghanistan. The group then used a website that
tapped microfinance institutions to lend the mother
$25 each, money she used to buy a loom and raw materials for her carpet-weaving business. The money
was not a gift since she repaid her debt on a monthly
basis, and once the repayment was complete, the
money was either redistributed or the lenders could
keep it. As the website grew over the years, one of
the lenders in San Francisco had rolled over her $25 to help more than 200 people.
When I read this a few years ago, what struck me most was how only a few people were
able to change another person’s life through cyberspace communication. What strikes me
now is how complicated the process must be for it to actually work. And work is does. The
website has a repayment rate of 98% and nearly $1 million is lent in any given week. Oh
yeah, and that mother has since hired two employees and plans to expand her business.
Perhaps the creators of the website were onto something. Instead of getting overwhelmed by the enormity of a big-picture problem, in this case crippling poverty, the
website figured out a creative approach to a solution and worked with a team who could
assist in the details, the strategy and the overall process. In our industry, the big-picture
problem is the trillions in debt coming due, but who knows? Maybe having a trusted team
to pitch in, roll up their sleeves and create some solutions, this impeding problem can be
alleviated into something a bit more manageable and less destructive. RESoCal explores
this issue and more in our legal section, starting on page 85.
Our legal section explores the myths and missteps, commonly encountered by borrowers that ultimately lead to the necessity for teams of experienced real estate lawyers
to come in and fix the situation. While a modest $25 contribution from members of a
women’s group is obviously not the answer for a large-scale private lending model, the
agreement struck between the lenders and the entrepreneur in Afghanistan was straightforward and lacked “an Oz-like curtain” that exists between borrowers and servicers.
Lifting those legal veils in these days of financial turmoil is just one of the services that
topnotch legal firms are called on to provide today.
Also in this legal section, with the few transactions taking place fraught with pitfalls,
some of Southern California’s most prominent real estate lawyers outline the most pressing legal issues of the day—and tell what they are doing to survive. Check out our legal
Q&A on page 88 to read their answers, which address issues ranging from water supply
and lack of debt in the market to survival tips like adopting flexible billing practices.
The section provides a quick guide on how to avoid the financial turmoil that is one of
the inherent risks of real estate contracts, and it offers advice on what to do if you find
yourself involved in such turmoil.
Natalie Dolce, Editor, West Coast Region
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Editor, West Coast Region | Natalie Dolce
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