6231 East Mark Way, Unit 12, Cave Creek, Arizona 85331
Email: firstname.lastname@example.org Tel: 928 310 8220
To: Arizona State Senator Yarbrough December 10, 2016
Dear Senator Yarbrough
I’m part of a talented diverse citizens group working with Senator Farnsworth on legislation to transform the Arizona HOA industry, the fourth and lowest level of government after Federal, State and Municipal. This country has the world’s best military and private sectors but one of the world’s worst public sectors. Based on the weeks since November 8, I’m convinced government at all levels has no idea of the true “shock and awe” to come. Our group represents a new model of public-private partnership which Tony Blair once described as the third way, and which can help manage some of this.
My 30 yrs. on Wall Street, 10 yrs. of working with local governments across the Mountain States, and wrestling with HOA issues, is that, unless action is taken, we face a potential perfect storm with aspects of Enron, subprime and the near meltdown of the money payment system in 2008. This emanates from the $75 Billion of payments annually and the $50 Billion of cash reserves in the HOA system, part of a fundamentally flawed national housing system. I’m convinced this will be transformed with the new Washington Team. Fannie and Freddie are already being primed for what should have happened 30 yrs. ago. Arizona, much like the Veterans scandal, can be the engine of national HOA industry change as part of that.
Your staff can review the documented facts on my blog at http://www.arizonahoa.blogspot.com In my business, he/she who connects the most dots wins and there’s no place for anecdotal evidence. Just the facts. Just the facts.
One fact we know is that in Arizona alone in 2008, $1 Billion of taxpayer’s money was lost with two banks enabled by HOA Management Companies. But even this pales in comparison to the potential I see for terrorist incursion due to failed enforcement of Patriot Act anti-Money Laundering procedures, risks to the ACH payment system, and a financial meltdown of FirstService, the largest HOA Management Company nationally. This could result, in a worst case, in millions of homeowners being current on their mortgages, yet faced with foreclosure.
I believe the current federal and state banking regulations, with or without Frank Dodd, are sufficient to bring certain bad actors to heel, including banks such as US Bank, Mutual of Omaha and Western Alliance. And this will not be the first time I have played a part in that. But all we are doing is exposing the problem, without providing the solution, which only smart legislation and regulation can bring. I implore you therefore to make this a high priority. I should add one other thing:
I worked in suicide prevention in the UK. With 50,000 hits now on my blog, the feedback I can never disclose, makes me feel I’m back there. These are not isolated examples but acts of legal terrorism as I’ve previously testified. Hence my favored legislative fix, if I had to pick one, and having defeated a SLAPP suit myself, is to extend Arizona’s anti-SLAPP protections to the “right to petition” HOA Board Members.
But there are other essential fixes. HOA Management Companies for instance are running a shadow banking system with people hardly equipped to deal with landscaping issues. And Realtors are effectively underwriting faulty HOA disclosure by those same Management Companies, none of whom are licensed by anybody.
Achieving public awareness on financial issues is not easy, until 2008 happens. So, we are conducting an experiment. We’d ask every legislator to participate by asking their HOA and Management Company, to provide user names and passwords on a read only basis to access your HOA bank account online. You may be shocked by their refusal. I’d be happy to meet.
Thank you for your service. Respectfully John Sellers
All Arizona Senators
All Arizona State Representatives
Trump Transition Team
Dennis Charlton, Arizona Department of Financial Institutions
Martin J. Gruenberg, FDIC Chairman,
Thomas J. Curry, U.S Comptroller of the Currency
Richard Cordray, Director, Consumer Financial Protection Bureau
John C. Williams, President and CEO, Federal Reserve Bank of San Francisco
Senator Farnsworth Working Group
Various industry participants