Association Members Are Your Neighbors!

What appalls me most about the negative press around HOAs is how some Board Members – either individually or collectively – treat the Members of the Association like crap.  The Members aren’t your competitors; they’re not your enemies; they’re your neighbors!  Why can’t they be treated that way? Continue reading

Posted in Viewpoints, You BLOG | Tagged , , , , , | 3 Comments

Elections – My Recent Experience

[Updated 10/05/2017 with additional Eligible Votes information.]

For those of you that took my survey on Board Elections – thank you!  I still owe you a summary of the results, which I have to say were very interesting.  I’ve also been unusually busy the last few weeks with some consulting work (custom programming and data analysis).

But I’ve also been “recovering” from my own HOA’s elections last week. Continue reading

Posted in You BLOG | Tagged , , , , , | 1 Comment

Do You Know Where Your Documents Are?

Something funny happened in my HOA this month.  Not “funny – ha ha”, but “funny – uh oh.”

My Association was incorporated in June of 2004.

I bought my home in this neighborhood last year in May 2016, and as part of the obligatory home-buying paperwork tsunami, I received a number of items from the then-current management company of the HOA as required by ARS 33-1806.  Among them was a copy of the Association’s CC&Rs and Bylaws.  The copy of the CC&Rs had the stamp of the Maricopa County Recorder’s office, but the Bylaws were not so emblazoned.  My assumption was, of course, that “these are indeed the Bylaws of the Association”.  As it turns out, this was the same copy being sent to all new owners in the neighborhood at the time, and since, and probably for some time before.

Further complicating things, this copy of the Bylaws had a section at the bottom for endorsement by the original Secretary of the Association to attest that these were, in fact, the approved Bylaws.  But the copy I and other new homeowners were receiving was not signed.

Fast forward to sometime in the last month or so.  Apparently someone (probably at the management company, but some details are hard to come by) tried to locate an “officially sanctioned” copy of the Bylaws among the Associations papers, both hard-copy and electronic.  None was found.  Questions were asked; an attorney was consulted.  (None of this was discussed in an open session meeting, and while I don’t really know any details, I’m assuming the actions in this paragraph occurred.)

At the July board meeting (I’m not on the board, but I have attended every meeting since moving in), our management rep said something about “the attorney said he would create Bylaws” for a stated sum, which I thought was odd, but never really had an opportunity to ask anyone about it.

Then yesterday, when I wrote to our management rep referring to a section of the Bylaws about elections (ours are upcoming in September, and yes, I’m a candidate), her response was:

Technically you don’t have legal Bylaws since they were never approved and signed.

WHAT?!?!  Don’t tell me the Association — now in it’s 13th year — has been operating according to a set of Bylaws, and now all of a sudden they “don’t exist”!!  The Association (in the form of the management companies) has been sending this to new homeowners telling them “this is the way we do business” for years, and they’ve been using the Bylaws in all the ways Bylaws ought to be used!

After seriously questioning the situation in my Email response, the management rep replied again, writing: “the attorney’s opinion is they [the board] cannot run according to what the Bylaws states since they were not approved.  I did talk to the Board about having the attorney draft up new Bylaws to approve and sign so they will be on the up and up.”

I was flabbergasted, to say the least.  Expletives were said.  Blood pressures rose.

Between yesterday afternoon and this morning, I tried numerous avenues to resurrect a copy of the “official” Bylaws:

  • I contacted the developer, DR Horton.  I was told they purge such documents after 10 years, and gave me the number of someone else to call.  I left that person voice mail, but have received no callback.
  • I searched the Arizona Corporation Commission files on our Association — again, having done this search a few months ago when I wondered about the presence of an executed copy.  Bylaws are not required to be filed with the AzCC, and indeed were not.
  • I searched the Maricopa County Recorder site (yet again – also not my first time), looking at all documents posted with our Association name attached, as well as numerous documents associated to DR Horton in the relevant timeframe; nothing there either.
  • I’m pretty good friends with my realtor, but he really didn’t have any useful guidance on short notice, but shared my concern and offered to ask others in his office if they had any suggestions.
  • An acquaintance in the Arizona HOA-homeowner activist space suggested searching the Corporation Commission (already a dead end), but then also suggested making a Freedom of Information Act (FOIA) request of the IRS for any records submitted by the Association relating to their filing for nonprofit status.  Turns out even the IRS doesn’t want a copy of your Bylaws.
  • I wrote an Email to the original management company from 2004 through the Association’s first transition in mid-2014, hoping that they would have something archived — but no return message from them either.
  • I even contacted a recent acquaintance of mine who is a Parliamentarian about the situation.  After some lively discussion about Bylaws in general, he had some ideas on how to proceed if none are found — but nothing new to add regarding a search for them.

My next approach (spoiler alert: which worked!) was to search the Maricopa County Assessor’s GIS Maps web site for homeowners who had moved into the neighborhood in the first couple of years of its existence, and whom I had met or chatted with around the community.  My thought was that surely they would have received an executed copy from the original developer back in the early days.  I found one person I had befriended when hanging door hangers in the neighborhood about the Block Watch program back in January.  I sent her a message on, explaining the situation and asking if she might have a copy of the signed document.

Much to my amazement, she replied within an hour:

Well, to say you have good timing is an understatement. I have been cleaning out closets in the past few weeks (we’ve accumulated some “stuff” in 12 years) and came across all of our purchase documents. I set them aside just last night thinking I should go through them and thin the pile.  So, you’ll be happy to know, I have a signed copy of the bylaws.

I’m told soon the official copy will reside on the management company’s web site.  Unfortunately, our board has stopped maintaining their separate site with community documents.  (The board even failed to elect a Secretary mid-year when the previous President, Secretary, and Treasurer each resigned.)

So the moral of the story is that HOA Boards — especially the Secretary — have a fiduciary duty to maintain copies of all important Association documents, but in my opinion they rely too much on management companies to do this for them.  As a result, important documents often go missing, especially when Associations transition between management companies.  I believe copies should be kept separately by the Association, and that Associations should audit the documents maintained by their management company.

Where are your official copies of governing documents?  “Trust but verify” would seem to be a good approach.

Posted in Home Page, Viewpoints, You BLOG | 5 Comments

Board Elections – A Survey

I think most Associations tend to hold their Annual Member Meeting and their Board Elections at the same time, and I have a sense that most Associations elect officers in the fall — or at least that’s what I’ve heard from a few folks I’ve talked with.

So with elections on some people’s mind, I thought I’d put together a brief survey about Board Elections.  There are 12 questions plus a few of the usual demographic items at the end, and should only take you a couple of minutes.  I hope you’ll participate!

Take the HOA Board Elections survey by clicking here.  Please forward this link to others you know that might be interested.

At the end, you can choose to receive an Email of the compiled results.  I’ll also share some of the results here on HOA Perspectives.

Thanks for helping out!

Posted in Home Page, Surveys | Tagged , , , , | 2 Comments

Under New Management

You might have seen JCT’s post a short time ago about seeking someone to take over the HOA Perspectives web site.

I am that volunteer.  With a good bit of Word Press experience and HOA exposure, I hope to provide a similar viewpoint and tone as you’ve become accustomed to reading.

Expect to see very few changes… but maybe a few additions.  For example, I’d like to extend the reach to a few other social media venues, like an email list, Twitter, and occasional surveys for input.  I’ve also registered and pointed it to the WordPress-hosted site.

If you have suggestions, send them to me via email:

Ray at

Posted in Home Page | 3 Comments

Community Manager ordered to pay $1.6 million to HOAs


Darcy Spears (KTNV)

6:00 PM, Jul 7, 2017

Dozens of Home Owners Associations are out a ton of money. Over a million bucks all together. Contact 13 finds out who took it and how they got away with stealing homeowners’ money. Las Vegas, NV

Community Association Managers are supposed to look after homeowners and their HOAs.  But the Nevada Real Estate Division says one manager was only looking out herself.

Contact 13 obtained this order from the Commission for Common-Interest Communities.  It says community manager Leslie White defrauded 34 HOAs out of more than $1.6 million. White took much of that money after surrendering her community manager certificate. 

Real Estate Division investigators found fraud and hundreds of violations of state law with the two businesses white ran under the names Associated Community Management and Path Community Management.

The state says White used electronic signatures to transfer money that was not approved by HOA boards. And one of her companies “…was paid in excess of its contract for virtually every association it managed.”  

White has 60 days to cough up nearly $3 million dollars.  That includes fines and fees to the state and restitution to the HOA’s. 

We tried to contact her, but the phone numbers we found were disconnected. 

The case has been turned over to the Attorney General’s office for possible further action. 

Below is the list of Home Owners Associations impacted in this case:

Alterra Homeowners Association:         $19,592.71

Amber Wood Homeowners Association: $36,535.33

Avignon Homeowners Association: $67,070.70

Avila Court Homeowners Association: $22,980.36

Bella Lago Homeowners Association: $83,900.14

Benton Homeowners Association:         $30,485.73

Bonita Vista Homeowners Association: $34,893.77

Brighton Homeowners Association: $35,873.21

Calabria Homeowners Association: $36,353.90

Carmel Ridge Homeowners Association: $42,346.78

Centennial and Lamb Association: $75,958.23

Chatham Hills Homeowners Association: $61,536.65

Cherry Lane Homeowners Association: $81,207.34

Country Glen Homeowners Association: $27,208.24

Crestwood Homeowners Association: $9,000.00

Cumberland Homeowners Association: $26,448.00

Greenwood Homeowners Association: $19,650.00

Hillcrest Homeowners Association: $6,980.00

La Siena Homeowners Association: $56,763.41

Manchester Homeowners Association: $159,495.74

Mesa Verde Homeowners Association: $36,175.54

Moreno Homeowners Association: $91,114.62

Murano Homeowners Association: $62,897.04

Newbury Homeowners Association: $75,795.43

Paloma Homeowners Association: $35,063.94

Pinecrest Homeowners Association: $43,813.86

Sheffield Homeowners Association: $21,971.60

Somerset Landscape Maintenance Association: $15,653.17

Sterling Court Homeowners Association: $53,856.06

Sunrise Valley Estates Homeowners Association: $87,050.91

Terraza Homeowners Association:         $32,350.00

Trailwood Homeowners Association: $13,622.50

Whisper Rock Homeowners Association: $59,822.42

Posted in Viewpoints | Tagged

When an HOA totters financially

Arizona Homeowners Forum

Posted: 05 Jul 2017 07:44 AM PDT, Reposted 7/6/2017

What happens to a Homeowners Association as it totters financially is fascinating.

In the case of the Crossings at Willow Creek, recent hearings in Yavapai County Superior Court confirmed that there is no bankruptcy alternative. That’s because a Homeowners Association is a corporation in name only. The members are on the hook for everything as it’s really a partnership.

We as property owners have scheduled a Member’s meeting on July 17 at 5:00 at the Community Room at 1235 E. Gurley St., Prescott to appoint a Board, without which Judge Mackey is almost certainly likely to appoint a receiver soon. This would be analogous to a mentally ill person with millions in the bank having their bank accounts run down by attorneys and other parasites.

Carpenter Hazelwood, who resigned as attorneys for the HOA last year, triggered this by arguing for a receiver to be appointed when faced with records requests pursuant to a simple AZDRE Order.

It’s already acknowledged properties in the Crossings are worthless because they can’t be sold. What then could homeowners be responsible for above that? Can their property values go negative?

Remember there is no insurance for the HOA now. Under a worst-case scenario, the liabilities to the HOA, and then the members, could easily amount to $20mm or more, especially if an accident takes place in the wash. That’s $250,000 each lot. So yes, property values could go negative.

It takes a lot of dot connecting to figure out what is involved here and we have been doing that for almost 10 yrs. So ahead of the meeting, I will be taking the dots one by one daily to make things clearer. This will be done via the blog at We’ll also have the documents pertinent to the case available soon via links posted there

A couple of points

  • The Meeting is technically members only but some contractors with construction deposits are welcome
  • Any member wishing to appoint an agent, especially an attorney, must have that approved ahead of time by us.
  • Out of town Press will be welcome but need to be accredited first. Please do that by email to
  • There is a current investigation underway by Detective Brazell, Badge #350, at the Prescott Police. If you have relevant information to give to him you would not wish to share with us, his number is (928) 777-1925
  • Conversations with him leave me totally confident the meeting will be safe and not masked by threats as has previously occurred.

Feel free to post questions or comments on the blog as it will not be censored except for totally outlandish comments



A mere selection of issues to be addressed daily will include:

  • Why could the City of Prescott file bankruptcy over this?
  • Why are the US Supreme Court 9thCircuit Rulings in the Kayanne Riley case so relevant?
  • Why there will be no Big Chino without fixing the Crossings – properly?
  • Why was the subdivision ever built in a floodplain anyway at the intersection of all the City’s water mains, including those for the Big Chino, Major Sewers, a main road, and a wash carrying more water than the Colorado River in flood -10,000cft/sec+
  • Is Carpenter Hazlewood looking to collect fees or did something happen with a recent foreclosure they would like to cover up?
  • Why is Chubb Insurance engaged with high powered attorneys? –
  • What is the role of Metro Phoenix Bank here?
  • Where is Justin Scott?
  • Where is Kathleen Yamauchi?
  • Why did the Board, Attorneys and Management Company all resign on the same day?
  • Who jumped ship first and why?
  • And a lot more dots!

John Sellers

Posted in Viewpoints | Tagged , ,

Defining HOA-LAND

An important article, click to open and view the following link:

Posted in Viewpoints | Tagged , | 1 Comment

HOA Attorneys: Lacking Moral and Ethical Perspective

Source: HOA Attorneys: Lacking Moral and Ethical Perspective

Posted in Viewpoints

Arizona HOA Honey Moneypot

Reposted from

   The “Arizona HOA Honey Moneypot“ – why all these problems in Arizona HOA’s?

  • Honey attracts bees. Money attracts the worst of behavior
  • It’s the cash stupid!
  • We estimate that $3bn of CASH is sloshing around in HOA bank accounts owned by YOU
  • Worst example which went unnoticed in the excesses 2008 financial crisis
    • Community Association Banc (CAB), a division of First National Bank of Arizona (“FNBA[1]”) attracted over $1bn of deposits in the months prior to 2008
    • Only $75mm was funneled back to communities
    • Only the FDIC knows where the rest went
    • They used wholesale deposit harvesting via HOA Management Companies
    • Few Boards even knew or know where their cash is
    • The only credentials of the President of CAB, a $1.5 billion plus bank, were membership of CAI, HOA management, and ownership of Las Vegas nightclub
    • I’m not making this up – See this – click HERE
    • When FNBA went under in the shadow of IndyMac, the Federal Government injected $862mm of FDIC taxpayers money
    • In a highly unusual step, they also bailed out UNINSURED DEPOSITORS
    • Many Arizona HOA’s had millions in excess of the FDIC insurance limit
    • We believe the decision was political
  • What this got to do with you?
    • Be aware there are powerful dark forces at work in the HOA industry
    • Few Management Companies, and none of the so called specialized HOA Law firms, have incentives to promote transparency
    • The Edge at Grayhawk lost $2.4mm in fraud because nobody was keeping an eye on the Management Company
    • CAI , a national organization, has huge lobbying power because of their access to money


[1] Not to be confused with National Bank of Arizona

Posted in Viewpoints | Tagged

AZ HOA abuse

In a nutshell:
1. A homeowner with two lots in an Association falls behind about two years back, $1,000 per lot
2. They pursue him for only one lot BUT he pays the amount for both..$2,000
3. They then pursue him for $1,000 for the other lot
4. They successfully foreclose for $1,000 plus legal fees. Back to $2,000
5. They sell the lot for $18,000
6. He neither received the excess nor does the  $16,000 show in the HOA accounts.
7. So where did it go?
8. Gets better.
9. They also filed a lien on his house where he lives. Not in the subdivision because he owns vacant lots
10. The town where he lives wants an easement over his house for a neighborhood water project which he wants to do but there a lien
11. He has no way to lift the lien consensually because there’s no HOA Board, MGMT Co, or attorney..

He’s screwed

Posted in Viewpoints | Tagged , ,

How to reset your password

Reposted from another site:



Please enter your new password.




Sorry, the password must be more than 8 characters.


boiled cabbage


Sorry, the password must contain 1 numerical character.


1 boiled cabbage


Sorry, the password cannot have blank spaces




Sorry, the password must contain at least one upper case character




Sorry the password cannot use more than one upper case character consecutively.


50damnBoiledCabbagesShovedUpYourAssIfYouDon’tGiveMeAccessNow !


Sorry, the password cannot contain punctuation.




Sorry, that password is already in use


Posted in Viewpoints | Tagged

Who’s insuring your HOAs wallet?

Guest Blog:

The last of three OAH cases on books and records took place this week. In all cases, the books and records at issue were copies of:

  • The user names and passwords for HOA bank accounts for members on a read only basis
  • The signature cards held by the bank for those accounts.

Banks involved include US Bank, Alliance and Mutual of Omaha. The FDIC has clearly stated, IN WRITING, that for their deposit insurance to flow through the Management Company to the HOA, as beneficiary, the nature of the FIDUCIARY RELATIONSHIP must be clearly identified in the documentation. Banks in the industry have confirmed that the FDIC also tracks with Tax Identification numbers. In most cases, only the Tax ID of the Management Company shows. Rarely the HOA. If these records do not exist, an additional FDIC requirement is not satisfied.

Trestle Management testified under oath this week that they do NOT have a FIDUCIARY RELATIONSHIP with the HOA. You can access the FULL HEARING AUDIO but for the critical 20 second testimony extract, click HERE

Only the FDIC can resolve this. However for HOA’s looking to move their accounts to two banks knowledgeable in HOA’s, and doing it right, just email

Posted in Viewpoints | Tagged ,

Digital signatures

Digital signatures, computer-documents storage pose challenge to HOA board

Digital signatures and computer-documents storage pose a challenge to HOA board.

Stockphoto / Getty Images

Digital signatures and computer-documents storage pose a challenge to HOA board.

 Donie Vanitzian, JD

Question: Our association seems to be stumbling over itself when it comes to electronic documents. First, it’s embroiled in litigation and received a subpoena for documents, which prompted our association attorney to have the board gather all electronic correspondence for a specified period of time. The problem is that some directors deleted documents from our computers, sold their units and moved out of state.

Separately, one of those departed directors made a mandatory rule that all homeowners had to sign their communications with a digital signature or the board would not accept an owner’s email — even if it was an emergency. Is an electronic signature legally binding? Is there a difference between electronic and digital signatures? And how do you know who is actually signing something with these signatures?

Answer: Litigation is like poker; you must play the cards that are dealt. Know too that you simply cannot change the past. Your duty in responding to a subpoena is to produce all relevant, non-privileged documents in the custody or control of you, your attorneys and third-party agents. If the documents no longer exist or are unavailable, there may be little you can do. The party seeking discovery may question your association on this matter and may seek discovery from the departed directors to see if they have retained any records.

The bigger question, however, is when and why were the records deleted. The destruction, alteration or failure to preserve evidence is known as “spoliation,” and it is a big deal. 

Depending on the association’s degree of culpability, if any, and the prejudice to the other side, a court may impose monetary sanctions, prevent the association from presenting certain evidence, terminate the association’s case altogether or, even worse, enter judgment against it. In a jury trial, the court may instruct the jury to assume that the missing evidence would be unfavorable to the association. If that were not bad enough, spoliation is also a criminal offense under Penal Code section 135.

Given the potential risks involved in not producing the documents, your association may want to consult with a computer forensics expert to see if the files can be retrieved from the computer.

Unlike the low-tech, but highly efficient, paper shredder, deleted computer files are not always irretrievable and sometimes can be found on the hard drive, backup tapes on Internet-based storage and backup systems such as iCloud, Google Drive or Dropbox. If this proves unsuccessful, then the association may wish to solicit the cooperation of the departing directors to obtain the documents. They would be wise to cooperate because they may have liability to the HOA for failing to preserve the records.

As for electronic signatures, they cannot be unilaterally imposed for all communications by a single director. Associations act through their board of directors. And even if such a requirement was authorized by the full board, directors have a fiduciary duty to act in the best interest of the association and it would be inconsistent with that duty to arbitrarily ignore vital email communications from titleholders. But that is not to say that electronic signatures are not useful tools.

To be clear, an electronic signature is any electronic symbol used with an intent to sign a document. Under the federal E-Sign Act and the Uniform Electronic Transactions Act (adopted by every state except Illinois, New York and Washington), the parties to an agreement must express an intent and agree to execute the agreement electronically, which often takes the form of separate correspondence or language within the agreement indicating such an intent. 

Like any signature, though, an e-signature can be challenged by a party who claims that it is not his or her signature or that consent was not given. This is where digital signatures come in. They are generated by software applications and provide greater surety to both the person signing a document and the one receiving it. 

Last year, to eliminate any confusion over electronic versus digital signatures, California adopted Assembly Bill 2296 clarifying the standards of what constitutes a digital signature.

Under the bill, digital signatures use software to generate a signature that is unique to the person using it, must be capable of verification (such as by collecting the email and Internet protocol address of the signer) and are linked to the executed document in such a way that if it is changed the digital signature is invalidated.

As one provider explains, digital signatures are akin to “electronic fingerprints” and create a coded digital message that securely links the signer with the document being signed and verifies the chain of custody of the document.

A valid contract can be created using electronic signatures that do not meet the stringent criteria of a digital signature, but the risk of a party challenging the validity of a signature is dramatically reduced by using digital signatures. Digital signatures are, in essence, the Internet equivalent of a notary — but without the cool stamp.

Posted in Viewpoints | Tagged

How to resign from your HOA Board

Reposted from

The best letter yet when you want to resign from your HOA board. Not that we want you to resign, but if you must, do it with a smile.

I resigned when things got tough. Today, I wish I hadn’t but at the time it seemed right. We adocates have to learn to stay even when its tough.

Dear Mr. President and Members of our Board,

Although it has been an intoxicating experience to serve as your Trustee, I regrettably must submit my resignation before I have a nervous breakdown.

When I ran for office, I didn’t realize I would actually have to come to secret board meetings and second your every motion to go after members who refused to live by your rules. You know, the ones we keep voting on and don’t ask members what they want? The duties listed for Trustees forgot to mention we would be fining neighbors for planting tulips instead of begonias, parking in front of their own homes, and opening their garage doors for more than 15 minutes at a time. Of course I realize we don’t have to fine our friends and can grant waivers for those who kiss our ass, but I am not comfortable with selective enforcement and find it distasteful to remove the toilet paper adorning my house so frequently.

When Martha sat on the curb and cried after we completed the non judicial foreclosure, I had a difficult time explaining to the deputy that it was because she refused to get rid of the cat after her husband died. I did change my email as you suggested with the death threats pouring in but considering your mother-in-law down the block from you, has had two cats for the last 10 years, it was hard to explain to Martha and her neighbors why hers was not grandfathered in too.

When the members came in mass with pitch forks after we assessed them for the new golf course, I wondered why you found it so problematic to actually put the notion to a vote. I realize it will increase property values with a golf course in the area, but how high can property values go since we have mostly double-wides in this subdivision? Having the attorney write and explain how members would be charged with ultra vires if they continued to harass the board regarding the new golf course worked. Now our neighbors are forming a coalition to petition the board for recall.

My resignation is effective immediately. I will always remember my term in office with some affection as it led to having Martha take up residence in my back room. She is quite the chef and I’m afraid my culinary druthers are now spoiled. I am off to locate the guy with the petition and I assure you, none of the alligators released in the pond in the common area are mine and none of the kittens left on your front porch came from Martha’s cat.

With Warmest Regards,

Your Faithfull Volunteer

Posted in Viewpoints | Tagged | 1 Comment

Reprinted from

The blog referenced in the title is a site that all Arizona residents should follow.

Dear (HOA Insurer – see LIST)                                                                                                                       February 13, 2017

I am part of an Arizona homeowners group exposing serious risks to the financial system because of financial malpractice in the HOA industry. But we are also fighting legal terrorism on homeowners by their HOA’s via their attorneys if they dare ask questions, especially about money. See the list in Attachment 1.

You are financing much of this.  In 2007 legislators instigated an Administrative Law process via the Office of Administrative Hearings (“OAH”) designed to prevent disputes over garbage cans escalating, leading to $hundreds of thousands of legal bills in Superior Court, and occasionally foreclosures.

Arizona Superior Court data has confirmed that Court actions since 2007 involving HOA’s and these attorneys numbered 16,744 compared to 150 at the OAH. It also indicates 90% of these stem from HOA’s. So much for Alternative Dispute Resolution. Lawsuits and debt collection, see Attachment 2, are major sources of revenue for these attorneys. The other is defending OAH and other cases paid for by you.

My wife and I are members of 4 HOA’s and big believers in using the administrative process. We have had 5 prior OAH cases, all of which involved transparency issues. The first case we won was constitutionally challenged in Superior Court in 2008 by HOA attorneys. Thanks to the then Senator O’Halleran, the HOA blinked, and withdrew its appeal. Ekmark & Ekmark then “resigned” leaving the HOA to fight for reimbursement from CNA of almost $40,000 of legal fees fighting a simple records request.

Standard practice for these attorneys is to intervene with you on the HOA’s behalf. See a recent case in Attachment 3. They argue this is the start of a lawsuit because an unfavorable Administrative decision compromises a subsequent Superior Court appeal by the Administrative ruling. BUT AN ADMINISTRATIVE HEARING IS NOT AN “ACTION”. The claim is simply enforcement of regulations with the maximum cost being a $500 filing fee. Note this may become abundantly explicit pursuant to two bills, SB-1289 & SB-1072, the latter part of a national constitutional group’s efforts to reinforce the separation of powers. See Attachment 4. The goal being to uncouple completely the OAH process and Superior Court so that any appeal would be close to a nuevo trial. Consequently, the need to defend an Administrative proceeding disappears, if it ever existed anyway. As insurers, you might ask to be notified of such proceedings but, properly worded, you would not be obliged to defend something where you cannot recover attorney’s costs. Please support these bills.

Furthermore, as a banker and risk manager, and with your significant risk to the HOA industry, I would be remiss if I did not alert you to one of the biggest financials swamps I’ve seen working on Wall Street. This affects the 68 million of American homeowners who pay $75billion annually to a totally unregulated group of players – HOA Management Companies acting as shadow banks. See more below.

We’d welcome a dialogue.


John Sellers

Posted in Viewpoints | Tagged ,

Trusts aren’t a surefire way of making HOA property judgement-proof

Click on the title below to open and view the document.

Trusts aren’t a surefire way of making your HOA property judgment-proof

Posted in Viewpoints

HOA AZ Superior Court Cases Statewide since 2007

From: John Sellers <>
Date: January 26, 2017 at 3:59:51 PM MST
To: John Sellers <>
Subject: HOA Superior Court Cases Statewide since 2007
Here is the link below to the 11MB pdf comprising the fully compiled list of Superior Court Cases in Arizona since 2007 involving HOA’s.  
A staggering total of 16,744 INDIVIDUAL ACTS OF LEGAL TERRORISM
At a mere $10,000 say per case …..that’s $167million of legal fees
All duplications have been eliminated. Where in doubt, say a dispute with a landscaper not a homeowner, that was eliminated too. If you don’t see your name do not be surprised because cases were selected by doing an electronic sort in most cases by attorney name. As long as one of the attorneys was involved for the HOA, your case should be there but you will not see your name so don’t even bother looking.  Simply because we never asked for a sort on Buck, Dessaules or Cheifitz 
Of all the data collection tasks, many that your resident geek here was able to do easily, this really was a painstaking teeth pulling exercise. Even I felt daunted at times. Partly because the Arizona Judicial computer systems are steam driven and make the ObamaCare web site look 21st century. And they are a law until themselves with Rule 123
But that headline number matters. It also highlights the quality of these attorneys. Hardly Rhodes Scholars if they can average 40 cases a year
I’ll be challenging all the attorneys to put up or shut up with this…..asap!!!!! 
John Sellers
6231 East Mark Way, Unit 12
Cave Creek
Arizona 85331
<HOA Attorneys.pdf>
Attachments area

Preview attachment HOA Statewide Superior Court cases Jan 1 2007.pdf

HOA Statewide Superior Court cases Jan 1 2007.pdf
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Arizona Homeowners Forum

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Comments to and reprint with credit to the New York Times – the next crisis?

Posted: 22 Jan 2017 04:17 PM PST

See the article below with comments sent to the author
To: Julie (Creswell – New York Times).
I believe I’ve identified the next real estate crisis and your article is at the Nexus of that.
62 million homeowners live in HOAs. Those homeowners pay $75billion annually in dues. With $50billion of cash.
All those monies are handled and managed by a shadow banking system called totally unlicensed Management Companies. The biggest of which being FirstService which I believe having spotted the first Enron long before, is the next one. Plus, we have an industry ignoring the Patriot Act, abusing the ACH money transfer system raising the spectre of ISIS intrusion. There’s more. FDIC insurance we believe is faulty. But the worst is where because of PUD riders in mortgages for HOAs, if FirstService disappeared, millions of homeowner’s current on mortgages could be in default.
Hers the Nexus with your article and it’s common with subprime.
Whenever you get new mortgage provider entrants, they don’t have the capacity to be gracious with “minor” defaults as their predecessors. Especially if interest rates rise incentivising them to force higher rates on borrowers.
Quicken Loans, the New Mortgage Machine
A Mortgage Lender Digs In Its Heels The New York Times
DETROIT — A low buzz fills the air as an army of mortgage bankers, perched below floating canopies in a kaleidoscope of vivid pinks, blues, purples and greens, works the phones, promising borrowers easy financing and low rates for home loans.
By the elevators, nobody blinks when an employee wearing a pink tutu bustles past. On any given day, a company mascot, Simon, a bespectacled mouse, goes on the hunt for “gouda,” or good ideas, from the work force.
A visit to the headquarters of Quicken Loans in downtown Detroit may seem like a trip to a place where “Glengarry Glen Ross” meets Seussville. But the whimsical, irreverent atmosphere sits atop a fast-growing business in a field — the selling of the American dream — that has changed drastically since an earlier generation of mortgage lenders propelled the economy to near collapse in 2008 by issuing risky and even fraudulent loans.
In the years since the crisis, many of the nation’s largest banks pulled back their mortgage-lending activities. Quicken Loans pushed in. Today, it is the second-largest retail mortgage lender, originating $96 billion in mortgages last year — an eightfold increase from 2008.
Privately held Quicken, like some of America’s largest banks before it, has also landed in regulators’ cross hairs. In a federal false-claims lawsuit filed in 2015, the Department of Justice charged that, among other things, the company misrepresented borrowers’ income or credit scores, or inflated appraisals, in order to qualify for Federal Housing Administration insurance. As a result, when those loans soured, the government says that taxpayers — not Quicken loans — suffered millions of dollars in losses.
Quicken Loans today is the F.H.A. insurance program’s largest participant.
Executives at Quicken Loans deny the charges, maintaining, among other things, that the government “cherry-picked” a small number of examples to build its case. In an aggressive move, the company pre-emptively sued the Department of Justice, demanding a blanket ruling that all of the loans it had originated met requirements and “pose no undue risks to the F.H.A. insurance fund.”
Quicken’s suit was dismissed. But it reflects the in-your-face style of Quicken Loans’ founder and chairman, Dan Gilbert, the billionaire who once publicly excoriated the N.B.A. superstar LeBron James for leaving the Cleveland Cavaliers, in which Mr. Gilbert has a majority stake. He also owns significant chunks of central Detroit, where Quicken Loans is based.
Mr. Gilbert, who founded the company in 1985, sold it to the business software company Intuit in 1999, before buying it back with other investors in 2002.
He is working to rectify the city’s downtrodden image with streetcars, upscale cafes and boutiques, and fiber-optic data, making him a hometown hero. Late last year, Quicken Loans won a motion to move the Department of Justice case to a federal courthouse roughly three blocks from its Detroit headquarters.
Sitting on the edge of a chair in his office, the Motor City’s skyline a steel gray in the late-afternoon November sun, Mr. Gilbert said that his company has been unfairly targeted. “You want to know what this case is about?” he said. “Somebody probably put up a whiteboard and said, ‘Here are the 10 largest F.H.A. lenders, now go and collect settlements from them, regardless of whether they did anything wrong.’”
In court documents, Quicken argues it has the lowest default rates in the F.H.A. program. It projects the government will reap $5.7 billion in net profits from the insurance premiums for loans made from 2007 to 2013, after paying out any claims.
A spokesman for the Department of Housing and Urban Development, which is home to the F.H.A. program at the center of the case against Quicken, declined to speak about the lawsuit.
Late last year, Donald J. Trump named a former Quicken Loans lobbyist, Shawn Krause, to his H.U.D. transition team. A Trump spokeswoman did not respond to an email asking about potential conflicts of interest. In an emailed statement, Quicken Loans said the fact that Ms. Krause had come from the largest F.H.A. lender in the country “bodes well for the positive impact she has, and will, make on H.U.D.”
In the years since the financial crisis, Quicken has emerged as a leader in the nation’s shadow-banking system, a network of nonbank financial institutions that has gained significant ground against its more heavily regulated bank counterparts in providing home loans to Americans. Increased regulation and decreased profits sent the nation’s banks packing.
Nonbanks, like Quicken, have filled that gap. Today, Quicken is the nation’s second-largest retail residential mortgage lender, behind Wells Fargo, but ahead of banking giants like J. P. Morgan, Bank of America and Citigroup, according to Mortgage Daily.
Considered by many to be a visionary leader, Mr. Gilbert often strikes a pugnacious stance. When Mr. James, the N.B.A. star, announced he was leaving the Cleveland Cavaliers in 2010 to join the Miami Heat, Mr. Gilbert — who not only has a majority stake in the Cavaliers, but also operates Quicken Loans Arena, where they play — penned a public tirade against the “cowardly betrayal,” in a letter written in the typeface Comic Sans.
Mr. James is again playing for the Cavaliers. A call to his agent seeking comment was not returned.
The year before, Mr. Gilbert got into an altercation at a bar mitzvah, punching a former colleague, David Hall, in the head before he was escorted out by security, according to interviews conducted by the Birmingham Police Department in Michigan. In police documents, Mr. Gilbert’s lawyer said Mr. Hall filed the complaint in order to pressure Mr. Gilbert into paying $2 million to buy out Mr. Hall’s investments in Mr. Gilbert’s companies. The Birmingham city attorney ultimately denied a warrant in the case on the grounds that the charges were not “supported by probable cause.”
Mr. Hall did not return an email seeking comment. In an email statement, a Quicken Loans spokesman said Mr. Gilbert “defended himself in a minor confrontation that was instigated by a former employee who was the aggressor.”
On a more trifling scale, after sending text messages about this article to a reporter at The New York Times but not receiving a response — Mr. Gilbert was texting her landline number by accident — he followed up with an email accusing the reporter of disconnecting her mobile phone to avoid him. The phone “likely is one of your temporary numbers that you deploy for the surreptitious work that you do,” he wrote.
When alerted to the misunderstanding, Mr. Gilbert apologized “for any of it that was caused on my end.”
When Mr. Gilbert was asked in an email if he “often strikes a ‘combative stance’ or ‘frequently attacks his critics,’” a Quicken Loans spokesman responded in an email, “It’s interesting that when someone with as long and successful career as Mr. Gilbert is forced to defend his integrity and honor from old and/or insignificant already rehashed incidents and accusations from a media source as credible as The NY Times, you would imply that doing such is ‘frequently attacking’ his critics.”
These days, Mr. Gilbert appears to be itching for a fight with the Justice Department. In court filings, Quicken argued that the three-year government investigation was based on 55 “cherry-picked” loans out of nearly 250,000.
Quicken also argued that a longstanding F.H.A. process to resolve loans that did not meet its requirements, through either the repurchase of the loan or by indemnifying F.H.A. from any losses, was retroactively discontinued for Quicken.
Since 2011, Mr. Gilbert has spent more than $2.2 billion on downtown Detroit, buying up 95 decrepit properties and rehabilitating them in an effort to lure new tenants. Nike opened a store there last year. The New York burger chain Shake Shack is coming in 2017, as is the sports retailer Under Armour. Mr. Gilbert also notes that he has leased space downtown to several local minority-owned start-up businesses.
That sort of presence makes downtown Detroit today seem a bit like a company town, a sort of Quickenville. That’s because Quicken Loans is just one of more than 100 closely knit companies that is owned or controlled by Mr. Gilbert with a footprint in the area. Through his commercial real estate properties, Mr. Gilbert can decide which tenants fit into his vision for downtown Detroit, and which don’t.
Rocket Fiber, an idea developed by three former Quicken Loans technology employees and financially backed by Mr. Gilbert, has brought high-speed internet to downtown Detroit. For a $15 million donation, Quicken received the naming rights for the QLine, a streetcar that is expected to start running through downtown Detroit this spring. Mr. Gilbert sits on the board of the streetcar project.
Lines of bicycles in downtown Detroit are available free for all employees of Mr. Gilbert’s companies. And visitors can bet at the tables at Jack Detroit Casino-Hotel Greektown, a gambling venture controlled by Mr. Gilbert.
The Quicken Loans family also includes one of the largest title companies in the United States, an appraisal firm, a call center and In-House Realty, which says on its website that it is the “preferred real estate partner” of Quicken Loans.
Mr. Gilbert, who was busted in college for running a football betting ring (the charges were dismissed and his record was expunged), plays on a big stage. Back in 2010, he guaranteed that the Cavaliers would win the N.B.A. championship before LeBron James would. They didn’t, but the team, led by Mr. James, did win the title last year, and this season’s team has the highest payroll in the league.
With Quicken Loans, Mr. Gilbert has built a game-changing company in the once-staid mortgage-lending industry.
Former executives describe Quicken Loans as a technology company that sells mortgages. But the heart that keeps Quicken’s blood moving is the 3,500 mortgage bankers who work its phones. Many new employees come in with little to no background in financial services. One employee joined after delivering pizzas to the Quicken Loans office and becoming interested in working there.
Entry-level employees typically make hundreds of calls a day, trying to get potential customers on the phone. Not unlike the assembly lines that put together cars in Detroit, the call is immediately handed off to a licensed mortgage banker, who completes the loan application, then quickly passes it to processing so that he or she can focus on the next loan application.
Mr. Gilbert said clients are able to close more quickly on loans when specialists focus on each stage of the loan process. He and other Quicken executives note that the company has repeatedly made Fortune magazine’s list of Best Places to Work For and has earned top marks in J. D. Power client satisfaction surveys.
Quicken defines its culture and philosophy through a number of so-called “isms,” created and curated over the years by Mr. Gilbert: “Yes before no.” “A penny saved is a penny.” “We eat our own dog food.”
At the same time, several former employees and executives in interviews described a demanding work environment, with staff members expected to work long hours and weekends to hit targets. In recent years, Quicken and its affiliated companies have faced at least four lawsuits filed by former mortgage bankers seeking overtime.
Quicken won one of the overtime cases, but court documents indicate others were directed into settlement negotiations. An email to the various plaintiffs’ lawyers was not returned.
And in early 2016, a National Labor Relations Board judge ruled that Quicken and five of its related companies issued an employee handbook with rules that violated workers’ right to engage in various activities, including union-related ones. Quicken has appealed the ruling, calling the policies “common, rational and sensible.”
When asked about criticisms of the work environment, Mr. Gilbert and other executives defended the company, noting that mortgage bankers work an average of 44 hours per week and are compensated well. It is possible for team members, Mr. Gilbert said, to earn over $85,000 in their second year, more than double the median household income for Wayne County, Mich.
Quicken Loans’ growing role in parts of the mortgage market may make it a lightning rod for critics.
Proponents say that nonbanks like Quicken or PennyMac in California — which was started by former executives of Countrywide, the mortgage machine in Southern California that was a hotbed of toxic mortgages in the 2008 crisis — are filling an important void. They argue that they serve people with low to moderate incomes or lower credit scores whom the big banks shun. The big banks, they say, focus instead on so-called jumbo mortgages, or mortgages of more than $424,100, the maximum amount that can be backed by government-sponsored enterprises like Fannie Mae and Freddie Mac.
“The large banks want to go after the higher-end business,” said Guy D. Cecala, the chief executive and publisher of Inside Mortgage Finance.
Thanks to low interest rates, home sales are booming and the mortgage market was expected to top $2 trillion in originations in 2016. That’s a far cry from the frothy height of $3.8 trillion that was hit in 2003.
Moreover, many other parts of the mortgage machine that were in place leading up to the financial crisis have been dismantled.
Still, critics say today’s shadow banks, by focusing on the riskier end of the mortgage market, may be revving up the same parts of the engine that resulted in defaults and foreclosures in the past. Nonbanks, which are typically less capitalized and may have more difficulty reimbursing the government for bad loans, now dominate F.H.A.-insured mortgage loans, according to data from the American Enterprise Institute’s International Center on Housing Risk.
In September 2012, banks originated 65 percent of the purchase-mortgage loans insured by the F.H.A., according to the data. Today, that number has more than flipped: Nonbanks originate 73 percent of the loans, with banks’ share dropping to 18 percent.
The figures are more spectacular for refinanced mortgages, where nonbanks now make up 93 percent of loans.
“The market has moved to the nonbanks because the nonbanks’ appetite for risk is much higher,” said Edward J. Pinto, a director of the Center on Housing Risk. He has argued that the F.H.A. is not only failing to help low-income communities with its programs, but is actually weakening them with imprudent loans.
Mr. Gilbert disputed any “false narrative” that claims Quicken faces less regulatory scrutiny, is lightly capitalized or makes risky loans. He said that the average credit score of a Quicken borrower is one of the highest in the nation; that the parent company’s assets “are larger than that of 93 percent of all F.D.I.C.-insured depositories”; and that the company is regulated by 50 states, multiple municipalities and numerous federal agencies. Quicken Loans is privately held, and it is unclear what its assets are worth.
In an email response to follow-up questions, Mr. Gilbert added, “Quicken Loans underwriting and production is one of the highest, if not the highest, quality production in the entire country.”
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