WITH THE CURRENT REAL ESTATE AND CAPITAL MARKET
MELTDOWNS, NOW MORE THAN EVER CLIENTS NEED AND WANT
LAWYERS WHO ARE FOCUSED ON THEIR CASE.
Mortgage Forgiveness & Taxes
When your lender reduces and “forgives” debt, it used to send a Form 1099 for the amount of reduced or forgiven debt. This amount needed to be included as income on your tax return. It is often called phantom income. But, because of new law, there’s a big exception when it comes to mortgage debt secured by your primary residence.
The Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude from your income the debt that’s left over after a foreclosure. The law applies for the calendar years 2007 through 2012.
You can find more information about the act in IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, as well as in IRS news release IR-2008-17.
Call long-time Scottsdale, Arizona attorney William A. Miller for more information at 602.319.6899
Those who Teach…
The bible says those who teach are held to a higher standard & federal prosecutors acknowledged that they made some “honest mistakes” in a high-profile Foreign Corrupt Practices Act case, but disputed in a brief
filed on Sept. 5 that those oversights rose to the level of misconduct.
The government’s filing addressed concerns voiced by U.S. District Judge
Howard Matz in Los Angeles that the government’s “astonishing” and
“troublesome” mishandling of the case might warrant dismissing the indictment
against two former executives of Lindsey Manufacturing Co. who were convicted on
FCPA charges. Defense lawyers moved to dismiss the charges based on prosecutorial
misconduct one day before a May 10 jury verdict went against their clients.
I think the Judge need grant this Motion. If our prosecutors get by with this behavior then what is next? After all those who teach…
Arizona Trial & Business Law
William A. Miller, Esq.
William A. Miller, PLLC
8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258
What is Right is Right
A new group has made even Karl Marx do ‘back flips’ in his state owned grave. Politicians get asked all the time to sign pledges — about war, abortion, taxes and countless other issues. Now, a coalition of far left legal groups is asking people to sign a new pledge “to support the whole Constitution.”
These groups have dishonored the document for years-and-years by appointing those Judges who ‘legislate from the bench’ and think the Constitution… lives and changes… which is code language for’ we are smarter than the Founding Fathers.’
These groups need to read the Federalist Papers.
Only one who believes in original intent is worthy of an appointment to the bench, otherwise you are saying that our culture i.e. South Park, Kardasians and Jersey Shore, should be our social benchmarks.
Arizona Trial & Business Law
William A. Miller, Esq.
William A. Miller, PLLC
8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258
New Law Regarding Arizona Foreclosure
Under Arizona Senate Bill 1259, we may become the first state to require
lenders to prove they have the legal right to foreclose by proving up a list of
all owners of the deed of trust, under a bill passed yesterday by our Senate.
The law, which is headed to the House after being approved 28-2 in the
Republican-dominated Senate, would allow foreclosure sales to be voided if
lenders that didn’t originate the loan can’t produce the full chain of title. This
is in line with our statutes, which permit nonjudicial foreclosures, meaning property
can be forfeited with a court order.
Lawmakers in states including New York, Oregon and Virginia
also have proposed legislation to address concerns among consumer
advocates that lenders or mortgage servicers are using incomplete or false
paperwork to repossess properties in default. The attorneys general of all 50
states are jointly investigating how the mortgage-servicing industry operates.
The stakes are high and this is the least the banks can do before they
re-take a home or commercial property. Call Bill Miller at 602-319-6899 with
questions about your legal rights. He has been an Arizona trial lawyer for over 24 years and has successfully defended many wrongful foreclosure proceedings.
Arizona Trial & Business Law
William A. Miller, Esq.
William A. Miller, PLLC
8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258
Say it. Don’t Spray it!
When I was a kid, Mr. Winn, my 5th grade teacher would say… “Say it. Don’t spray it!” We all knew what he meant. I just put up about 25 pleadings from the Mortgages Limited fiasco. The Sierra club will go nuts on how many trees we will kill in this case. Note, the lawyers on both sides write pretty good. The Defendants have 38 lawyers. No doubt another 20 will join. The Plaintiff’s have 1.
We are all trying to make a complex matter understandable. At the Scottsdale law firm of William A. Miller we try hard to write clear. Some lawyers pull this off. Others do not.
Arizona Trial & Business Law
William A. Miller, Esq.
William A. Miller, PLLC
8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258
A long winded brief filed in the Supreme Court lost its audience in the the very first sentence of the brief:
The issue presented in this case — which arises under the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7101, et seq. (”Federal Labor Statute”) — is whether the most basic policies of that Act should play any role in a major area of its administration, viz., in determining whether a union acting as the exclusive collective bargaining representative of federal sector employees — having been selected by those employees through the secret ballot electoral processes provided by federal law — is entitled to the disclosure of personnel records of bargaining unit employees when such disclosure is “necessary for the full and proper” performance of that representative’s collective bargaining functions.
The writer of that sentence asked way too much. Must be they are paid by the word. By contrast, this lawyer got it right:
There is an old riddle: Which weighs more, a ton of feathers or a ton of bricks? While many find the question deceptive at first, the correct answer, that a ton is a ton regardless of what is being weighed, becomes irrefutably clear once explained. But in enacting and now defending the NR Exemption, the State has managed to get the answer wrong — a ton of soybeans or chicken feed is treated as though it weighs less than a ton of baked beans or dog food.
The reader is sure to understand the point.
If you need help with any legal matters feel free to call Scottsdale, Arizona trial lawyer Bill Miller at 602-319-6899. We take cases involving:
Breach of contract, Non-compete agreements, Non-disclosure agreements, Employee theft and embezzlement, Insurance purchases and enforcement of policy coverage, Negotiation and/or enforcement of commercial leases, Negligence and gross negligence resulting in losses, Intentional acts causing a company to suffer damages, Tortious interference with contractual relationships, Unjust enrichment, Real Estate fraud, Consumer fraud, Conversion/Theft, Intentional and/or negligent misrepresentation, Business torts and Real estate title & escrow.
William A. Miller, PLLC, is an Arizona law firm dedicated to this simple philosophy: In every case we handle, we strive to be the best! To demand of ourselves the highest standard of diligence and follow through. To turn over every stone. To return client calls immediately and not hide behind “lawyer speak” when confronted with tough issues. Our mandate is to treat our clients with the highest level of respect, integrity and empathy – to “do unto others as you would have them do unto you.”
Street Smarts
My dad, a University professor, taught me how to be street smart. I think he knew the futility of arrogance and he wanted me to not think too highly of myself.
Little typifies street smarts better than an experience I often have.
My favorite pizza joint in Phoenix is the Red Devil. It has been in the same location for 60 years. Do not ask for pesto or goat cheese or you will get booted. It is next door to a biker bar and a strip club is right across the street. It’s amazing how many kids ride their bikes on that busy street. They always coast behind me when I am sitting at the stop sign. They instinctively do not trust me to yield for them. They are street smart.
On the other side of town, in Scottsdale, is my second favorite pizza place. It’s new, organic, has roasted vegetables and no pepperoni. It serves $9 dollar beers. No kids are ever riding their bikes around there, but there is no shortage of guys my age in tight shorts and helmets riding around on $2,000.00 dollar bikes. When sitting at that stop sign, I always get an arrogant glance and a quick dart right in front of my car by the old guy biker-types. That is arrogance.
Your lawyer should be street smart. Your lawyer must have confidence, but not be arrogant. Call Bill Miller, a 23 year business litigation attorney in Scottsdale and Phoenix at 602-319-6899 to see about your legal rights.
William A. Miller, PLLC, is an Arizona law firm dedicated to this simple philosophy: In every case we handle, we strive to be the best! To demand of ourselves the highest standard of diligence and follow through. To turn over every stone. To return client calls immediately and not hide behind “lawyer speak” when confronted with tough issues. Our mandate is to treat our clients with the highest level of respect, integrity and empathy – to “do unto others as you would have them do unto you.”
Arizona Trial & Business Law
William A. Miller, Esq.
William A. Miller, PLLC
8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258
Who’s on First
Mortgages bundled into securities were a favorite trick of Wall Street at the height of the big bubble. The securities changed hands frequently, the French bought billions, and the investment banks profiting from mortgage payments were often not the same parties that made the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing mortgage pools to transfer without the necessity of recording. The point was investment banker fees without responsibility or accountability to the home owner!
MERS was made for the banks, but courts are now slamming down the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. As MERS has acknowledged that MERS is a “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.
The latest decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERSbecause it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:
Since no evidence of MERS’ ownership of the underlying note has been offered, and
other courts have concluded that MERS does not own the underlying notes, this
court is convinced that MERS had no interest it could transfer to Citibank.
Since MERS did not own the underlying note, it could not transfer the
beneficial interest of the Deed of Trust to another. Any attempt to transfer
the beneficial interest of a trust deed without ownership of the underlying
note is void under California law.
While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue. Call Bill Miller at 480-948-3095 a long standing Arizona Trial and Real Estate Lawyer located in Scottsdale.
Arizona Trial & Business Law
William A. Miller, Esq.
William A. Miller, PLLC
8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258
To the Left to the Left
For a long time conservative like me, this is a tough issue to blog on. I lean left on the Gulf oil spill mess. So, call me a flaming liberal; no pun intended.
For over a month or two, Obama watched the oil spill spread over the Gulf of Mexico with the same powerless shock as other Americans. Regarding this, the right wing pundits got a big time pay back for Bush slander on Katrina. Yep, Bush should have stopped the hurricane & Obama could plug the leak.
Lampooned by his contingency & ‘my people’ for his impotence, Obama was spurred into action. He attacked the only available party—BP—and, to underline the stress with which he takes this problem, he gave his first Oval Office address on the subject. Lawsuits! That is what the professional/motivational speaker/professor said. Where is “mission-accomplished-bush” when you need him!
Obama’s address got poor reviews; his attack on BP better ones. Last week the firm bowed to pressure, and announced that it was, in effect, handing over $20 billion to the government to pay for compensation and clean-up, as well as cancelling the payment of any dividends this year and setting up a fund—of a mere $100m—to compensate unemployed oil workers.
This may do Obama some good. Whether it will benefit our friends in the Gulf is more doubtful. Businessmen are already blue, shot-down by the economy and nervous of their president’s attitude towards free markets.
I lean very left on this one. Where are those ‘onerous-left-wing-regulations” when you need them? Anyone who says the ‘free market’ can solve this mess needs history lessons.
Go get ‘em Obama! Sue everyone later, but fix the problem first.
May God richly bless our friends in the Gulf as this drags on.
Make sure to call Bill Miller @ 480-948-3095, a 22 year Arizona litigation and trial lawyer with any questions about Arizona law or Maricopa County courts.
Arizona Trial & Business Law
William A. Miller, Esq.
William A. Miller, PLLC
8170 North 86th Place, Suite 208
Scottsdale, Arizona 85258
Following on the heels of the federal class-action lawsuit filed against two national law firms and national accounting firms last week in Phoenix, Greenberg Traurig and Mayer Hoffman McCann and its affiliates find themselves on the wrong end of another investor lawsuit to recover some $52.3 million that the investors claim the lawyers and auditors helped Mortgages Ltd (MLtd) and its wholly-owned subsidiary Mortgages Ltd. Securities (MLS) defraud investors to the tune of $900-plus million between 2004 and 2008.
The latest lawsuit was filed on June 1st in Maricopa County Superior Court in Phoenix by Scottsdale attorney William A. Miller on behalf of the Plaintiff, Victims Recovery, LLC (VR), a group that represents 18 high net-worth investors who, according to the complaint, as the result of the defendants’ misrepresentations, bought into Mortgages Ltd.’s promise of high-interest income and relatively quick payback of principal from its “secured” investments.
In addition to Greenberg Traurig and Mayer Hoffman, the complaint names as defendants Mayer Hoffman affiliates, CBIZ, Inc., and CBIZ-MHM, LLC, as well as two Greenberg attorneys, Robert Kant and Jeffrey Verbin, two Mayer Hoffman accountants and auditors, Charles McLane and Joel Kramer, and three former MLtd executives, former president Michael Denning, former CFO Christopher Olson and former vice president Jeffrey Newman, who was also the former president of MLS, which was used to sell MLtd’s investments to investors.
Kant, Verbin and Greenberg Traurig were MLtd’s and MLS’s attorneys from 2006, while McLane, Kramer and Mayer Hoffman reviewed and audited the company’s 2004-08 financial statements, which Olson prepared. According to the complaint, these defendants participated in or facilitated MLtd’s fraud by preparing false offering memoranda, other legal documents and independent auditors’ reports, which misled investors by misstating the real risks of MLtd’s loan programs, and the fact that MLS was selling securities illegally and that MLtd was actually insolvent but for creative accounting and undisclosed borrowing from related and third parties.
In the complaint VR says, “the Company’s lawyers, accountants and auditors made sure that “MLtd would fall [like Humpty Dumpty], leaving investors ‘holding the bag’ of worthless paper.” After detailing how all of that happened, VR alleges claims of fraud, negligence, aiding and abetting breaches of contract, bad faith and fiduciary duty, and civil conspiracy against Greenberg Traurig, Mayer Hoffman and the other defendants.
By way of background, MLtd was founded in 1963 and licensed as an Arizona mortgage banker. It operated as a private real estate mortgage lender in Arizona until 2008 when Scott Coles took over the company as CEO from his father who founded the company. Coles moved the company’s business from making traditional residential mortgage loans to making short-term multi-million dollar bridge loans to commercial real estate developers and builders for projects in Arizona such as multifamily residential complexes, office buildings and undeveloped mixed-use properties.
MLtd packaged these loans into “programs” and sold investments in the programs as unregistered securities through its MLS subsidiary to investors, such as those represented by VR, to raise the money it used to make the loans. According to VR’s complaint, MLtd made its money by collecting “a virtual airline-like laundry list” of fees from both its borrowers and its investors in addition to receiving the “interest spread,” the difference between the interest received from borrowers and the interest it paid to investors, on the loans.
One of MLtd’s loan investment programs, its “Revolving Opportunity” (RevOp) program, was different from its other programs in that it was geared towards high net-worth investors, like the VR investors, and required higher minimum investment amounts (initially $500,000.00 and later increased to $1 million). According to VR’s complaint, RevOp, the program that the VR investors lost their money in, was touted as offering investors preferred positions, higher rates of return, better security, and more liquidity than the company’s other loan programs.
VR’s complaint goes on to say that MLtd increasingly originated significantly larger but fewer loans, many of which had delayed-funding terms that obligated the company to fund substantial portions of the loans in stages rather than the entire amounts upfront. This magnified the adverse effects of the deteriorating real estate market conditions in Arizona in late 2006 and throughout 2007, all of which began to severely impact MLtd’s cash flow.
For example, as VR’s complaint states, in late 2006 through late 2007, MLtd made commitments to developers to loan them more than $670 million for a multitude of projects without the resources to fund those loans. Moreover, many of MLtd’s borrowers began defaulting on their large multi-million dollar loans and by January 2008, developers had defaulted on more than $100 million in loans.
According to the complaint, that coupled with the impact of having to meet delayed-funding obligations resulted in the company’s not having the money or ability to raise more money to pay the VR Investors their monthly interest or to honor their investment-redemption requests as required under RevOp. The complaint continues that with the assistance of the defendants, “[a]s a result of being so grossly overextended, MLtd and MLS pursued various Ponzi schemes of selling even more loan programs to existing and new investors, including the VR Investors, to raise the money … needed to pay the interest due investors on earlier investments and to keep the company afloat.”
As a result, the complaint alleges, “MLtd’s house of cards came crashing down” when Coles, who also ran MLS, committed suicide on June 2, 2008, and just three weeks later, MLtd was forced into bankruptcy by its creditors. Shortly after that the SEC and the Arizona Department of Financial Institutions (ADFI) began investigating the company’s business, and the SEC shut MLS down for violating federal securities laws and the ADFI yanked MLtd’s license based on its improper financial practices and accounting, which violated Arizona law.
The complaint explains that the VR RevOp investors first became aware of the fact that Greenberg Traurig and Mayer Hoffman may have been involved in MLtd’s fraud during MLtd’s bankruptcy proceedings. That then led these 18 investors to join together to set up VR to investigate the situation and that resulted in the lawsuit that VR filed on June 1st. A copy of VR’s complaint is available under the “Mortgages Ltd. Case” tab at the top of this website.
William A. Miller, PLLC, is an Arizona law firm dedicated to this simple philosophy: In every case we handle, we strive to be the best! To demand of ourselves the highest standard of diligence and follow through. To turn over every stone. To return client calls immediately and not hide behind “lawyer speak” when confronted with tough issues. Our mandate is to treat our clients with the highest level of respect, integrity and empathy – to “do unto others as you would have them do unto you.”
Be Careful of What you Ask for…
My dad always said be careful of what you ask for because you might just get it.
“Drill, baby,drill” was a siren song during the last election and some were all too quick to want more off-shore drilling. Well, look what happened … The big spill has been unfolding for more than two weeks, pouring at least 5,000 barrels of oil a day into the Gulf of Mexico, and probably a lot more than that. It began on April 20th with a fire and an explosion on an exploratory rig 40 miles from the Louisiana coast. Eleven workers were lost (RIP), and several days later it became apparent that the well underneath had begun to leak. By April 26th the slick was 80 miles across, with the western part 36 miles from reaching the coast.
An array of Federal agencies are on the scene, skimming up oily water, installing thousands of feet of boom in an attempt to contain the oil, and burning off some of the slick. BP, which was leasing the rig, will spend at least $500 million on the clean-up. Much depends on the wind, which could push the oil out towards the open sea—or in the other direction. If the oil does reach Louisiana, the costs will be grave. The lawsuits will fly. The coastal marshes are home to abundant and various animal life, as well as to fishing and tourism industries.
The lawyers will be the only winners. Sad, Sad, Sad. Be careful of what you ask for … We may not be able to stop such environmental nightmares, but if you need legal representation for business or real estate disputes in the Phoenix, Arizona, area, call Bill Miller at 480.948.3095.