William A. Miller, Esq.

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.

In 1988, one of my first legal projects was to get a bank from Colorado off the back of a local developer who had built a shopping center. It turns out the bank was fearful that Arizona was about to enter a bad season in commercial real estate, the only problem was the developer was really not in default. The judge slammed the bank & by the time we cut a settlement deal with them, the market had really corrected. They should have waited and played fair. Declaring bogus defaults hurt them.

Now, the next shoe is about to drop because of commercial loan resets. Commercial landlords continue to lose office & retail tenants at an accelerating pace, indicating that the industry’s troubles are worsening.

The amount of occupied space in U.S. shopping centers and malls declined a net 8.7 million square feet in the first quarter of 2009, according to real-estate-research company Reis Inc. The amount of occupied space lost in that one quarter was more than the total amount of space retailers gave back to landlords in all of 2008 and any other year in recent history, according to Reis. It makes 1988 look like a cake walk. If you need help dealing with the ever changing real estate market give the Scottsdale law firm of William A. Miller a call at 602-319-6899.

As a real estate lawyer working in Paradise Valley and Scottsdale for over 20 years, I have seen scores of families ship-wrecked by money. ‘Around the world, inherited wealth is hard to preserve, says an article from Intelligent Life, a quarterly published by one of my favorite journals  The Economist:

Families that preserve their wealth over the generations are rare. The fact that the first generation makes it, the second husbands it and the third blows it is so widespread that it reflects reality. Some say, “clogs to clogs in three generations”—a northern English saying—has its equivalent in many other languages: Erwerben, Vererben, Verderben (earn it, bequeath it, burn it) in Germany; “from the stables to the stars and back in three generations” in Italy; and my favorite “from sandals to sandals in three generations” in China. 

I once had a Trust fund client show up to Court in a $2,500.00 double breasted Italian blazer with white pressed Armani pants and I am not kidding- sandals. I could hear his grandfather roll over in his grave. 

We have significant real world experience at the real estate and commercial law at the Firm of William A. Miller in Scottsdale, Arizona. We also have been helping families set up Estate plans to minimize the above sandals problem for the last 15 years. Give us a call at 480-948-3095 to see if we can help. If nothing else, make your kids work. That will solve 95% of the sandal problem.

I just sent in my annual money for registration of a vintage car I own to the great State of California. I drive it too much, yet I cannot bear to drop the California plates. The car is classic, just like my memories of California. It is where I was born, but I was raised in Arizona. Back then in the 60’s and 70’s, we did things right in Arizona. Self made men. No excuses for failure. No social climbing needed. You fight, you win. You quit, you lose. That is it! “Buckle down kid”, that is what my dad said. Yet, California went French on me over the last few years.

California is now in a French-like bind: unable to afford a welfare-type state, and unable to overhaul it. “The people say they want all these programs, then there’s nothing they want to pay for,” says Hector De La Torre, a Democratic assemblyman. “The schizophrenia in the legislature reflects the peoples’.” Let us pray that Arizona stays true to Goldwater type freedom and self reliance.

We do not take wimpy cases at the law firm of William A. Miller in Scottsdale. No coffee burn scams. No the-teacher-was-mean-to-my-kid nonsense. But, if you really have been injured by a real estate or stock scam, give us a call at 480-948-3095. We will strive to make things right the old fashion way. The Arizona way.

No one wants to even think about the F-word — “Foreclosure.” It is so sad to see so many good folks losing their homes in foreclosure. It is also good to see some banks playing “fair” and trying to work with defaulted borrowers. Yet note something curious in Arizona law. Normally after a default and foreclosure, all the bank can do is get your house and sell it in the open market. If it does not fetch a higher price than the loan, it is not your problem, other than botched credit. They cannot sue you for the difference (deficiency).

Arizona’s laws that prohibit deficiencies are found in Arizona Revised Statutes Sections 33-814.G and 33-729(A).  These types of laws are also called “anti-deficiency legislation.”

A.R.S. § 33-729(A) states: “. . . if a mortgage is given to secure the payment of the balance of the purchase price, or to secure a loan to pay all or part of the purchase price, of a parcel of real property of two and one-half acres or less which is limited to and utilized for either a single one-family or single two-family dwelling, the lien of judgment in an action to foreclose such mortgage shall not extend to any other property of the judgment debtor, nor may general execution be issued against the judgment debtor to enforce such judgment, and if the proceeds of the mortgaged real property sold under special execution are insufficient to satisfy the judgment, the judgment may not otherwise be satisfied out of other property of the judgment debtor, notwithstanding any agreement to the contrary.

A.R.S. § 33-814(G) states: “If trust property of two and one-half acres or less which is limited to and utilized for either a single one-family or a single two-family dwelling is sold pursuant to the trustee’s power of sale, no action may be maintained to recover any difference between the amount obtained by sale and the amount of the indebtedness and any interest, costs and expenses.”

At the law firm of William A. Miller in Scottsdale, Arizona, we can help you sort through these laws to give you as much protection as possible. So give us a call at 480.948.3095 if you want to have us look over your case. LAW is not a four letter word.

At the Law Firm of William A. Miller in Phoenix we manage a number of high-profile estates. On Jan. 1, the amount exempted from federal estate taxes rose to $3.5 million from $2 million, which means that estates at or above the new limit would save $675,000 in estate taxes (at the 45% rate) compared to last year. So, party on, trust fund preps, heirs and heiresses. But wait, this may all end sooner than expected.

Under the current law, the estate tax is scheduled to disappear altogether in 2010, so the heirs of millionaires who go to their reward next year stood to inherit everything without Uncle Sam taking a cut on any of it.

While that is how the law stands, the notion of uber-rich being able to pass on their millions tax-free never squared with common sense reality. Of course, there are good arguments against the so-called death tax, especially that it taxed income twice; first when it originally was earned, then when it was saved and invested over time.

We are more than happy to help you properly plan your Estate at the law Firm of William A. Miller. Give us a call at 480.948.3095.

OK, it’s now 2009 and we are all looking for a fresh start. We settled three significant matters at the law firm of William A. Miller in Phoenix, Arizona, over the last 30 days. I like to say, “I am a patriot first and a conservative second” and this quote from Cicero in 55 BC is as timeless as the saying of the Bible.

“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”

Sounds like there is nothing new under the sun. Good Luck to our President-Elect in 2009.

An affinity fraud is one in which a member of a religious or ethnic group, works over members of that same group. It can be a church or high school booster club. At the Scottsdale, Arizona based real estate and litigation law firm of William A. Miller we have seen this happen over and over again. In the Madoff fraud, it was the Jewish community. Investigators dug through financial records at Bernard Madoff’s investment firm as the list of victims of his alleged Ponzi scheme widened to include real-estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, Sen. Frank Lautenberg and a charity of movie director Steven Spielberg. Talk about the powerful.

The Madoff scandal reverberated around the world, with banks including Spain’s Grupo Santander and France’s BNP Paribas saying on Sunday that their clients and shareholders together face billions of euros of losses. At the Miller law firm in Phoenix, Arizona we often tell even well heeled clients to remember what your dad told you, ‘if it sounds too good to be true, then it probably is.’

A judge denied bail on Thursday for a New York lawyer accused of selling sham investments to hedge funds. Hmmm… a shyster lawyer selling worthless real estate to a ‘hedge fund’. Can you say ironic? Things like this happen in Phoenix too and since the Charlie Keating days we have been involved in fighting a number of these con men in the Maricopa County Courts.

The case against Marc Dreier, founder at the 250-attorney law firm Dreier LLP in New York, has stunned the city. The Harvard Law School graduate is a 30-year veteran lawyer, whose firm has specialties in bankruptcy, litigation and employment law. They handled a case or two in Federal Court in Phoenix over the years.

Assistant U.S. Attorney Streeter said in court the actual monetary losses in the case may now exceed $380 million.

He said the fraud has likely been going on since January 2006. Dreier was ordered to remain in custody. He was arrested on Sunday for what authorities called a “stunning” and “brazen” scam.

Streeter said Dreier had been fooling some of the world’s most sophisticated investors. He is accused of scheming to market fake debt from a New York-based real estate developer to hedge funds and other institutional investors. Prosecutors say he cajoled his way into real estate and pension fund offices and created fake documents to try to convince investors that the worthless debt securities he touted were real. So, the next time you see a well dressed outsider ‘using’ your conference room, watch out, he may be claiming to be your company CEO, while he is actually signing away the deed to your building with some bogus financing instrument.

At the Law Firm of William A. Miller located in Phoenix, Arizona we specialize in these type of cases. Feel free to call at 602-319-6899 if someone has ripped you off in the greater Phoenix area in a real estate scam or hoax.

The meltdown of title-insurance company LandAmerica Financial Group Inc. has left scores of real-estate investors and entrepreneurs scrambling to recover money in what were supposed to be a short-term and no-risk arrangement. The investors, from Arizona retirees to a public company, had $400 million on deposit with the LandAmerica subsidiary to take advantage of a real-estate strategy known as a 1031 exchange. A 1031 exchange, named for a section of the U.S. tax code, lets investors delay capital-gains taxes on the proceeds from recently sold property, as long as the investor lets a third party hold the funds. They must reinvest the money in a new property within six months.

At the law firm of William A. Miller in Phoenix, we often tell client’s to go ahead and pay taxes now because the tax rates are historically low and buying again, may well not be wise. Yet, here is a reputable title-insurance company holding 1031 money until such time as the investor decides to reinvest it and poof, it’s gone.

If a lawyer does this in Arizona he loses his license and likely goes to jail. Why; because in Arizona lawyers cannot co-mingle funds. This is a historic wrong and once again, blood will flow in the streets and the lawyers will make a small fortune. What a mess. Someone needs to serve time based on these poor folks losing their hard earned money.