Terry Bishop

AARP has named Tucson the number one place to live for the "active adult" community, alias the "mature adult" community. Looking to a simple life, Tucson garnered top kudos over all other places in the nation.

And indeed, Tucson is a grand place to live. I willingly traded months of grey, drizzly weather...and shoveling snow for a couple of months of "dry heat". Early mornings are perfect for a meandering walk and after dusk lends itself to upbeat outdoor concerts.

Tucson has integrated culture which makes it a vibrant community, blending it's history as a part of Sonora Mexico prior to the Gadsden Purchase, with that of Native American culture, and Chinese culture. The white man found Tucson with the advent of the railroads and brought with them new ideas of architecture, lumber, and eastern accountrements.

Tucson is rimmed with mountain ranges; the Catalinas to the north-northeast, home of the nation's southermost ski area; the Rincons to the east; the Santa Ritas to the south, and the newest mountain range, the Tucson Mountains, to the west. The topography is different in all the areas, but all provide interesting and diverse hiking paths and birding areas, one of the criteria of the AARP study.

Combine that with exceptional cultural activities, it's own Symphony, a myriad of live theaters, the Center for Creative Photography which houses the Ansel Adams collection, the Tucson Museum of Art, DeGrazia Gallery in the Sun, and excellent small galleries, Tucson is making it's name in the art and music world. With one of the best Jazz Societies in the United States, a vibrant Blue Grass Society, Chamber Orchestras, Pops In the Park, citizens can toe tap to any rhythmn.

As someone enthusiastically once said to me, "the healthiest I've ever been is when I lived in Tucson". There are various sports activities, Senior Olympics, city owned tennis courts, golf courses galore, an assortment of classes offered by Parks and Rec, and classes in all types of activities ranging from Pilates to Weight Training to Salsa dancing at Pima Community College.

Combined with the bragging rights of 360 days of sun, Tucson offers its inhabitants low cost activities, the beauty of the desert, affordable housing in comfortable communities, local produce at Farmer's Markets, a plethora of volunteer activities, and excceptional medical facilities. (Scan previous blogs for information about the St. Philip's Farmer's Market, and a series about hospitals in the Tucson area.)

AARP really nailed it correctly! Tucson is the place to live!

Resources:

Tucson Convention and Visitors Bureau:

http://www.visittucson.org/

Tucson Chamber of Commerce:

http://www.tucsonchamber.org/

U.S. Representative Travis Chiders from Mississippi has sponsored with 37 co sponsors House Bill 3044 which calls for an 18 month moratorium on the Home Valuation Code of Conduct. The bill, sucinctly states:

SECTION 1. MORATORIUM ON THE HOME VALUATION CODE OF CONDUCT.

During the 18-month period beginning on the date of the enactment of this Act, the Home Valuation Code of Conduct announced by the Federal Housing Finance Agency on December 23, 2008, shall have no force or effect.

No one from Arizona has co sponsored the bill. The bill effectively puts a moratorium on Andrew Cuomo's call for Appraisal Management Companies (AMC) and allows time to develop rules and regulations governing the appraisal industry.

As well as lenders, Realtors, and Wall Street, the appraisal industry has also been cited as a cause of the economic melt down. It is alleged that appraisers were given a "target price" to meet by lenders which over valued the property and contributed to "loan fraud". Ironically, many of the large Appraisal Management Companies are subsidiaries or sister companies of the large banks which are currently underwriting Fannie Mae and Freddie Mac loans. These are the types of loans governed by the Home Valuation Code of Conduct.

Tom Heath, in his blog post Saturday, takes the Federal Housing Finance Agency to task and its Director, James Lockhart, for knowing little about the Home Valuation Code of Conduct. Heath is President elect of the Southern Arizona Mortgage Lenders Assocation and was guest blogger at this site last week. With his permission, I am reposting Heath's comments.

http://theheathteam.wordpress.com/2009/07/26/fhfa-is-out-of-touch-with-reality-and-hvcc-must-go-away/

Anyone concerned with real estate should take time to read this post and contact state representatives to support House Bill 3044 calling for the mortatorium on the Home Valuation Code of Conduct.

Resources:

http://www.govtrack.us/congress/billtext.xpd?bill=h111-30

http://www.govtrack.us/congress/bill.xpd?bill=h111-3044

This was posted on my blog this morning at: http://www.terrybishop.com/blog

Johnny Depp as John Dillinger and "Public Enemies" is a hot box office success. At the beginning of the year, the pols warned us of the vicissitudes of The Great Depression, revisited, the very event which made John Dillinger a darling amongst the populace So although times are not similar, the mindset is right for a great gansta' flick.

"The Jackrabbit" took the rap for many bankers who allegedly embezzled funds from their institutions and who almost welcomed the shoot 'em up, hold 'em up robberies since the stickups covered the tracks of the crooked bankers. Dillinger and his gang criss crossed the Illinois, Indiana, Wisconsin, Michigan and Ohio areas eluding law enforcement while "borrowing" fast cars, stealing ammunition, and stockpiling their dwindling supplies of cash with another job for loot.

Needing to cool off and lay low, the men headed south. Alan May and Marilyn Bardsley weave a great tale... http://www.trutv.com/library/crime/gangsters_outlaws/outlaws/dillinger/6.html and clicking on the link is well worth the effort! Let them tell the story.

But Dallas Scott, the Front Desk Clerk at the Hotel Congress and a Certified Tucson Tourism Ambassador, explains there was a fire in the basement of the Hotel Congress in January 1934, which licked up the elevator shaft and to the third floor. Dillinger had not arrived back in Tucson with Billie Frenchette, his all time love, but was due that afternoon.

Charles Makley and "Booby" Clark were guests at the Hotel Congress and had rooms on the third floor. The men bribed the firemen to go into the room to get two bags, according to Scott. One bag contained a number of weapons, and the other bag held $24,000. Dillinger and Billie Frenchette arrived that afternoon.

However, one of the firemen recognized either Makley or Clark and notified the Tucson's finest the following day. Tucson Police apprehended "The Jackrabbit" and his colleagues without a single shot being fired, something even J. Edgar Hoover's g men could not accomplish! According to Scott, Dillinger et al were apprehended on 2nd Avenue. The third floor of the hotel was never rebuilt because the German couple who owned the hotel did not have the money.

Each year on January 21, the Hotel Congress holds Dillinger Days where there is an embellished re-enactment of the capture of the American idol gangster, complete with vintage cars, food and music of the 1930's and where people dress as if they lived during that period.

The Hotel Congress has not changed much since that time, said Scott. It tries to keep the ambience of that era. Located at 311 East Congress in downtown Tucson, the hotel is home to The Cup Restaurant and a hopping lounge which is attractive to University of Arizona college students.

One thing the Hotel Congress is not, and that is the red brick building showing in the movie, "Public
Enemies" which brought a contemptuous laugh from the theater crowd.

Resources:

http://www.trutv.com/library/crime/gangsters_outlaws/outlaws/dillinger/6.html

John Dillinger and Tucson Arizona

http://en.wikipedia.org/wiki/John_Dillinger

Author of "John Dillinger" http://en.wikipedia.org/wiki/Dary_Matera

From the Federal Bureau of Investigation: http://www.fbi.gov/libref/historic/famcases/dillinger/dillinger.htm

The path taken by people trying to get out from under negative equity or mounting bills is littered once again with potential legal problems for Realtors, buyers, and sellers. The passage of the Arizona Senate Bill 1271 emphasizes the need for people to seek legal counsel when contemplating a foreclosure or short sale.

The Arizona Association of Realtors (AAR) requested that Governor Jan Brewer amend the call for a Special Session of the Lesligature to address the issues resulting from the passage of Senate Bill 1271, otherwise known as the Anti Deficiency legislation.

This bill states that within 90 days of the sale of property under a trust deed, "an action may be maintained to recover a deficiency judgment against any person directly, indirectly, or contingently liable on the contract for which the trust deed was given as security..."

This does not apply to any property 2 ½ acres or less used as a one family or single two family dwelling by the trustor for at least six months and for which has a certificate of occupancy was issued

The legislation continues that the deficiency judgment will be for an amount equal to the amount owned to the beneficiary as of the date of the sale, as determined by a court. This can be for the difference in the fair market value, less the amount of liens owed, and includes any interest which may be incurred.

The party seeking remediation must act within the 90 day period, and if no action is pursued, the proceeds of the sale are considered full payment of debt.

In the letter to Governor Brewer, Tom Farley, CEO and Cheif Lobbyist for the AAR, points out this bill applies people with second homes, rental property, and family owned property. Developers, Farley said, are not protected . The statute points to the "subtle difference" in the property "being utilized as a one or two family dwelling" which is how the existing statute reads, rather than the amended version which specifies "the focus is on the trustor themselves utililizging the property instead of the property being utilized".

Farley's letter came as a result of researching case law and the consequences of this amendment. He substantiates the letter with case law from various jurisdictions. Lenders receing Troubled Asset Relief Funds (TARP) are authorized to seek deficiency judgments against property owners after foreclosure. Deficiency judgments allow for the judgment creditor to garnish the wages of the judgment debtor, employ collection agencies, garnishment of non earnings such as bank depoits, take non-exempt property and sell it at a public auction to satisfy the debt, and place a judgment lien on real property owned or later acquired by the judgment debtor.

The legislation came as a result of lobbying from the Arizona Bankers Association. Arizona is one of the highest foreclosure/short sale states and Arizona bankers would like to recover some portion of the millions of dollars lost. The bill, as of this writing, is scheduled to go into effect September 30, 2009. Unless rewritten in the special session, the courts may be filled with lenders seeking deficiency judgments against former homeowners, which will create another series of problems including a rush to file for Bankruptcy on the part of judgment debtor.

Resources:

Text of SB 1271:

http://www.azleg.gov/legtext/49leg/1r/bills/sb1271s.pdf

Arizona Association Realtors:

http://aarnews.com/

http://aarnews.com/?s=SB+1271&x=26&y=9

Other Blogs about SB 1271:

http://en.wordpress.com/tag/sb-1271/

The Home Valuation Code of Conduct and how it impacts Tucson real estate is also a concern of Tom Health, Vice President of Advocacy for the Southern Arizona Mortgage Lenders Association, Legislative Chair for the Arizona Mortgage Lenders Assocation and Director of the Arizona Association of Mortgage Brokers. Tom is guest blogger today and what follows are his comments about the HVCC.

Thanks for taking the time to shed more light on the Home Valuation Code of Conduct (HVCC). You touched upon several issues that are critical in understanding why we have to recall this policy and put in place a more meaningful method of ensuring quality appraisals.

You mention this is a "de facto regulation," which is the perfect description. HVCC was not implemented by an agency as a regulation, or by Congress as legislation; it was an agreement between one man and two, at the time, privately held companies. The policy of HVCC circumvented standard public commenting periods and debate that would have been required if this were an actual regulation or law. The Attorney General of New York, Andrew Cuomo, threatened Fannie Mae and Freddie Mac with massive lawsuits if they did not comply with this code. The weak companies feared "tobacco type" lawsuits across the country and succumbed to the AG's demands.

The foundation for this agreement was an investigation launched by the AG into alleged appraisal fraud resulting in values that were unrealistic, but led to huge earnings for a large national lender and their partially owned subsidiary appraisal management company (AMC). Whether the attorney general had a foundation for his threats is not known, because as part of the agreement was to keep the results of the investigation undisclosed.

Due to the implementation of the HVCC, most lenders now work with an AMC, which is an unregulated entity and is often owned, in part or in totality, by the bank for which it performs appraisals. Ironically, Cuomo's code has led to the dominance of the very structure that prompted the investigation that led to the code.

What was intended to protect consumers from unscrupulous originators and appraisers has created a more expensive process for the borrower and created a lower quality and less reliable product. You accurately point out that the cost of a report has increased, but the compensation to an appraiser has decreased. Quality appraisers are unable to work for the reduced income and therefore, orders go to less experienced practitioners. Many times, the appraiser is brought in from areas outside of the market and is unfamiliar with trends and characteristics of the property being inspected.

While many are focusing on the inaccurate values being returned, the emphasis should be placed on the poor methodology of those reports rather than the value itself. Anecdotal evidence is pouring in that, appraisers are brought in from areas outside of the market and are unfamiliar with trends and characteristics of the property being inspected. Two reports were forwarded to me from a listing agent representing a property in a historic part of Tucson. The first report was well below the agreed upon sales price and used comps that were not representative of the property's historical characteristics. The sale fell through. Seller reduced price, a new buyer was found, a new lender was used, and a new appraisal was performed. This report used comps more akin to the property being inspected and value came in 10% above ORIGINAL sales price.

In addition to cost and quality, the code has presented a "portability" issue. Consumers typically pay for the appraisal at or prior to time of inspection. While the code allows the report to be transferred to another lender if the borrower so wishes and the appraisal is HVCC compliant, the reality is much different. One large national lender has a written policy that it will only accept reports completed by its wholly owned, subsidiary AMC. Any borrower wishing to switch to this lender would likely have to have to bear the cost of another appraisal. This same lender also stipulates that it will only release its reports to other lenders if the borrower is declined or counter offered on the terms of the loan they requested. In other words, if that lender wants the loan, they will not release the report even though the consumer has paid for it.

The only vocal supporter of HVCC is a professional group, Title/Appraiser Vendor Management Association (TAVMA), whose members are large AMC's. The Appraisal Institute has supported the HVCC mission of appraiser independence, but has asked for changes. Fannie Mae and Freddie Mac are noticeably silent on the code.

There is, however, loud opposition to the bill from the National Association of Realtors, the National Association of Home Builders, the National Association of Mortgage Brokers, and many independent appraisers.

The prevention of appraisal fraud and coercion has to be eliminated, but HVCC is a poorly planned and improper tool for the job. Congress has introduced HR 3044 that would place an 18-month moratorium on HVCC and allow regulators to create a workable solution that takes the good intentions of HVCC and melds them with practical procedures that can strengthen the industry and protect consumers.

Tom is with Consolidated Lenders, The Heath Team

http://www.theheathteam.com/

House Bill 3044:

http://www.govtrack.us/congress/billtext.xpd?bill=h111-3044