Commercial Real Estate Appraiser - Appraisal Blog, APPRAISAL/CONSULTING SERVICES: 310.337.1973

Published on Tuesday, June 9, 2009 10:17 PM PDT

“Congress and President Obama have shown real leadership here. Tenants are innocent victims of the foreclosure crisis, and it is about time they get some relief,” noted Dean Preston, Executive Director of Tenants Together. “This bill will provide tenants 90-days notice of eviction, require banks to honor leases, and protect Section 8 tenants after foreclosure. We look forward to the day when banks stop evicting innocent tenants after foreclosure, but until that day comes, this federal legislation will provide much-needed time for tenants across the country to find new housing and relocate.  Senator John Kerry (D-MA), Representatives Keith Ellison (D-MN), Carolyn McCarthy (D-NY), Michael Capuano (D-MA), and Barney Frank (D-MA), deserve special praise for their efforts on this bill, as does the National Low Income Housing Coalition, a nonprofit organization that has been advocating for these tenant protections for over a year.”

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You can now get the entire May edition of the award-winning Site Selection online by simply using our new reader. By using the "Navigate" menu in the upper left-hand corner, resourceful readers can also:

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TRAINING SERIES ON UNDERWRITING COMMERCIAL FINANCE, PART 2

Charles Pixley
RAMA ENTERPRISES, Inc.
Real asset management associates
515 Madison Ave., 5W, New York, NY 10022
charlespixley@rocketmail.com
Skype: toanangel
585 217 2191


Volume 6 Issue 2
TRAINING SERIES ON UNDERWRITING
COMMERCIAL FINANCE, PART 2

THE COMPONENTS OF AN EXECUTIVE SUMMARY

William Shakespeare wrote: “Brevity is the soul of wit.” If you want someone immersed in this industry to pay attention it most likely will not happen if you submit a series of files that take up allot of disc space and would take hours to read and still not convey the basics of the project.

To spare everyone’s time, get you the fastest answer and have the greatest chance of garnering interest, the most effective means of getting your loan or finance request read understood, and approved by an underwriter for in depth review is the Executive Summary. The following is a sample; obviously you have to tailor the summary to the subject type:

TYPE OF FINANCE REQUESTED
1. Date:
2. BORROWER’S NAME whether personal Corporate or LLC:
3. SUBJECT ADDRESS:
4. PURPOSE OF THE LOAN:
5. TYPE OF PROJECT, OR BUSINESS:
6. DESCRIPTION OF THE PROPERTY OR BUSINESS
7. PURCHASE PRICE:
8. DATE OF PURCHASE:
9. BORROWER CASH INVESTED TO DATE:
10. EQUITY IN DEAL:
11. BREAKDOWN OF ALL IN COSTS:
12. USE OF FUNDS:
13. AS IS VALUE:
14. QUICK SALE VALUE:
15. AS COMPLETE VALUE BASED ON INCOME:
16. ACUTAL OR PROJECTED GROSS INCOME:
17. NET OPERATIONG INCOME Projected or Actual:
18. CLIENT NET WORTH:
19. CLIENT FICO:
20. EXIT STRATEGY:
21. Brief summary of salient facts:

RATIO USED TO DETERMINE VALUE
BASICS OF DETERMINING THE DSCR

Using a copy of the most recent tax returns for the business, or the specific properties, if there are more than one property incomes reported. Take the Adjusted Gross Income. AGI, and add back: Depreciation, Amortization, Interest Expense and specific non-reoccurring charges used to improve, or maintain the business, or property, (new equipment, new roof, bathroom remodeling, etc.

THIS IS YOUR Net Operating Income, N.O.I.

Probably one of if not the most important valuation ratio is the Debt Service Coverage Ratio, DSCR.

To know if your client, or loan request has a chance of flying, if you know a property or business

NET OPERATING INCOME, N.O.I., an underwriter and you can determine value very accurately without referring to an appraisal.
Debt Service Coverage Ratio

In underwriting a business, or commercial property Cash flow analysis is referred to as the Debt Coverage Ratio and it means everything to an underwriter to determine value. For both owner occupied and investment properties, underwriters normally want to see ratio's above a ratio of a minimum of 1.20 to 1.

In other words, for every $1 of mortgage debt the property or business has to have $1.20 of net income to meet the mortgage payments. Obviously the greater the risk or shorter the seasoning or occupancy rate, or property types such as hotels or car washes will be required to have higher ration preferably a DSCR above 1.4.

As a quick method of qualifying a loan request, assume a Capitalization Rate, CAP RATE OF 10% and multiply the N.O.I. X 10 and you will have a general idea of the actual value. However, if you know the CAP RATE, for the area, is 7% you divide the N.O.I., by 0.07, and it will give you a very accurate idea of what the property will appraise for and whether the Loan To Value, LTV, requirements are within the guidelines to have a chance for approval.

A low DSCR, high vacancy rate, speculative transaction, poor credit history, poor business track record, lack of evidence to repay, high LTV, start-up business and so forth make your loan request “Less than Standard” and then MAY, if at all, only qualify for a Hard Money Loan, with much higher interest rates and points and substantially lower LTV.

commercial appraiser, commercial appraisal

Posted by Cochise at 07:59 AM | Permalink

TRAINING SERIES ON UNDERWRITING COMMERCIAL FINANCE
Part 1

’
Charles Pixley
RAMA ENTERPRISES, Inc.
Real Asset Management Associates
515 Madison Ave., 5W, New York, NY 10022
charlespixley@rocketmail.com
Skype: toanangel
585 217 2191


Volume 1 Issue 1
TRAINING SERIES ON UNDERWRITING COMMERCIAL FINANCE

INTRODUCTION

I am honored to be able to offer you this course which will be emailed to you over the next few weeks. Please feel free to ask questions, as I am sure if you are unclear others may have the same question and together we will have a better learning experience.

Will try to reduce the subject matter to the least amount possible and convey the greatest amount of understanding.

Ideally this information will help you garner a more well qualified base of clients as they learn of your professional ability and ultimately the most important point of all, achieve a win for your client and then a win for you when it the deal closes.

The basic definition of commercial lending is to provide finance to a business, or property, whose ultimate function is the creation of profit.

The purpose of this newsletter is to provide you with specialized information on underwriting commercial loans, which is hard to find and its various types, under the heading of capital finance, so you may address the specific needs of a targeted audience.

This is designed to guide you through the fundamentals of audience as concerns understanding COMMERCIAL LOANS & UNDERWRITING and how “INVESTORS,” a.k.a lenders evaluate scenarios and qualify the proposal and prospect for potential funding.

GETTING STARTED

This business takes guts, drive and intense persistence, and the ability to survive financially, the period of time required to understand, build a book of business and know how to underwrite the various proposals and where to go to find the funds.

In our current market non-traditional sources of funds have become the go-to or lender of first choice, so the opportunity to review a myriad of deals is immense.

Some borrowers are highly sophisticated and know far more than the average loan officer, however, for the most part, simply don’t know what they are doing and don’t understand the process.

These days, almost all business borrowers have been, burned, turned out, or turned down, or simply they are ill qualified. Most unsophisticated clients embellish values, and don’t tell the whole truth and nothing but the truth, and that makes your job as an underwriter more of a Sherlock Holmes.

Many borrowers try to manipulate the money into what they think they want or should get, or they flat out are liars, or worse yet they are frauds. But, as you know money is like water, it seeks its own level and it KNOWS intrinsically what to do and what the rates are.

Unless you have the aforementioned I would not recommend entering this business, full time, at all. Although one never stops learning, nor finding new creative ways to structure deals

Realistically, the learning curve, if you were to do nothing but commercial loans, all day everyday at a modest rate of about 50 calls and interviews per day, can be about one year.

Once you have a working understanding, have been beaten up by borrowers and lenders there is a clarity focus that comes and all the pieces come together, THEN it becomes much easier.

Perhaps, the most important element of all is that, your clients can hear the experience level in your voice. Therefore, as you become more confident, you will inspire confidence in your clients and they will be more receptive to giving you their business.

In the next issue we will cover THREE IMPORTANT RATIOS and how these values are determined and the pitfalls from an commercial underwriters perspective.

commercial appraiser-appraisal

Posted by Cochise at 07:56 AM | Permalink

HUD Awards Over $1B in Recovery Act Funds to Jump Start Affordable Housing Construction
Published: July 01, 2009

By Anuradha Kher, Online News Editor

Washington, D.C.--The U.S. Department of Housing and Urban Development (HUD) is approving plans submitted by state housing finance agencies for $1,035,322,485 to jump start affordable housing programs in states throughout the country that are currently stalled due to the economic recession. Funded through the American Recovery and Reinvestment Act of 2009 (Recovery Act), HUD's new Tax Credit Assistance Program (TCAP) will allow 26 state housing finance agencies to resume funding of affordable rental housing projects across the nation while stimulating employment in the hard-hit construction trades.

“The purpose of the American Recovery and Reinvestment Act is to jumpstart the nation's ailing economy, with a primary focus on creating and saving jobs in the near term," says HUD Secretary Shaun Donovan. "The funding being announced is an important step in achieving the goal of putting the American people back to work while providing quality, affordable housing options for low-income families at a time when those options are needed more than ever." 

The current economic and financial crises present significant challenges for the construction industry, particularly residential construction. One of the by-products of this crisis has been the freezing of investments in the low-income housing tax credit (LIHTC) market. The tax credits create an incentive for investors to provide capital to developers to build multifamily rental housing for moderate- and low-income families across the nation. Since the contraction of the credit market, and as traditional investors remain on the sidelines, the value of tax credits has plummeted. Consequently, as many as 1,000 projects (featuring nearly 150,000 units of housing) are on hold across the country.  

In response, the Recovery Act provides $2.25 billion for TCAP, a grant program to provide capital investments in these stalled LIHTC developments. HUD is awarding these TCAP grants by formula to 52 state housing credit agencies (all 50 states plus the District of Columbia and the Commonwealth of Puerto Rico) to complete construction of qualified housing projects that will ultimately provide affordable housing to an estimated 35,000 households nationwide. Since a major purpose of this program is job creation, the Recovery Act establishes ambitious deadlines for expenditure of grant funds and requires state housing credit agencies to give priority to projects that can begin immediately and be completed by February 16, 2012.

Under this first round of TCAP funds, 26 state housing finance agencies received awards today. The remaining 26 grants are to follow in the coming weeks. (commercial appraiser/appraisal)

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Former Indiana Water Treatment Plant Superintendent Pleads Guilty to Falsifying Reports
Tue, 30 Jun 2009 09:00:00 -0500

Herbert L. Corn, the former superintendent of the city of Rochester Wastewater Treatment Plant in Rochester, Ind., pleaded guilty today in U.S. District Court in South Bend, Ind., to falsifying monthly discharge monitoring reports that concealed violations of the Clean Water Act at the Rochester plant.

Posted by Cochise at 12:42 PM | Permalink

From: HUD USER News
 
The Office of Policy Development & Research (PD&R)
recently updated our Guide to HUD USER Data Sets. The
Guide briefly describes each of 20 data sets maintained
and kept current by PD&R, and includes the website
address, release information, format(s), and the relevant
timeframe for each data set. Our collection is currently
comprised of the following:
 
o Fair Market Rents
o Income Limits
o 50th Percentile Rent Estimates
o Annual Adjustment Factors
o The 2001 Residential Finance Survey
o Assisted Housing: National and Local
o Low-Income Housing Tax Credit Database
o Qualified Census Tracts and Difficult Development Areas
o American Housing Survey (National and Metropolitan Data)
o Property Owners & Managers Survey
o Consolidated Plan Data (CHAS Data)
o HUD Subprime and Manufactured Home Lender List
o Special Tabulations of Households
o Government Sponsored Enterprise Data
o State of the Cities Data Systems
o Neighborhood Stabilization Program Data
o Components of Inventory Change (CINCH) Reports
o Housing Affordability Data Systems
o HUD Aggregated USPS Administrative Data on Address
 Vacancies
 
The new Guide to HUD USER Data Sets can be downloaded
at www.huduser.org/datasets/pdrdatas.html, or a print
copy can be ordered by calling 800-245-2691, option 1.
Both versions are available free of charge.
 
--------------------------------------
Please contact us at:
HUD USER
P.O. Box 23268
Washington, DC 20026-3268
1-800-245-2691
1-800-927-7589 (TDD)
202-708-9981 (fax)
--------------------------------------
The HUD USER News eList keeps busy professionals in the
fields of housing and community development informed of
new research and resources available from the U.S.
Department of Housing and Urban Development's Office of
Policy Development and Research (PD&R). Periodically,
publication announcements and other useful information
will be sent via the eList. The HUD USER and Regulatory
Barriers Clearinghouses value your privacy; we do not
share our mailing lists with other groups, and you can
unsubscribe at any time.
 
You can search the eList archives
at http://listserv.huduser.org/.
 
Why not share HUD USER's resources and information with
a colleague? Forward this email to associates who may be
interested in the housing research and data sets we have
to offer. Thanks!
 
To keep up with the latest HUD research and related
resources, you can also sign up for a free subscription
to our ResearchWorks newsletter (in either electronic or
print-based formats) by visiting http://www.huduser.org/emaillists/subscr.html.
 
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You were sent this HUD USER News update because
you expressed interest in receiving a weekly email to
stay informed of new HUD research and resources. If you
no longer wish to receive this email, please send an
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as the SUBJECT.

hud/fha Appraiser

Posted by Cochise at 01:10 PM | Permalink

Hot Seat Gets Hotter for Expert Witnesses

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It's a tough time to be an expert witness. Courts are increasingly ordering such witnesses to disclose financial information or risk having their testimony struck from a case.

Also, in recent years, a growing number of courts have permitted parties to sue their own experts for negligent testimony, holding that expert witnesses should not be immune from liability from their own clients.

In California, a couple is suing a property-appraisal expert they hired for allegedly failing to adequately estimate the costs to rebuild their home, which was destroyed in a fire. The couple claimed the expert's estimate was $1.8 million off. The California Supreme Court in April refused to hear an appeal from the expert, who claimed immunity. Lambert v. Carneghi, No. 439931 (San Francisco Co., Calif., Super. Ct.).

In Utah, a couple is suing a medical expert they hired in a wrongful death suit for changing his testimony on the eve of trial, which led to the dismissal of the case. In March, the 10th U.S. Circuit Court of Appeals ruled that the lower court erred in dismissing the couple's suit against the expert. The case has been remanded. Pace v. Swerdlow, 519 F.3d 1067 (10th Cir. March 4, 2008).

"The trend in the country is to allow this sort of thing — and people are starting to do it," said Craig Moody, a San Francisco solo practitioner who represents the plaintiffs in the California fire case.

"You shouldn't be able to sue an expert just because you don't like his result . . . but you should be able to sue if he's negligent," he said.
http://www.law.com/jsp/article.jsp?id=1202421309162

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11.482J / 1.825J / ESD.193J Regional Socioeconomic Impact Analyses and Modeling

Fall 2008

Aerial view of the Boston harbor and city skyline. (Image courtesy of the ATIS547 on flickr.)

Course Description

The seminar is designed to provide advanced graduate students with a thorough understanding of selected regional economic theories and techniques and with experience in using alternative socioeconomic impact assessment models and related regional techniques on microcomputers. Discussions will be held on particular theoretical modeling and economic issues; linkages among theories, accounts, and policies; relationships between national and regional economic structures; and methods of adjusting and estimating regional input-output accounts and tables. Examples from the Boston area and other U.S. cities/regions will be used to illustrate points throughout the seminar. We will also examine how such models are used in other countries. New material on analyzing regional development issues will be covered.

http://ocw.mit.edu/OcwWeb/Urban-Studies-and-Planning/11-482JFall-2008/CourseHome/index.htm

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    http://www.lincolninst.edu/subcenters/significant-features-property-tax/ 

Property Taxation as a Field of Study

History

Core Module

Core Module for Property Tax Curriculum(89K)


If you encounter any problems while viewing or downloading files, please email help@lincolninst.edu.

http://www.lincolninst.edu/subcenters/property-valuation-and-taxation-library/

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		$1.5 Million Grants Available Now The State Water Board announced this week the availability of grant funding, up to $1.5million per project for cleanup activities on brownfield sites contaminated by Petroleum Underground Storage Tanks. Eligible applicants include: Subject Requirements Eligible Applicant Does not qualify for the UST Cleanup Fund. Did not cause or contribute to release. Has no affiliation with a person who caused or contributed to the release. Eligible Site Must qualify as a Brownfield, Principal source of contamination is from a petroleum UST. Financially Responsible Party No financially responsible party has been identified to pay for the cleanup costs.   For questions or more information about the OSCF Program, please visit the website below or contact: www.waterboards.ca.gov/water_issues/programs/ustcf/osca.shtml Judy Reid, Associate Government Program Analyst Orphan Site Cleanup Fund 1001 I Street, 17th Floor Sacramento, CA 94244 916.341.5760 jreid@waterboards.ca.gov Click below to download the OSCF Grant application form http://www.waterboards.ca.gov/water_issues/programs /ustcf/docs/osca/final_app2.pdf
		The Center for Creative Land Recycling (CCLR or "see clear") is a nonprofit organization focused on creating sustainable communities by identifying and implementing responsible patterns of land use and development Our work is accomplished through training, technical assistance, and funding for communities who are attempting to recycle vacant or environmentally distressed properties, commonly known as brownfields.

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Cert Denied Update Posted: 26 Jun 2009 12:01 AM PDT Last week's cert grant by the Supreme Court in Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted, June 15, 2009) got us to thinking about other petitions in takings and land use cases which we've discussed, so here's an update on the cases denied review: Empress Casino Joliet Corp. v. Giannoulias, No. 08-945 (cert. petition filed Jan. 21, 2009) - the Illinois Supreme Court held (896 N.E.2d 277 (Ill. 2008) that a regulation which imposes a 3% "surcharge" on Illinois casinos with gross receipts over $200 million per year, and then gives the money to horse racing tracks is not a taking of property. Several casinos challenged the law asserting, among other arguments, that the redistribution of their money to tracks was a taking.  The Illinois Supreme Court held that the regulation was a tax, and not subject to takings analysis. Cert denied June 8, 2009. Fairbanks North Star Borough v. U.S. Army Corps of Engineers, 543 F.3d 586 (9th Cir. 2008)- the Ninth Circuit held that since the Corps' jurisdictional determination is not a final agency action, the property owner cannot immediately challenge it under the Administrative Procedures Act. Cert denied June 22, 2009. Joy Builders, Inc. v. Town of Clarkstown, 11 N.Y.3d 863 (2008) - the New York Supreme Court Appellate Division upheld the imposition of a fee in lieu of a dedication of land. Cert denied April 20, 2009. Navajo Nation v. United States Forest Service, 535 F.3d 1058 (9th Cir. 2008) - the Ninth Circuit determined it was not a "substantial burden" on the religious exercises of Native American tribes under the Religious Freedom Restoration Act for the Forest Service to allow a ski resort to make artificial snow from recycled sewage water on a mountain considered by the tribes to be sacred. Cert denied June 8, 2009. McClung v. City of Sumner, 548 F.3d 1219 (9th Cir. 2008) (cert petition filed Mar. 2, 2009) - the Ninth Circuit held that legislatively imposed exactions should be analyzed under the Penn Central ad hoc standards and not under Nollan/Dolan. Cert denied June 8, 2009. AmeriSource Corp. v. United States, No. 08-497 (cert. petition filed Oct. 15, 2008) - the Federal Circuit held that the seizure as evidence was not a taking for public use because the seizure was an exercise of the government's "police power," and not an exercise of eminent domain. Cert denied March 23, 2009. This posting includes an audio/video/photo media file: Download Now

Links From ABA Condemnation Committee Conference Call Posted: 25 Jun 2009 11:59 AM PDT A very interesting conference call today, focusing on the property-related decisions by SCOTUS nominee Sotomayor and the takings case recently accepted for review by the U.S. Supreme Court. Here are the links to some of the cases and other topics discussed during today's call, and other items of interest which we didn't have time for: Judge Sonya Sotomayor's decisions about eminent domain and regulatory takings Resource page for the Florida beachfront takings case, Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted, June 15, 2009). On Judicial Takings, And The Hawaii Water Rights Backstory In Stop The Beach Renourishment - our summary of Robinson v. Ariyoshi, 753 F.2d 1468 (9th Cir. 1985) and Sotomura v. County of Hawaii, 460 F. Supp. 473 (D. Haw. 1978), two cases regarding judicial takings relied upon by the cert petition, Scalia and O'Connor's dissent from the denial of cert in Stevens v. City of Cannon Beach, 510 U.S. 1207 (1994) ("As a general matter, the Constitution leaves the law of real property to the States. But just as a State may not deny rights protected under the Federal Constitution through pretextual procedural rulings, see NAACP v. Alabama ex rel. Patterson, 357 U.S. 449, 455-458 (1958), neither may it do so by invoking nonexistent rules of state substantive law. Our opinion in Lucas, for example, would be a nullity if anything that a State court chooses to denominate "background law" -- regardless of whether it is really such -- could eliminate property rights."). McQueen v. South Carolina Coastal Comm'n, 530 S.E.2d 628 (S.C. 2000). Pruneyard Shopping Center v. Robbins, 447 U.S. 74 (1980) (California Supreme Court's interpretation of California Constitution's free speech clause to require a shopping center to allow handbilling on its property was not a taking). Another beachfront case - Severance v. Patterson, No. 07-20409 (5th Cir., Apr. 23, 2009).  Case to watch: Casitas Municipal Water District v. United States, 543 F.3d 1276 (Fed. Cir. 2008). More here. Property owners entitled to damages including reasonable attorneys fees and costs for failed condemnation attempt, even if government prevails in intermediate steps. More here. Delegation of eminent domain power: redevelopment agency without power to take property until it enters into a development agreement when statute requires as a condition precedent. Eagan Economic Development Authority v. U-Haul Company of Minnesota, No. A08-0767 (Minn. Ct. App., May 19, 2009). Delegation of eminent domain power: statutory delegations strictly construed. Spokane Airports v. RMA, Inc., No. 26538-2-III (Wash. Ct. App., Apr. 28, 2009). Might Makes Blight In The New York Appellate Division - Develop Don't Destroy Brooklyn v. Urban Dev. Corp., 2009 NY Slip Op 01395 (Feb. 26, 2009). Determining Eminent Domain Pretext In Serial Takings - County of Hawaii v. C&J Coupe Family Ltd. P’ship, 198 P.3d 615 (Haw., Dec. 24, 2008) (proposed Findings of Fact and Conclusions of Law on remand). Rose Acre Farms, Inc. v. United States, No. 2007-5169 (Fed. Cir., Mar. 12, 2009) - regulation restricting the sale of eggs was not a taking under Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978), because the economic impact of the regulation "was not severe" and the character of the government action "strongly favored" the government. This posting includes an audio/video/photo media file: Download Now

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The FOOLS on the HUD, Tom Wilke

Name: Cochise
E-Mail: cochise@justice.com
Subject: The FOOLS on the HUD, Tom Wilke
Body of Message:

They don't want HUD Approved Appraisers to have direct contact with HUD Review Appraisers. We think they should. LOAN UNDERWRITERS AND MORTGAGE BROKERS HAVE THEIR NUMBERS WE FEEL YOU SHOULD TO, HERE ARE TWO DIRECT NUMBERS, CALL THEM IF YOU HAVE ANY QUESTIONS.  

Tom Wilke @ HUD 714-796-1200 x 3401..I think I spoke to Susan in UW x 3466 regarding this, not sure but it was one of them..

The FOOLS on the HUD, Tom Wilke

Link: Commercial Appraiser
Added on Date: 15:59:03 06/24/09

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On Judicial Takings, And The Hawaii Water Rights Backstory In <em>Stop The Beach Renourishment</em> Posted: 24 Jun 2009 04:32 AM PDT The U.S. Supreme Court last week agreed to review the Florida Supreme Court's decision in Walton County v. Stop the Beach Renourishment, Inc., 998 So.2d 1102 (Fla. Sep. 29, 2008), which held that a state statute prohibiting "beach renourishment" without a permit did not effect a taking of littoral (beachfront) property, even though it altered the long-standing rights of the owners to accretion on their land and direct access to the ocean. See Stop the Beachfront Renourishment, Inc. v. Florida Dep't of Environmental Protection, No. 08-11 (cert. granted. June 15, 2009). More background on the case at our resource page. The Court accepted three questions for review, and the cert petition relied on two rather notorious cases with Hawaii origins to support the conclusion that a decision by a state court which unexpectedly changes established state common law rules of property is a compensable taking. See Pet. at 31-32 (citing Robinson v. Ariyoshi, 753 F.2d 1468 (9th Cir. 1985); Sotomura v. County of Hawaii, 460 F. Supp. 473 (D. Haw. 1978)).  The first Question Presented accepted for review is: The Florida Supreme Court invoked "nonexistent rules of state substantive law" to reverse 100 years of uniform holdings that littoral rights are constitutionally protected. In doing so, did the Florida Court's decision cause a "judicial taking" proscribed by the Fifth and Fourteenth Amendments to the United States Constitution?   In this post, we will explore the background to the esoteric issue of "judicial takings" presented by the two Hawaii cases. Robinson v. Ariyoshi — The Never Ending (Water Rights) Story The Robinson litigation is one that holds a special place in our hearts, as it is a tale interwoven with the recent history of Hawaii, taking us from the time before jet travel when sugar and pineapple -- not tourism -- were the economic engines driving politics and the economy of the Territory of Hawaii, through the salad days of the openly activist Hawaii Supreme Court under the leadership of Chief Justice William S. Richardson, and finally sputtering out (sort of) after the U.S. Supreme Court's ripeness ruling in Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). Here's the short summary, repeated from memory (the litigation, which is still pending, has been going on for 50 years now, so please forgive us if a few of the details are off). The case started out in 1959 in a Kauai county trial court as a dispute between several sugar plantations over which of them possessed the rights to surplus water in a Kauai stream, among other things. Nine years later, the trial court issued a 65-page decision based on long-standing Kingdom, Territory, and State water law, and declared who owned what. So far, it was just another in a long line of water disputes between private parties. The losing parties took the case to the Hawaii Supreme Court (in those days, there was no Intermediate Court of Appeals and all appeals by right went directly to the Supreme Court), where no party, including the State, argued that the controlling water law was anything but as established by long-standing Hawaii cases. The Hawaii Supreme Court, however, "sua sponte overruled all territorial cases to the contrary and adopted the English common law doctrine of riparian rights." Robinson, 753 F.2d at 1470 (citing McBryde Sugar Co. v. Robinson, 54 Haw. 174, 504 P.2d 1330 (1973)). The court "also held sua sponte that there was no such legal category as "normal daily surplus water" and declared that the state, as sovereign, owned and had the exclusive right to control the flow," and "that because the flow of the Hanapepe was the sovereign property of the State of Hawaii, McBryde's claim of a prescriptive right to divert water could not be sustained against the state." Robinson, 753 F.2d at 1470. In other words, in a dispute between "A" and "B" over which of them possessed water rights, the Supreme Court simply said "neither of you do, the State owns it all." The private parties who thought they had owned something for over a hundred years were understandably a bit miffed that their property had seemingly morphed into public property by the stroke of a Justice's pen, and, to add insult to injury, without even the chance to brief the Supreme Court before it announced the new rule. But after a rehearing on a narrow issue of state law, and which rebuffed an attempt by the private parties to raise federal constitutional issues, the Hawaii Supreme Court reaffrimed the McBryde ruling, with two Justices dissenting. See McBryde Sugar Co. v. Robinson, 55 Haw. 260, 517 P.2d 26 (1973) (per curiam). Justice Bernard Levinson switched his vote from the first opinion, concluding that it was a "radical departure" from established law, and was a taking: Although I voted with the majority of this court in McBryde Sugar Co. v. Robinson, 54 Haw. 174, 504 P.2d 1330 (1973) [hereinafter referred to as McBryde I], I am constrained to recant that position in view of my current understanding of the problems of this case.  In light of the arguments adduced on rehearing, historical evidence discovered upon further research subsequent to the court's previous decision in this case, and a reappraisal of the reasoning supporting that decision, it is my opinion that the court committed error in holding that all surplus water belongs to the State and that private water rights, however acquired, may not be transferred to nonappurtenant land.  Because of the importance of this case to the development of the law on the subject of Hawaii's water resources, I have undertaken to present a detailed analysis explaining why McBryde I is not in keeping with long established and unique principles of Hawaiian water law.  Precisely because McBryde I is such a radical departure from these principles as they have been heretofore understood, moreover, I have concluded that McBryde I effectuates an unconstitutional taking of the appellant's and cross-appellants' property without just compensation and should be reversed on this ground as well.   McBryde, 55 Haw. at 262-63, 517 P.2d at 27 (Levinson, J., dissenting). The U.S. Supreme Court denied certiorari meaning the Hawaii Supreme Court's McBryde decision was final. But it was not the last word. The sugar companies sued the state (Governor Ariyoshi, actually, since under Ex parte Young, 209 U.S. 123 (1908), a state official can be sued to enjoin unconstitutional conduct despite the 11th Amendment) in federal district court under the federal civil rights statute, 42 U.S.C. § 1983. The district judge -- the inimitable Martin Pence -- held that the Hawaii Supreme Court's McBryde decision took property without just compensation, and enjoined the state from enforcing the decision. See Robinson v. Ariyoshi, 441 F.Supp. 559 (D.Haw. 1977). Up to the Ninth Circuit the parties went, which noted the tortured procedural path the case next took, including a detour back to the Hawaii Supreme Court on certified questions when the Ninth Circuit asked the court whether it really meant what it said in McBryde: The leisurely pace of this litigation has produced three oral arguments in this court, two of which were followed by referral of certified questions to the Supreme Court of Hawaii. See Robinson v. Ariyoshi, 65 Hawaii 641, 658 P.2d 287 (1982) (Robinson II). Following the publication of the state court's answers to the certified questions, the parties briefed the remaining issues that had been narrowed by the earlier proceedings and reargued the case. A number of complex questions remain, but to expedite the matter we will discuss only those essential to a resolution of the main question: Can the state, by a judicial decision which creates a major change in property law, divest property interests? Robinson, 753 F.2d at 1471. [Barista's note: are you keeping score yet? There's McBryde. McBryde II. McBryde III. Robinson I. Robinson II. Robinson III. Still to come: Robinson IV, V, VI, VII, and VIII, and then back to McBryde IV.]  After addressing jurisdictional issues, res judicata, and the Rooker/Feldman doctrine, the Ninth Circuit addressed the merits: The state conceded at oral argument that the Fourteenth Amendment would require it to pay just compensation if it attempted to take vested property rights. The substantive question, therefore, is whether the state can declare, by court decision, that the water rights in this case have not vested. The short answer is no. Robinson, 753 F.2d at 1473.The court determined that the water rights claimed by the private parties were vested rights, and that the state legislature or the state supreme court cannot alter those rights without condemnation and payment of just compensation. By the time Robinson IV rolled around, the U.S. Supreme Court had issued its ruling in Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) that certain regulatory takings case were not ripe, and it granted cert and summarily vacated the Ninth Circuit's Robinson decision, ordering it to consider the decision again in light of Williamson County's new ripeness rules. See Ariyoshi v. Robinson, 477 U.S. 902 (1986) (Robinson IV). The Ninth Circuit vacated its earlier order (Robinson v. Ariyoshi, 796 F.2d 339 (9th Cir.1986) (Robinson V) and sent the case back to Judge Pence in the District Court. Not to be deterred, Judge Pence found the case ripe under Williamson County. See Robinson v. Ariyoshi, 676 F.Supp. 1002, 1020-21 (D.Haw. 1987) (Robinson VI). Back up to the Ninth Circuit they went, and in Robinson v. Ariyoshi, 854 F.2d 1189 (9th Cir. 1988) (Robinson VII), the Ninth Circuit ordered further briefing on the issue.  In Robinson v. Ariyoshi, 887 F.2d 215 (9th Cir. 1990) (Robinson VIII), the Ninth Circuit vacated the District Court's decision and sent it back with instructions to dismiss the case because it was not ripe under Williamson County. A thirty-one year old case was not ripe, you say?  How so? As noted, we previously certified six questions to the Supreme Court of Hawaii. In response, the Hawaii court stated that the decision in McBryde II did not constitute the final disposition of the case. See Robinson II, 658 P.2d at 295-97. The court explained that the McBryde litigation began and was treated throughout by the trial court as an action to determine the rights of the parties to the waters of the Hanapepe. The trial court had attempted to identify the exact quantity of water to which each party was entitled. On appeal, the Supreme Court of Hawaii affirmed the award of appurtenant rights and reversed the award of prescriptive and surplus rights. No specific instruction was imparted to the trial court, and the Supreme Court did not utilize its power to render a final judgment. Further, no further proceedings are of record in the trial court. The court explained that the partial reversal without instruction merely rendered that portion of the judgment void. Id. at 296-97. Thus the only portion of the judgment which could be considered final after appeal was the partial quantification of the parties' water rights, namely the award of appurtenant rights. Robinson VIII, 887 F.2d at 218 (footnote omitted). Unbelievably, a third cert petition was not sought, and the litigation (per the Hawaii Supreme Court's edict as noted above) went back to the Kauai trial court where it all began in 1959, where, as far as anyone in these parts is aware, the case remains on the docket. The state certainly has no interest in moving it forward and ripening the case, and the private parties who originated the litigation are long since out of the sugar business. Kauai is now a place of tax revolts, zoning fights, and quiet beaches, and the sugar industry is but a distant memory.   County of Hawaii v. Sotomura — Shifting The Line in the Sand If you have managed to come along this far, congratulations -- there's more, but thankfully it's a shorter tale and one which follows the same general plot. McBryde/Robinson was not a unique case, and the Hawaii Supreme Court regularly accomplished similar changes in established law in other areas. In County of Hawaii v. Sotomura, 55 Haw. 176, 517 P.2d 57 (1973), the court redefined the seaward boundary of a littoral parcel in a condemnation action from the high water mark to the "upper reaches of the wash of the waves," holding that no compensation was owed for the land seaward of the new line because it was owned by the state. The trial court had awarded nominal compensation of one dollar to the property owner for the condemnation of this property, but the Supreme Court declared that was error and took the dollar away. [Disclosure: my late law partner and name partner of our firm, Charlie Key, represented the property owners in the Hawaii Supreme Court.] The property owners followed the Robinson script and sued in federal district court (for due process violations, not under a takings theory). The court determined "[j]udicial transfers of title to private lands to the State which do not permit the owner an opportunity to be heard or to present evidence is not constitutionally valid. Whenever a party is to be deprived of property, he is entitled to a meaningful hearing before the fact." Sotomura v. County of Hawaii, 460 F. Supp. 473, 478 (D. Haw. 1978). The district court concluded: This Court fails to find any legal, historical, factual or other precedent or basis for the conclusions of the Hawaii Supreme Court that, following erosion, the monument by which the seaward boundary of seashore land in Hawaii is to be fixed is the upper reaches of the wash of the waves. To the contrary, the evidence introduced in this case firmly establishes that the common law, followed by both legal precedent and historical practice, fixes the high water mark and seaward boundaries with reference to the tides, as opposed to the run or reach of waves on the shore. For example, on the Island of Hawaii, the seaweed line was used to indicate the level of the high tides and high water mark. The decision in Sotomura was contrary to established practice, history and precedent and, apparently, was intended to implement the court's conclusion that public policy favors extension of public use and ownership of the shoreline. A desire to promote public policy, however, does not constitute justification for a state taking private property without compensation. Id. at 480-81. The state's appeal to the Ninth Circuit was dismissed as untimely. Just think of the possibilities if the deadline had not been missed -- this case might still be going on today. This posting includes an audio/video/photo media file: Download Now

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California Tax Credit Allocation Committee

American Recovery and Reinvestment Act (ARRA) Funding Applications

• 2007 & 2008 Low Income Housing Tax Credit Ceiling (9%) Reservation Holders without State Tax Credits - Full or Partial Tax Credit Exchange
  • Memo (Please read prior to completion of application)
  • Application (MS Word)
• 2007 & 2008 Low Income Housing Tax Credit Ceiling (9%) Reservation Holders with State Tax Credits - Full or Partial Tax Credit Exchange
  • Memo (Please read prior to completion of application)
  • Application (MS Word)
• 2007 & 2008 Low Income Housing Tax Credit Ceiling (9%) Reservation Holders - Gap Financing
  • Memo (Please read prior to completion of application)
  • Application (MS Word)
• 2007 & 2008 and early 2009 4% Tax Exempt Bond Reservation Holders - Cash in Lieu and Gap Financing (New)
  • Memo (Please read prior to completion of application)
  • Application (MS Word)

Posted by Cochise at 08:14 AM | Permalink

Multifamily Mortgage Delinquency Rates Rise in First Quarter ‘09
Published: June 22, 2009

By Anuradha Kher, Online News Editor

Washington, D.C.--The weakening economy and continued credit crunch led to increases in multifamily mortgage delinquencies during the first quarter of 2009, according to the Commercial/Multifamily Delinquency Report, released by the Mortgage Bankers Association (MBA).
 
"Multifamily mortgage delinquency rates continued to rise in the first quarter," Jamie Woodwell, vice president of Commercial Real Estate Research at the MBA, tells MHN. “Numbers don’t explicitly break out for multifamily, but the sector is taking the pinch much like other sectors. In fact, multifamily properties have been more rapidly affected than say office, because the leases are short—one year or so. For offices, they tend to be longer and therefore softens the blow a little bit.”

Delinquency rates on commercial and multifamily mortgages held by banks and thrifts, by Fannie Mae and in commercial mortgage-backed securities (CMBS) are all now at levels higher than at any time since the 2001 recession but lower than the downturn in the late 80s-early 90s.

http://www.multihousingnews.com/multihousing/content_display/news/e3i656335a4c7770624cdca2a2a4a149612

Posted by Cochise at 08:11 AM | Permalink

Eminent Domain Academic Round-Up: Pretext And Compensation

Posted: 21 Jun 2009 12:01 AM PDT

I've been reading some noteworthy law journal articles on the subject of eminent domain --  two on the issue of pretext, and one on just compensation. Worth reviewing.

• Daniel S. Hafetz, Ferreting Out Favoritism: Bringing Pretext Claims After Kelo, 77 Fordham L. Rev. 3095 (2009).

  The plaintiffs in Goldstein based their pretext claims on both Justice John Paul Stevens's brief discussion of pretext in the majority opinion of Kelo and Justice Anthony Kennedy's more lengthy discussion in his concurrence. Acknowledging that "[t]here may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption . . . of invalidity is warranted," Kennedy’s fifth-vote concurrence identified the possibility of "a more stringent standard of review than [rational basis review] for a more narrowly drawn category of takings." Although the Second Circuit rejected the application of this heightened pretext standard in Goldstein, it acknowledged that "Kelo opened up a separate avenue for a takings challenge" where the plaintiff alleges the asserted public purpose is a pretext for bestowing a private benefit.

  Article available here from the Fordham Law Review. (In the section on Goldstein and Twombly, this inversecondemantion.com post is cited.)

• Daniel B. Kelly, Pretextual Takings: Of Private Developers, Local Governments, and Impermissible Favoritism, 17 Sup. Ct. Econ. Rev. (forthcoming Summer 2009). inner).

  Since Kelo v. City of New London, the preferred litigation strategy for challenging a condemnation that benefits a private party is to allege that the taking is "pretextual." This Article contends that, although pretextual takings are socially undesirable, the current judicial test for identifying such takings is problematic. Yet an alternative, intent-based test might be impracticable, as well as underinclusive: condemnors
  often have mixed motives, particularly when confronted with a firm’s credible threat to relocate. Instead, the Article develops a framework that emphasizes informational differences between local governments and private developers. When the government lacks information regarding the optimal site for an assembly, the government may need to rely on a private party to identify, as well as develop, a particular site. However, when the government itself possesses information regarding the site, precondemnation private involvement, as well as post-condemnation involvement by a preferred developer, is generally unnecessary. Such involvement increases the likelihood of a pretextual transfer without any corresponding public benefit. The Article concludes that a burden-shifting framework, analogous to Title VII’s test for identifying pretext, can be adopted in the takings context. The new framework is then applied to several situations in which allegations of pretext are likely to arise.

  Available here from SSRN.

• Matthew Cory Williams, Restitution, Eminent Domain, and Economic Development: Moving to a Gains-Based Conception of the Takings Clause, 41 Urban Lawyer 183 (Winter 2009) (25th Smith-Babcock-Williams Student Writing Competition Winner).

Post-Kelo, those recognizing the value of eminent domain to aggregate property for redevelopment have suggested that the real focus should not be on whether economic development is a public purpose, but on the amount of compensation given to the takees. Indeed, assuming takees were compensated at the takee’s subjective value, the problem of forcing takees to "sell" their property to the government would be a much less divisive issue. However, current measures of "just compensation" are based on the "fair market value" of the property. In response to this "under compensation," several suggestions have been made on how to raise the level of compensation, and some states have enacted measures aimed at increasing compensation levels. Proposed solutions seek to award some of the benefit of the reaggregation and development of the land, called "after value," to the takees. This article examines whether awarding after value to takees complies with the major purposes of the Takings Clause. While it examines a few of the many proposed ways to award takees a portion of this after value, this article focuses more on whether the general idea of after value complies with the philosophies underlying the Takings Clause.

Article available here for ABA members.

Posted by Cochise at 11:41 AM | Permalink

The California civil code 2945 et seq. makes it a crime for foreclosure consultants (loan modification companies) to operate without Department of Real Estate's(DRE)

All of the companies who are doing operation
of Loan Modification BEWARED !!!!!

Call me for better answers 1-818-279-3079
The California civil code 2945 et seq. makes it a crime for foreclosure consultants (loan modification companies) to operate without Department of Real Estate's(DRE) approval and liable for treble damages, if they take advance fees from you. Therefore, if you have hired a loan mod company without a proper registration with the Department of Real Estate (DRE), please call us on 1-818 279-3079 http://www.shirley-shirley.com

California Civil Code Section 2945

California Civil Code Section 245:

http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=79765&discussionID=4363132&readyToAnswer=readyToAnswer&trk=NUS_DISC_Q_ttle&goback=%2Ehom

Posted by Cochise at 03:43 PM | Permalink