Wednesday, March 22, 2017

FDIC Insurance on Mutual of Omaha HOA Deposits

From: John Sellers []
Sent: Wednesday, March 22, 2017 12:11 PM
To: Eugene Twellman <>
Cc: Mutual of Omaha Bankers
Subject: FDIC Insurance on Mutual of Omaha HOA Deposits

Mr. Twellman
Our last communication was with regards to the attendance at the recent OAH Hearing of Belinda Chavira. Remarkably the objection to her subpoena came not from you, but from Carpenter Hazlewood. Quite why our HOA’s insurer would pay for that has yet to be determined.
The results of the Hearing will be available in a few weeks as Carpenter Hazlewood threw a Hail Mary at the end of the Hearing asking for the chance to clarify what a “record” is.
Regardless of that, some remarkable information was obtained:
  1. Mr. Vasquez of Trestle Management confirmed under oath that read only user names and passwords for ALL HOA members are available for Mutual of Omaha Bank Accounts.
  2. He also testified that Trestle are NOT acting in a Fiduciary Capacity with regards to the HOA’s Bank Account with you. Click HERE for the audio extract
    • This is despite the fact that your account documentation provides an option for the party involved to be designated as a fiduciary.
  3. The FDIC’s written position appears very clear to us in response to a specific inquiry. Click HERE
  4. No such designation is shown. In fact it’s not clear from the bank statement account title whether the account is 50/50 Trestle/HOA or what? Click HERE
  5. Not only that, but a Management Company is not Schwab. There is a huge difference as you will know between a mere Agent and a Fiduciary
  6. Furthermore, no signature cards for the HOAs account apparently exist. This is despite the fact we have those signature cards from other HOA’s. Click HERE
  7. In that case though the TAX EIN in your bank records is that of the Management Company – NOT THE HOA
  8. We are reliably informed by other banks of the importance of the HOA’s EIN in your records for FDIC insurance to flow through.
A few questions:
  1. Given all the above, are deposits with you properly insured in the name of the HOA?
  2. Why did not your attached letter resigning not show the true legal status of your “depositor”? Click HERE
  3. What SIC code are you using for HOA deposits?
  4. You benefitted from $862mm of FDIC moneys in acquiring CAB. That included bailing out uninsured depositors as well. You now have $4billion of HOA deposits. Are you assuming a repeat of 2008 in 2017 should your extensive real estate portfolio turn sour?

CC: AHF Blog
John Sellers
6231 East Mark Way, Unit 12
Cave Creek
Arizona 85331
Tel: 928 310 8220

Tuesday, March 14, 2017

HOA User Names and Passwords on a read only basis

It seems from the number of bank account user names and passwords on a read only basis arriving from Carpenter Hazlewood, that this is not so uncommon after all. What this allows you to do is look at an HOA bank account but not transact.
I now have 6 different banks who have easily done this

Saturday, March 11, 2017

Who's insuring your HOAs wallet?

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

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

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

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

Thursday, March 2, 2017

You have to laugh

How to Resign from your HOA Board

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

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

Dear Mr. President and Members of our Board,

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

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

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

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

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

With Warmest Regards,

Your Faithfull Volunteer