S u m m e r 2 0 1 2 I s s u e

ARIZONA QUARTERLY QUORUM UpcomingChapter Events

September 13th | General Membership Meeting

October 11th | General Membership Meeting4:30pm-5:30pm - Grant Woods

October 11th | Lending to Medical/Dental Course8am-5pm

October 17th | UCP Golf - Silverado

October 25th | WIB Luncheon

November 2nd | RE Fundamentals in CommercialLending - Class 8:00 am - 5:00 pm

November 8th | General Membership Meeting4:30 pm - 5:30 pm; Nancy Greene, AON

Managing a Black Swan Event

November 27th | Building Small Business LoanRelationships - Class 8:00 am - 5:00 pm

January 10th | General Membership Meeting4:30 pm - 5:30 pm - Lender Panel

January 24th | WIB Luncheon

February 14th | General Membership Meeting4:30 - 5:30 pm - Grady Gammage

March 14th | Mid Year STAR Review BODMeeting 3:00 - 4:00 pm

April 7th - 12th | RMAHQ Risk Management School

April 11th | General Membership Meeting4:30 pm - 5:30 pm - FRB Economist

May 9th | PrePlanning Leadership Meeting3:00 pm - 5:00 pm

President’s Corner

Hello and welcome to another exciting year with RMA! Over the summer, your Board of Directors has been tirelessly working to expand the educational offerings available, provide innovative networking opportunities and to generate timely and interesting general meeting topics. We’ve also selected the Ritz Carlton on 24th and Camelback as our new venue for the general meetings and moved the meeting time back to 4:30pm (one half hour later) to help you maintain that work/life balance. I look forward to seeing you all on September 13, 2012 for our first meeting of the year! The Ritz Carlton has a generous happy hour from 3pm-6pm allowing you plenty of time to meet friends and colleagues before and after our meeting. Cheers to a prosperous 2012-2013!

Jim and Keeley with Randy Nikolaus at the 2012 Finance Honors and Awards Luncheon

2012-13 OFFICERS and COMMITTEE CHAIRS

President, Executive Committee, STAR Report, Membership ReportsJennifer GoralskiCapital Asset Management

First Vice President, Executive Committee, Program Committee ChairGreg Fraker, Assistant Vice President/Senior UnderwriterArizona Business Bank

Second Vice President, Sponsorship ChairRachelle Strole, PrincipalCapital Asset Management

Co-TreasurerTracy Hughes, CPATaylor Duffy & Associates

Co-Treasurer, Golf Committee, CRC ChairKory Kober, Relationship ManagerMutual of Omaha Bank

Secretary, Attorney at LawKeeley SmithQuarles & Brady, LLP

Past President/Director, Succession Chair, Past President Council, Executive CommitteeMark Gnirk, Vice PresidentMidFirst Bank

Director, Women in Banking ChairEmily AmparanTransitional Member

Director, Membership ChairBrenda Bevilacqua, Vice President Business DevelopmentCeltic Bank

Director, Membership Co-ChairThomas Burgess, Sr. Credit AnalystNational Bank of Arizona

Director, Scholarship Committee ChairJames Brandes, Senior Vice PresidentArizona Business Bank

Director, Golf CommitteeMike Curry, Attorney At LawRidenour, Hienton, Kelhoffer, Lewis & Garth, PLLC

Director, UCP ChairChristopher Duranto, Assistant Vice PresidentWestern Alliance Bancorporation

Director, Communications ChairMark Feuerer, PresidentSierra Auction Management, Inc.

Director, Charitable Giving Co-ChairShawn Hollenbach, Vice PresidentNorthern Trust Bank

Director, Education Co-ChairJeff Jurgenson, Vice PresidentFarm Credit Services Southwest

Director, Programming Committee, Golf CommitteeDavid Matthews, Senior Vice PresidentHeritage Bank

Director, Education Co-Chair, Audit Committee ChairThomas Murgolo, Assistant Vice PresidentM&I Bank, a division of BMO Financial Group

Director, Women in Banking Co-ChairKathryn Peacock, Regional ManagerPartner Engineering

Director, Charitable Giving Co-ChairBlake Sanders, Commercial Real Estate Loan OfficerMeridian Bank

Director, Operations Group ChairStacy Sanner, Senior Vice PresidentBank of Arizona

Director, Education CommitteeAnsel Tye, Vice President, Business Banking ManagerWells Fargo Bank

Chapter AdministratorKarmie ChristianThe Risk Management Association - Arizona Chapter

Western Regional Manager Erin JesterThe Risk Management Association - Western Regional Executive

RMA National ContactLisa McBrideThe Risk Management Association - Director, Member Relations – Chapters & Community Banks

From The RMA Journal…

Make Smart Moves to Advance Your Banking Career

by Dima Berdiev

For professionals considering banking, or bankers considering leaving one institution to join another, the decision can be difficult. Patience and a positive attitude are critical. Your chances for making a successful career move will improve if you consider several key factors when you weigh your options.

Context and Culture

Examine your potential employer from a macroeconomic perspective, regardless of how small the organization is. What is its position in the competitive landscape and why? Is there steady, stable growth, or has the organization been stagnant or downsizing? Is there even a clear strategy in place? Consider these factors, as they point toward your own future growth or stagnation with the institution.

Many job seekers forget to consider their prospective employers’ reputations. Research the kind of publicity the institution has been getting. Equally important is the company’s unique credit and lending culture, as well as the culture within your potential business unit. Is it inclusive or exclusive of newcomers? Is it a sweatshop? Everyone is familiar with the cliché “We work hard and play hard.” Unfortunately, this may mean, “We will squeeze everything out of you, and if you have some energy left, you can play hard on your own.”

As with all the elements in your analysis of a potential employer, while you are examining an institution’s cul¬ture, remember that your peers and mentors should be your greatest allies and resource. Trusted friends and col¬leagues may be able to reveal otherwise hidden information about a prospective employer, which may save you from a disastrous career move.

Leadership

Many job seekers make the mistake of underestimating the importance of good leadership when considering a new position. It is easy to assume that if you are not applying for a senior or executive management position, leadership will be irrelevant. But it is relevant, regardless of whether the institution is large or small. The quality of leadership determines the horizons or limits of your own growth potential.

If executive management is considering selling the company in the near future, it will focus on maximizing profits, to the detriment of morale, training, and other ben-efits and bonuses. If management is focused on growth at any cost, it may burn out employees, as they labor under intense sales goals.

When considering management quality, first examine your immediate supervisors, because they will determine your day-to-day development and opportunities. What do you know about them, their management styles, and their professional experiences? Do they have a track record of supporting more ju¬nior team members and encouraging their growth? You want to work for managers who show their commitment to support you from the very beginning. Quality management doesn’t always come from employees who have stuck around long enough to be promoted. Don’t forget, though, that you will have to prove yourself in a new organization to earn that ongoing support from your superiors.

Team Members and Team Structure

Group interviews offer an opportunity to learn about the people you will be working with. Make it a two-way exchange, particularly during later rounds of interviews when you know the institu¬tion is seriously interested in you. Be sincere and learn to read people as you talk to them.

Ask yourself whether your prospective teammates are likely to support you. Will they be willing to share their experience and knowledge? Will they be patient with you? Great teams often learn from one another. Are they likely to be willing to learn from you?

It is also important to analyze the structure of your prospective team. Are your teammates lone warriors, or are they truly a team? Do they seem to have an entrepreneurial spirit and are they open to new ideas? Or is the team bogged down by bureaucracy? Take a look at how experienced your teammates are and at how long they have spent with the organization. You may find you could stay and learn a lot, or you may find that you would stagnate.

Again, reach out to your network to learn more about your future team members. The banking community is a small world, particularly on a regional basis.

The Arizona Supreme Court rejects borrowers’ show-me-the-note theory

The Arizona Supreme Court’s May decision, Hogan v. Washington Mutual Bank, N.A., has some of what lenders have been waiting for: it clearly rejects borrowers’ theories that a lender must produce the note in order to foreclose and that foreclosing entities must prove they are parties entitled to enforce a negotiable instrument under the Uniform Commercial Code for a trustee’s sale to proceed. __ P.3d __, 2011 WL 7905162 (Ariz. May 18, 2012) (Berch, C.J.), en banc.

Borrowers have argued that Arizona law requires a foreclosing lender to prove possession of the original promissory note before proceeding with a trustee’s sale, a.k.a., the “show-me-the-note theory”. Although the U.S. District Court, District of Arizona has rejected this theory time and again, Hogan is the first time the Arizona Supreme Court ruled on the issue. The Court affirmed dismissal of the borrowers’ claims because “the deed of trust statutes impose no obligation on the beneficiary to ‘show the note’ before the trustee conducts a non-judicial foreclosure. The only proof of authority the trustee’s sales statutes require is a statement indicating the basis for the trustee’s authority. “ Id. at *2, ¶ 8 (citing A.R.S. §§ 33-808(C)(5), -807(A)).

Borrowers have argued that if a foreclosing entity does not have to produce the note, then the borrower could be subject to collection attempts later by the original note holder. The Hogan opinion responds that the anti-deficiency statutes (where they apply) would preclude any such later collection, and that the trustor could hold the trustee liable for breach of fiduciary duty if it held a sale when the trustor was not in default. Id. at * 3, ¶ 11.

The Court also provided a strong closing statement about why the Court rejected the borrower’s theory:

Non-judicial foreclosure sales are meant to operate quickly and efficiently, “outside of the judicial process.” [citation omitted] … Requiring the beneficiary to prove ownership of a note to defaulting trustors before instituting non-judicial foreclosure proceedings might again make the “mortgage foreclosure process … time-consuming and expensive,” [citation omitted], and re-inject litigation, with its attendant cost and delay, into the process.

Id. at * 3, ¶ 12.

Hogan also puts to rest another frequent argument by borrowers by holding that the Arizona Uniform Commercial Code does not apply to trustee’s sales, and so a trustee does not have to demonstrate it is a “person[] entitled to enforce” the negotiable instrument under A.R.S. § 47-3301 in order to conduct the sale. Id. at * 2, ¶ 9.

Hogan will probably not put an end to lawsuits by borrower seeking to stop foreclosure because borrowers’ counsel will likely craft pleadings that attempt to differentiate their cases from Hogan. However, we expect lender’s legal counsel will be able to demonstrate Hogan’s applicability in many instances in arguing for dismissal.

Sarah Anchors is an attorney with Quarles & Brady LLP whose practices focuses on commercial litigation, including deficiency actions and lender liability.

The opinion is available at https://www.azcourts.gov/Portals/23/pdf2012/CV110115PR_CV110132PR.pdf.

In reaching its decision, the Court cited the oft-cited District Court opinion, Mansour v. Cal-Western Reconveyance Corp., 618 F. Supp. 2d 1178, 1181 (D. Ariz. 2009). Id. at *2, ¶ 6.

In the Know

Questions, Comments, Need more information?Arizona Chapter Email: rmaaz@cox.net

Arizona Chapter Website: www.rmaaz.orgFacebook: The Arizona Chapter of RMA