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Presentation on theme: "Trail Guide Sponsor Eagle Scout Sponsor Forest Ranger Sponsor."— Presentation transcript:

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3 Trail Guide Sponsor

4 Eagle Scout Sponsor

5 Forest Ranger Sponsor

6 Adventurers Sponsors

7 Tenderfoots Sponsors

8 Seminar Committee Members Chair Paul Silverman, Geltmore Inc. Chair Paul Silverman, Geltmore Inc. Anne Browne, Sutin, Thayer & Browne PC Anne Browne, Sutin, Thayer & Browne PC Drew Dolan, Titan Development Ltd. Company Drew Dolan, Titan Development Ltd. Company John Lewinger, Grubb & Ellis|New Mexico John Lewinger, Grubb & Ellis|New Mexico Allen Lewis, United Enterprises, Inc. Allen Lewis, United Enterprises, Inc. James Trujillo, REDW The Rogoff Firm James Trujillo, REDW The Rogoff Firm

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10 Energy Efficiency at PNM Sue Fullen, VP, Marketing and Customer Service

11 Drivers for Energy Efficiency 23 States have mandated utilities to achieve cost-effective energy efficiency23 States have mandated utilities to achieve cost-effective energy efficiency New Mexico passed a law in 2005 requiring utilities to achieve reduction of 2005 energy retail salesNew Mexico passed a law in 2005 requiring utilities to achieve reduction of 2005 energy retail sales In 2007 PNM Launched its first energy efficiency programs In 2007 PNM Launched its first energy efficiency programs Aggressive efficiency targets were set in the 2008 Integrated Resource Plan for PNM Aggressive efficiency targets were set in the 2008 Integrated Resource Plan for PNM Customers are asking utilities to find ways to help them lower their billsCustomers are asking utilities to find ways to help them lower their bills Utilities are making energy efficiency a part of their energy supply portfolioUtilities are making energy efficiency a part of their energy supply portfolio Protects the environment Protects the environment Delays construction of new energy resources Delays construction of new energy resources Environmental stakeholders are very active in lobbying for energy efficiencyEnvironmental stakeholders are very active in lobbying for energy efficiency

12 Programs

13 Residential Programs 1.In-Store Home Lighting Discounts 2.Refrigerator Recycling Rebates 3.Compact Fluorescent Light (CFL) Distribution 4.Low-Income CFL and Fridge Replacement 5.Low-Income Easy Savings Kits 6.PNM Power Saver – Demand Response 7.Market Transformation

14 Business Programs 1.New Construction Rebates 2.Retrofit Rebates 3.PNM Quick Saver – Small Business 4.Refrigerator Recycling 5.PNM Peak Saver – Demand Response 6.PNM Power Saver – Demand Response 7.Energy Star Homes – Builder Rebates

15 Program Performance Since 2007 Energy Efficiency Measures Taken by PNM CustomersEnergy Efficiency Measures Taken by PNM Customers Equivalent to energy consumed annually by 12,000 homes Equivalent to energy consumed annually by 12,000 homes Reduced carbon dioxide emissions by estimated 60,000 tons per year Reduced carbon dioxide emissions by estimated 60,000 tons per year Equivalent to taking 10,480 cars off the road for one year Equivalent to taking 10,480 cars off the road for one year Created at least 30 green jobs in New Mexico Created at least 30 green jobs in New Mexico

16 2010/2011 Targets Targets Determined by the 2008 Integrated Resource Plan Long term EE goals based on EE Act mandates and “Potential Study” estimate of “maximum achievable” (Itron Consulting) Annual Savings52 GWH72 GWH Annual Budget$15 M$20 M

17 Customer Benefits PNM spent $4.5 million in incentivesPNM spent $4.5 million in incentives 150 businesses participated150 businesses participated $6 million in incentives projected, including $2 million in commercial rebates$6 million in incentives projected, including $2 million in commercial rebates 200 participants expected in program for large businesses200 participants expected in program for large businesses PNM Quick Saver small business program launchedPNM Quick Saver small business program launched

18 More Information pnm.com/rebates1-888-DIALPNM

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20 Panel 1: How to Find Food & Water (i.e. Deals) Martin Bronstein, Chairman The Situs Companies & Lead Guide

21 Panel 1: How to Find Food & Water (i.e. Deals) Andrew Simons, Shareholder Sutin, Thayer & Browne, PC

22 Foreclosure Comply with requirements of mortgage agreements. Comply with requirements of mortgage agreements. – E.g. notice of default and demand for cure. Residential mortgages. Residential mortgages. – Notice of default and right to cure, and at least 30 days to cure default, required. NMSA 1978, § 52-21A-6 (2009). – Limits on fees, e.g. only $100 for pre-suit attorney fees. Id.

23 Foreclosure General foreclosure process: General foreclosure process: – Obtain title search. – Draft complaint—sue all lienholders, in addition to borrower. – File suit & record lis pendens. – Update title search through date of l.p. recording. If necessary, amend to add late-recorded lienholders. If necessary, amend to add late-recorded lienholders. – Normal lawsuit timeline.

24 Foreclosure … General foreclosure process … … General foreclosure process … – Normal lawsuit timeline: Serve complaint, summons, etc. on defendants (1 – 30 days). Serve complaint, summons, etc. on defendants (1 – 30 days). Defendants then have 30 days to answer. Defendants then have 30 days to answer. – If no answer filed, move for default judgment. – If answer filed, move for summary judgment (30 days). » If discovery required, 75 days. Defendants can respond with motion to dismiss, can assert counterclaims in answer. Defendants can respond with motion to dismiss, can assert counterclaims in answer.

25 Foreclosure … General foreclosure process … … General foreclosure process … – Enter judgment. Foreclosure of client’s interest and all other interests in property. Foreclosure of client’s interest and all other interests in property. Money judgment in amount of debt. Money judgment in amount of debt. Sale of property to satisfy money judgment. Sale of property to satisfy money judgment. Discretion to credit bid all or part of money judgment at sale. Discretion to credit bid all or part of money judgment at sale. Judgment for any deficiency amount after sale. Judgment for any deficiency amount after sale.

26 Foreclosure Pre-judgment judicial remedies. Pre-judgment judicial remedies. – Assignment of rents. Generally provided for in documents. Generally provided for in documents. Can use “self-help”, but risky. Can use “self-help”, but risky. Can doom the borrower, which can be good or bad. Can doom the borrower, which can be good or bad. Source of debt-pay-down for lender. Source of debt-pay-down for lender. – Receivership. Receivership Act. NMSA 1978, §§ et seq. (1995). Receivership Act. NMSA 1978, §§ et seq. (1995).

27 Foreclosure … Pre-judgment judicial remedies... … Pre-judgment judicial remedies... – … Receivership... Lender entitled to receiver if documents provide for one. Section (A) (“district court shall appoint a receiver … where … written agreement provides for the appointment of a receiver.”). Lender entitled to receiver if documents provide for one. Section (A) (“district court shall appoint a receiver … where … written agreement provides for the appointment of a receiver.”). Takes control of property away from borrower, which again can be good or bad. Takes control of property away from borrower, which again can be good or bad. Receiver technically neutral, but usually chosen by lender. Receiver technically neutral, but usually chosen by lender.

28 Foreclosure Sale Sale – Advertise (case caption; judgment date; place, date, time of sale; special master contact information; property description; simple property address; etc.) once/week for 4 consecutive weeks in paper of gen’l circ’n in county where property located. NMSA 1978, § (1931); NMSA 1978, § (1891); NMSA 1978, § (1987); NMSA 1978, § (1895); NMSA 1978, § (1887).

29 Foreclosure …Sale… …Sale… – At least 30 days after entry of judgment. NMSA 1978, § (1931). – At least 3 days after last publication of notice. NMSA 1978, § (1931). – Coordinate w/special master; provide announcements. File affidavit of publication. NMSA 1978, § & -6 (1931). File affidavit of publication. NMSA 1978, § & -6 (1931).

30 Foreclosure File special master’s sale report, move for approval of same and for sale confirmation. Rule 1-053(E) NMRA. File special master’s sale report, move for approval of same and for sale confirmation. Rule 1-053(E) NMRA. Obtain order approving report, confirming sale, directing special master’s deed to buyer at sale. See Rule NMRA. Obtain order approving report, confirming sale, directing special master’s deed to buyer at sale. See Rule NMRA. – No sale confirmation rule/statute, but req’d. Redemption. NMSA 1978, § (1931); NMSA 1978, § (1957). Redemption. NMSA 1978, § (1931); NMSA 1978, § (1957).

31 Foreclosure …Redemption… …Redemption… – Generally 9 months, but can be shortened to 1 month by agreement. Id. Shortened one-month period applies to junior lienholders even though not parties to agreement. Sun Country Savings v. McDowell, 108 N.M. 528, 775 P.2d 730 (1989). Shortened one-month period applies to junior lienholders even though not parties to agreement. Sun Country Savings v. McDowell, 108 N.M. 528, 775 P.2d 730 (1989). Special rights: N.M. has 9 months, NMSA 1978, § (1947); U.S. has a year, 28 U.S.C. § Special rights: N.M. has 9 months, NMSA 1978, § (1947); U.S. has a year, 28 U.S.C. § – Former owner, junior mortgagor/lienholder even if party to suit. Section

32 Foreclosure …Redemption… …Redemption… – Pay to purchaser: the sale amount plus 10% interest. the sale amount plus 10% interest. all taxes, interest, and penalties thereon plus 10% interest. all taxes, interest, and penalties thereon plus 10% interest. all post-sale payments to satisfy prior liens not foreclosed plus 10% interest. all post-sale payments to satisfy prior liens not foreclosed plus 10% interest. – Or deposit above amount with Court and file petition. Section (A)(1) – (2). – Priority of competing redeemers. Section (A)(3)

33 Foreclosure Pre-foreclosure sale to third party. Pre-foreclosure sale to third party. – Until foreclosure sale, borrower, not lender, is owner. Depending on involvement/control of borrower, may need to negotiate with borrower or lender. Depending on involvement/control of borrower, may need to negotiate with borrower or lender. But lender must be kept informed and in end must approve. But lender must be kept informed and in end must approve. Start with the lawyers, but don’t let them get in the way. Start with the lawyers, but don’t let them get in the way. – Don’t assume there will be a fire sale. Price driven by appraisal, concern about Court approval Price driven by appraisal, concern about Court approval Lender can’t jack up deficiency Lender can’t jack up deficiency Lender wants value, just like any other seller. Lender wants value, just like any other seller. Lender not necessarily in a big rush to sell. Lender not necessarily in a big rush to sell. Lender has imperatives other than the market: regulators, internal policies, position in the food chain. Lender has imperatives other than the market: regulators, internal policies, position in the food chain. – Make serious offers – don’t waste time.

34 Foreclosure … Pre-foreclosure sale to third party... … Pre-foreclosure sale to third party... – If receiver appointed, start there. – Nuts & bolts not too different from any deal. – Unless you have a boatload of cash, or just want to see what happens, don’t bother attending the foreclosure sale. – Lender likely to buy at foreclosure sale, and can always buy from lender then.

35 Panel 1: How to Find Food & Water (i.e. Deals) Scott Edwards, Edwards & Associates, LLC

36 Current Credit Environment Lending money successfully requires lenders to predict the future. Lending money successfully requires lenders to predict the future.

37 Current Credit Environment Historical perspective Historical perspective – Economic cycles – The economy made deals easier

38 Current Credit Environment The beginning of the change in environment The beginning of the change in environment – CRE guidance from the banking regulators – Economic downturn

39 Current Credit Environment Regulatory pressure and the need for increased scrutiny Regulatory pressure and the need for increased scrutiny Market conditions Market conditions Contingent debt Contingent debt Global cash flow Global cash flow Future cash flow, current liquidity and/or access to capital Future cash flow, current liquidity and/or access to capital

40 Current Credit Environment

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43 Q & A

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46 Panel 2: How to Build a Shelter (I.E. Due Diligence) Martin Bronstein, Chairman The Situs Companies & Lead Guide

47 Panel 2: How to Build a Shelter (I.E. Due Diligence) Catherine Goldberg, Director Rodey Law Firm

48 Panel 2: How to Build a Shelter (I.E. Due Diligence) Ben Darwin, Principal Meyners + Company

49 Foreclosure Tax Consequences to Debtor Exhibit 1: Tax Consequences to debtor Type of debtAmount realizedBasisSec gain (loss) Sec. 61(a)(12) COD income FMV of property exceeds debt RecoursePrincipal debtTax basis in property Amount realized > basis None NonrecoursePrincipal debt (may include accrued interest under certain circumstances) Tax basis in property Amount realized > basis None Debt exceeds FMV of property RecourseFMV of propertyTax basis in property Amount realized > basis Debt > FMV of property NonrecoursePrincipal debt (may include accrued interest under certain circumstances) Tax basis in property Amount realized > basis None

50 Tax Consequences Property Transfer to Lender Exhibit 2: Property transferred to lender – tax consequences to debtor: Example (assume a non-interest-bearing loan) PropertyFMVTax BasisDebtPrincipal balance Sec gain (loss) Sec. 61(a)(12) COD income Notes A30,000 Recourse36,000-6,0001,2,6 B30,000 Nonrecourse36,0006,0001,3 C30,00028,000Recourse36,0002,0006,0001,4,6 D30,00028,000Nonrecourse36,0008,0001,3 E30,00038,000Recourse36,000(8,000)6,0001,5,6 F30,00038,000Nonrecourse36,000(2,000)1,3 Notes: 1.The income would be active or passive depending upon the characterization of the activity. 2.Since the tax basis equals FMV and the debt is recourse, the transfer results in COD income. 3.For purposes of determining gain with respect to property subject to nonrecourse debt, Sec. 7701(g) provides that the FMV of such property shall be treated as not less than the amount of the nonrecourse debt. 4.Since the tax basis is less than the FMV of the property, gain is recognized to that extent. The balance is COD income. 5.Since the tax basis is greater than the FMV, a loss is recognized to that extent. Since the property is treated as having been sold for its FMV, the difference between the FMV and the debt is COD income. 6.COD income may be excludible under Sec Caution: The determination of whether debt is recourse or nonrecourse for purposes of applying the above rules may differ from its classification for other purposes. For example, the classification of debt for purposes of determining the tax basis of a partnership interest would be dispositive for purposes of determining its character in analyzing the tax consequences of a foreclosure or deed in lieu of foreclosure at the partnership level. A determination is required as to whether the debt is recourse or nonrecourse at the partnership level – for instance, whether the creditors’ rights of recovery are limited to the asset securing the liability (nonrecourse) or can extend to all the assets of the partnership (recourse).

51 Triggering Debt Discharge Income Example 12A-3: Satisfying a partnership debt with the transfer of an interest in the partnership. Manny, Moe and Jack are equal partners in the High Roller Partnership (HRP). HRP has a note payable of $70,000 that it pays off by transferring an interest in HRP with a FMV of $40,000 to the creditor. HRP is considered to have satisfied the $70,000 debt with $40,000 cash. The difference between the note balance ($70,000) and the FMV of the partnership interest used to pay off the debt ($40,000) results in COD income of $30,000. Manny, Moe, and Jack will each report $10,000 of the COD income in their individual income tax return.

52 Q & A

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54 Panel 3: How to Start a Fire (I.E. Raising Equity/Debt) Martin Bronstein, Chairman The Situs Companies & Lead Guide

55 Panel 3: How to Start a Fire (I.E. Raising Equity/Debt) Patricia McBride, CEO Santa Fe Investment Partners, LLC

56 Most CMBS Loans Made at Height of Market Value Source: Deutsche Bank

57 Size of CMBS Market (as of 12/31/04) Sources: (1) NAREIT; (2) Microsoft Website; (3) World Bank; (4) Federal Reserve, Flow of Funds REITs Market Cap 1 Microsoft Market Cap (largest in NYSE) 2 GDP of Switzerland (17 th largest) 3 Commercial and Multifamily Securitizations 4

58 Credit Performance: CMBS Source: FitchRatings, TreppWire Today Delinquency level of 8.02% is once again the highest in history of CMBS industry

59 CMBS Performance by Sector Source: FitchRatings, TreppWire May 2010

60 CMBS Fixed Rate Maturity by Vintage ‘07: $140 B in 2017 ‘07: $25 B in 2012

61 CRE Problems Just Beginning Maturity Schedule for ALL Loans Source: Deutsche Bank

62 Bank Loans Maturing Source: Deutsche Bank ‘07: $72 B in 2014

63 Volume of “Underwater” Loans Only 32% of All Loans Maturing after 2009 Qualify for Refinancing

64 Banks in NM, OK, MO,KS 150 Banks $40.5 Billion in Assets at Risk

65 Economy: Unemployment % % TODAY 4.3%

66 Economy: Unemployment

67 Discounted Loan Sale

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71 Panel 3: How to Start a Fire (I.E. Raising Equity/Debt) Harry Schwethelm, Principal Trinity Real Estate Finance, Inc.

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79 Mark Your Calendars


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