My past experience as a distressed investor helps me plumb the public record of personal financial distress very quickly.
Let’s see what the public record shows.
Isquierdo’s home and mortgage history in Tucson, AZ
Isquierdo reported that his large IRS tax lien problems stem from the loss he took on a home in Stockton, California that he bought for $700,000 and later sold for $300,000.
He also said he has “learned from his mistakes” which is what will make him a better leader of SAISD.
If you had taken a $400,000 loss on a home, would it be fair to say you have ‘learned from your mistake’ when you move into a $1.15 million golf community home with nearly no money down?
I would like to answer that one myself. No. It is evidence, at least financially, of a guy who learned very little from his mistakes. Instead, it is evidence of a guy desperately grasping for a financial solution that will only hurt him even worse in the long run.
Isquierdo purchased his home in a golf community named “El Conquistador Country Club” for $1.15 million on April 28, 2011 from Roland and Rhonda Freeland.
Isquierdo and his wife Edith purchased the home with a $5,000 down payment, and the sellers of the property, the Freelands, retained a Deed of Trust (aka a Mortgage) for $1.145 million.
Traditional mortgage-lending with a bank requires a 20% down payment. One of the causes of the mortgage crisis was the no or low-money down mortgage, in which purchasers had little ‘home equity’ and therefore little incentive to stay current with their mortgage if they got into financial trouble. Default rates on low-money down mortgages are very high.
The Isquierdos began their home ownership in the Tucson golf community on a $1.15 million home with no home equity. After reportedly losing $400,000 on his Stockton, CA home, he did not regroup and learn from his mistakes.
Isquierdo and his wife do not have a 20% down-payment, nor a 10% down-payment, nor even a 3% down-payment mortgage – of the type that the FHA/VA offers for veterans. Isquierdo and his wife have a 0.43% down-payment mortgage.
History of home mortgage mistakes. Learning opportunities?
It appears from public records that things are not going smoothly with this choice.
Rhonda and Roland Freeland, the Deed of Trust holders, filed a UCC lien with the Arizona Secretary of State in November 2012, naming Isquierdo and his wife as debtors, securing “fixtures including proceeds and products, general intangibles, and vehicles.”
Typically a UCC lien is filed to secure a business loan rather than a home mortgage, but we can infer from this state filing that the Freeland’s feel their Deed of Trust/mortgage to be insufficiently secure.
Unfortunately, it gets worse.
A Notice of Trustee’s Sale of foreclosure was filed 2/19/13 with respect to this property, which indicates that the $1.145 million Deed of Trust is being enforced by the lien holders, the Freelands, for non-payment.
The home is now listed for sale on Zillow.com at $975,000. That’s down from a listing of $995,000 on 2/18/13, and $1,150,000 on 12/13/12. This is the sign of a distressed situation.
If the home eventually sells for, say $945,000, he’ll still be on the hook for approximately $200,000 in a mortgage deficiency balance. By ignoring the IRS tax lien in 2011 and taking on a $1.15 million home with no money down, he managed to exacerbate his precarious financial situation in a way he didn’t have to do. That’s a self-inflicted financial wound.
Needless to say many folks earning $305,000 per year might have managed to address their IRS liens by choosing a more affordable home situation.
All of this is awful and painful for them and not pleasant to point out. On the other hand, it does not indicate a man who is learning and improving as a result of his past mistakes on his Stockton, CA home.
History of Tax Liens
The first tax lien problem in the public records actually pre-dates the approximately $150,000 in IRS liens.
The State of California filed a state tax lien on the Isquierdos in May 2009 for $17,783. This California State Tax lien just recently got cleared up on February 1, 2013, only two months before he was named the sole finalist candidate for the SAISD Superintendent position.
Did Isquirdo learn from the experience of the $17,783 state tax lien?
Not exactly, because his tax lien position worsened two years later.
Following the California State Tax lien of 2008, the IRS filed the following liens.
2/18/11: $107,056 – Federal Tax Lien
1/25/12: $45,618 – Federal Tax Lien
Look, I can’t tell from the public record exactly the source of the Federal Tax Lien, but I do know that this happens only over a long period of time after the IRS has gone to extraordinary lengths to collect past tax debts.
Delinquent taxpayers literally get years of notification before the IRS files this type of lien. Taxpayers who approach the IRS in a straightforward manner, with a payment plan or offer to make good on their debts do not get suddenly slapped with this type of Federal Tax lien.
At the time of the first filing, Isquierdo earned a $230,000 salary from the Sunnyside District in Tucson, later increased to $305,000 in September 2011. Instead of paying his Federal Tax Liens, he bought a $1.15 million home two months later with virtually no money down.
History of traffic and license violations. Is this also a learning opportunity?
I think it’s safe to say nobody begrudges anyone an occasional speeding ticket or parking violation. We learn from the painful $25 or even $100 fine, and we resolve in the future to park only in designated areas or to obey traffic speed indicators. No problem there. It’s a learning experience.
The problem, however, arises if we do not learn from our mistakes, avoiding future fines and violations. The public record on Manuel Isquierdo makes a mockery of his claim that he’s a man learning and improving from his mistakes.
One or two citations is human, fallible, and no big deal. Nine court citations in five years is weird, problematic, and gives lie to the ‘learning as he goes’ excuse.
From the public record:
- 1/24/08 – Lack of Registration, Guilty Plea, Oro Valley Municipal Court
- 7/7/08 – Resident with Out of State Plates, Guilty Plea, Marana Municipal Court
- 7/23/09 – Failure to stop at red light, Guilty plea, Phoenix Municipal Court
- 7/27/09 – Guilty plea, suspended plates, Tucson Municipal Court
- 8/7/09 – Failure to carry vehicle registration, Marana Muncipal Court.
- 10/21/09 – Non-Criminal Ordinance violation – Tucson Municipal Court
- 2/22/10 – 2 Traffic violations (including failure to obey signs) and one misdemeanor for driving with a suspended license. Tucson City Attorney dismissed these
- 7/8/11 – Speeding/Traffic violation, Forfeited bail. City of Eloy Justice Court,
- 11/26/12 – Unspecified non-criminal charge, Tucson Municipal Court
I’m tempted to speculate on what is going on here. Is he just laser-like focused on improving student outcomes – so little things like registrations, license plates, driver’s licenses, speed limits, and traffic laws don’t faze him?
Is there a part of him who enjoys petty brushes with the law, or the feeling of ‘getting away with something?’
Is he incapable of following all the minor bureaucratic rules that serve as mini-tyrants over all of our daily lives?
Concluding, scary thought: I don’t believe in coincidences
These public record histories of not-learning and not-improving directly contradict this candidate’s recent plea to the SAISD community.
I have to confess, however, this isn’t my biggest worry about Manuel Isquierdo’s candidacy and the SAISD board.
I haven’t addressed the investigation of Isquierdo for charging his school district credit card for $12,500 in improper expenses, or Isquierdo’s grand jury subpoena for his and his wife’s role, in marketing and selling a program called ‘Project Graduation,’ for which a school district superintendent was fired following an investigation. I haven’t studied the public records on those so I won’t comment, although I find them significant and troubling.
The selection of Manuel Isquierdo reflects terribly on the SAISD board.
At the end of the day, this process has reminded me that I don’t believe in coincidences.
Members of the SAISD board have stated that they knew this was a candidate with “some history,” or “baggage.”
Unfortunately my immediate thought was the following: A superintendent with a known history of financial distress and a record of desperate moves to correct it could be just the kind of guy that members of the SAISD Board could do business with.
If you see the board the way I do, it just doesn’t seem like a coincidence.
Please also see subsequent post: Recalling Isquierdo from the “Where Are They Now File” in August 2013
 or more, if you include his assistant-superintendent wife’s salary
 If it’s the last one, boy is he going to chafe at SAISD. Welcome to my 7 year-old daughter’s life at Bonham Academy!
Post read (7365) times.
Thanks for visiting Bankers Anonymous. Be sure to sign-up for my newsletter so you never miss what's happening on my site. You can also connect with me on Facebook and Twitter to keep the conversation going.