Wednesday, May 19, 2004

From AHRC STUNNING DEFEAT FOR CAI IN CALIFORNIA SENATE
Here's how the American Homeowners Research Center, an HOA owner-activist group, is billing the passage in the California Senate of SB 1682:

Community Association Institute(CAI)lawyers suffered a major blow today when the California Senate voted unanimously in favor of Senate Bill 1682. This bill prohibits the use of non-judicial foreclosure for unpaid assessments in homeowner associations for amounts less than $2,500. Homeowner advocates were both happy and cautious. They praised the skill and dedication of the bill's author, Senator Ducheny, in securing passage through the Senate. However, they cautioned that CAI will be waiting for the bill when it goes to the Assembly. CAI is already on a high state of alert, having sent a newsletter to all its members asking them to buttonhole their representatives...

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This has to be seen as a victory for the owners-rights activists, but we'll have to see how it fares in the Assembly. The impetus for this bill was the foreclosure on a retired Calaveras County couple last year over a lousy $120 in late assessments. I know it is bad manners to say, "I told you so," but...I told you so. Many times, and for over fifteen years, I have been telling the industry that unless they rein in the collections lawyers who abuse the foreclosure process, they will get hammered by state legislators. And it won't stop here. The press is ready, even eager, to publicize these incidents. When the fit hits the shan, it does no good to say that these are isolated incidents, and that most community association lawyers don't behave like this. That's true, but that defense won't work after it's on the front page, anymore than it is working for the Bush administration defending the Iraqi prisoner abuse scandal. No, I'm not equating them--foreclosure is legal, prisoner abuse is not (I do think losing your home might be worse than having panties put on your head, but I haven't experienced either so I can't say for sure). But if the President of the USA, and Leader of the Free World, can't get a scandal off the front page by saying it was only 7 soldiers out of 135,000 (which apparently is true), how can the industry successfully defend against these foreclosure incidents by saying, year after year, that people hardly ever really lose their homes (which is also true)? Here's the bottom line (no pun intended): there are enough real cases to keep the pot boiling, and once the cases are in the media, they are fodder for the state legislature, especially in an election year.

If the industry won't take these abusers to task, formally or informally--and everybody knows who they are--then what other course is there except to put legal limits on the foreclosure power? What else can you expect the state legislature to do? Somebody from the industry, please tell me where I'm wrong here. Because I don't see any other course open to them, once these cases hit the press and stay there. Are the people's elected representatives supposed to publicly condone having seniors kicked out of their paid-for homes onto the street for a couple of hundred dollars in late assessments?

This bill could light a fuse that could burn all the way from California to Florida. I'll be watching the Assembly action closely.





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