WSOCTV.com - Action 9 - Action 9: Woman Paid HOA Dues, But They Still Wanted Legal Fees
Yet another story of a homeowner treated like so much garbage by her HOA and the HOA's attorney. According to the story (I have no independent knowledge of what happened), this owner wasn't delinquent and had the receipts to prove it, but the association's lawyer threatened to foreclose if the owner didn't pay the lawyer's fees for the bogus collection effort. Enter the TV station:
CHARLOTTE, N.C. -- Betty Belk said she paid her homeowner's dues on time, but through a clerical mistake, the homeowner's association still wanted to collect on legal fees...Attorneys do have the right to recover fees incurred in the collection of delinquent homeowners dues. But if Belk's dues were never late, then how could the attorney, in this case Victoria Sprouse, still collect her fees? "I said, 'I don't think that's right.' She said, 'You got to pay that or I'll foreclose on your house,'" said Belk. "That's when I got in touch with you." Action 9 contacted attorney Victoria Sprouse. She promised she would talk about what happened but never did.The homeowner's association's management company, Carolina Management Association also wouldn't talk to Action 9. Pat Patterson of Carolina Management told Belk she didn't have to pay the attorney fees.
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According to the community association industry, things like this never happen. Sure--maybe there's another side to this. With the association's attorney not speaking to the press I don't know. But when will the Community Associations Institute take a meaningful stand against apparent collections and foreclosure abuse by associations and their attorneys? All I hear are platitudes about how foreclosure should be a last resort and denials that there is a problem. Every case is an "isolated instance." How about some action, such a as a CAI attorney providing pro bono legal assistance to people like Betty Belk so the case can be fully and fairly presented on both sides? Owners can't even get representation because (a) they can't afford it, and (b) even if they could nearly all HOA specialists only represent associations. CAI could remedy this, and they should. And if they don't, legislatures will do something about it, and I think HOA lawyers won't like the outcome of that process.
3 comments:
As you know, CAI is a business league — specifically, a trade association that represents for-profit firms.
Axiomatically speaking, the goal for-profit firms have is to maximize profit.
Since CAI represents for-profit HOA service vendors (Privatopia, 121), "CAI" just understands:
Revenues - Expenses = Net Income
CAI will not comprehend what it "should" do, in the way that a person — that has some social consciousness — might.
You ask, "when will the Community Associations Institute take a meaningful stand against apparent collections and foreclosure abuse by associations and their attorneys?"
Logic suggests that it will only do so, if CAI determines that it can, in a way that increases the aggregate profit of the service vendors it represents — or, at least, minimize the negative impact on that profit.
In the absence of such a mathematical determination, CAI will continue with what works for it: if you lie to Joe Average — if Joe doesn’t know any better — he will buy it (and maybe even spread it around).
CAI’s "platitudes about how foreclosure should be a last resort and denials that there is a problem," will continue.
So far, CAI’s been very effective in keeping legislators and governators from doing anything meaningful about this.
"Since it is CAI's public policy to facilitate, support, encourage, coerce, bribe .... states" (Lynn Jordan, CAISLA, 7/6/00) — and since whatever legislation CAI needs to get the bad press minimized will be perceived by HOA reformers and the public as an improvement — CAI will get the legislation it wants.
Then HOA home 'owner' reformers will claim credit for success, and CAI’s members will keep their ability to sell foreclosure services, unencumbered by the consequences of so much bad press...
... even though HOAs will remain viewed by the law as businesses (Privatopia, 21), that have no security interest in the properties they foreclose on.
This fine, lien, foreclose fiasco demonstrates, once again, CAI's out-to-lunch, out-of-touch vulture culture. A year ago, Fannie Mae reached a milestone in loss mitigating more homes than were foreclosed on. Now, HUD has turned up the heat:
HUD raises fines for lenders who neglect troubled borrowers
The Department of Housing and Urban Development on Tuesday published a final rule that dramatically increases the amount of damages HUD can seek against FHA lenders that fail to engage in loss mitigation techniques. Loss mitigation options enable many homeowners who are in default on their FHA mortgage to avoid foreclosure and remain in their homes.
[...]
Currently, the maximum penalty that can be imposed on lenders is $6,500 for each violation, up to a limit of $1.25 million for all violations committed during any one-year period. This new penalty provides for additional damages of three times the amount of any FHA mortgage insurance benefit claimed by a lender and is not subject to the current limitations.
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