Friday, February 25, 2011

News Brief from California Center for Homeowner Association Law re foreclosure prevention workshop

This just came in from Marjorie Murray at the California Center for Homeowner Association Law:

Hi, Evan: Please post CCHAL’s NewsBrief on its foreclosure prevention workshop held Thursday at the University of California Riverside. We had a great turnout!

More than 60 homeowners, Legal Services and private bar attorneys, homeowners, housing counselors and federal officials from the U.S. Department of Housing and Urban Development (HUD) came to CCHAL's workshop “Protecting Homeowners from Association Debt Collectors and Foreclosure” on Thursday. Also in attendance was an attorney from one of the biggest association industry law firms in the state -- Fiore Racobs Powers.

The workshop focused on the nuts-and-bolts of the association lien: who records it and why. The association lien has now become an obstacle to homeowners attempting to get a loan modification on their first mortgage. Big lenders like Chase and Bank of America are telling homeowners that unless they get the assessment lien removed, they can’t even get in line to request a loan modification.

A key tool for getting the lien removed can be an affordable payment plan. But one HUD housing counselor reported that she couldn’t get the association lawyer to respond to her multiple requests for a payment plan, much less to give the homeowner an affordable one.

CCHAL routinely gets requests for one-on-one tutorials in the assessment lien from housing counselors and Legal Services attorneys working with HOA homeowners. The goal of Thursday’s workshop was to educate both homeowners and counselors as a group in strategies for removing the lien and/or negotiating an affordable payment plan.

Assessment liens are also an obstacle to short sales [Keyword: SHORT SALES on the CCHAL website.]

What few people understand – whether homeowners or counselors – is that the assessment lien may come to haunt the owner even if the bank forecloses. Workshop trainer Attorney Dan Mulligan explained that, if left unpaid, the assessment debt becomes a personal debt of the homeowner long after the home has been lost.

CCHAL sent a NewsBrief recently about the homeowner sued by Angius & Terry Collections for $11,000 in assessments and collection costs on a home she lost to foreclosure two years ago. The bulk of the figure is actually collection costs – not assessments due the association.

Association debt collectors routinely levy collection costs that are 5-10 times the amount of the assessments owed. There are no statutory caps on collection costs and assessment debt collectors are not regulated.

We hope that the attorney from Fiore Racobs Powers brings this message back to the HOA industry as a whole: its collection practices are injuring homeowners and creating more obstacles to economic recovery. If they themselves don’t reform their business practices, then somebody else might do it for them.

The workshop was held at the University of California Riverside Extension Center. We will soon be posting photos from the workshop on the CCHAL website: in the photo gallery.

CCHAL foreclosure defense workshops are made possible through the support of the California Attorney General's office.

CCHAL NewsBrief
February 20, 2011

1 comment:

Anonymous said...

This is precisely what the "HOA industry as a whole" is largely about. The most active members of CAI are the HOA management companies and HOA attorneys. The organization actually has adopted "Public Policies" opposing the application of the Fair Debt Collection Practices Act to HOAs (really they oppose the application of the FDCPA to the management companies). Management companies in many states spend considerable effort in i) attempting to create "fining policies" which enable the management company to create a debt out of thin air; and ii) to entangle this "debt" with assessments in order to pyramid junk collection fees onto the homeowners account. The ONLY entities profiting from this conduct are the management companies and HOA attorneys - NOT their purported client (the HOA) or its involuntary member (the homeowner)