As for the Leiders' former Brier Creek home, while the HOA foreclosed on them back in 2009, two years later the HOA still has the deed on it.
The HOA has now paid thousands on the home insuring it and maintaining it all while the home sits empty, because Bank of America still holds the mortgage on the home. The bank is still owed all the money from the mortgage and has a lien on the property preventing it from being sold until it's paid off.
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HOAs like the county tax collector foreclose when property levies go unpaid. But with properties heavily burdened with mortgage debt and difficult to liquidate in the current real estate market, HOA foreclosures don't necessarily result bringing accounts current and instead increase the liability side of the ledger.
4 comments:
"What's really driving this is the dynamics of these collection lawyers who are just out to generate fees and to sell these houses off as fast as they can."
-Evan McKenzie (some of you may have heard of him)
"Do Homeowners Associations Go Too Far?"
ABC 20/20
April 20, 2002 (nine years ago)
At least the lawyers are getting paid, even if the HOA corporation is being harmed by their actions. Because as regular readers of this blog know, HOAs are actually run by, and for the benefit of, HOA lawcusts *.
But HOA lawcusts are are the kind of corporatist lawyers that Walter Olson, Ted Frank, John Stossel, and other conservative/libertarian/AynRandian critics of parasitic attorneys can't be bothered to report about. It's not as though there's a shortage of material to draw from, so some other motive must be at work. Perhaps Shu Bartholomew can get them on her radio program to explain what that is.
* lawcust: a new word I just made up right now. If it enters popular usage, you saw it here first.
The primary beneficiaries of HOA foreclosures are the HOA management company and HOA attorney, period. The threat of foreclosure is used in an effort to extort more money from the homeowner.
This HOA has demonstrated the absurdity of the foreclosure. Instead of avoiding losses, the HOA has run head first into more obligations as a result of the action no doubt advised by its management company and HOA attorney. Why don't the news articles publish the names of the management company and the HOA attorney?
By adopting policies in which the HOA lawyers are paid first for disputed fees -- the "priority of payments" scam -- HOA boards are artificially inflating the delinquency rate on the corporation's balance sheet.
Delinquency rates allegedly lead to lower property values, make it more difficult to get loans, and other things that the HOA lobby claims justifies the need for more HOA power over homeowners. By artificially inflating delinquency rates, are HOA boards that adopt "priority of payment" scam policies failing to fulfill their fiduciary to the HOA corporation and its members, and instead acting in the interests of the HOA lawyers?
I don't mean from an ethical, moral, and objective point of view -- where the answer is obviously "yes" -- but from a legal perspective?
The above question inspired by this passage from "Remembering The Real Ayn Rand":
When Rand created the character of Wesley Mouch, it’s as though she was anticipating Barney Frank (D., Mass). Mouch is the economic czar in “Atlas Shrugged” whose every move weakens the economy, which in turn gives him the excuse to demand broader powers. Mr. Frank steered Fannie Mae and Freddie Mac to disaster with mandates for more lending to low-income borrowers. After Fannie and Freddie collapsed under the weight of their subprime mortgage books, Mr. Frank proclaimed last year: “The way to cure that is to give us more authority.” Mouch couldn’t have said it better himself.
Weakening their associations -- and more importantly, individual homeonwers -- and demanding more power to fix the problems they created sounds exactly like the behavior of most HOA corporations.
What happens when "homeowners shrug"? My money is on the AynRandians doing the same as they always do in disputes between individual American homeowners and HOA unions: throw the individual under the collective bus.
> HOAs like the county tax collector foreclose when property levies go unpaid.
Except that HOAs are much quicker to foreclose, because it is in the interests of the HOA attorneys to do so.
Jammie Wearing Fool has a blog post about "Eric Holder, Tax Deadbeat".
It appears that the U.S. Attorney General recently inherited his childhood home in Queens after his mother died last year.
Before her death, his "ailing mom, Miriam, was already behind on two quarterly tax bills when she succumbed to illness on Aug. 13, the charges went unpaid for more than a year -- growing to $4,146."
What is remarkable about this story is not that U.S. Attorney General Holder failed to pay a property tax bill on a house he inherited -- I have no idea if such a failure was intentional or an forgivable oversight -- but that the late interest charge was only $73.14.
Imagine if this had been a story about unpaid HOA dues (aka "assessments") instead of a property tax bill.
The late fees and attorney fees would have ballooned into thousands, if not tens of thousands, of dollars, and Miriam Holder's house would have been foreclosed upon as she lay on her death bed.
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