Saturday, June 02, 2012

Plea deals in HOA scheme reveal vast conspiracy - News -

Plea deals in HOA scheme reveal vast conspiracy - News -

"The players behind the brazen plan covered nearly every angle in their desire to swindle the unsuspecting associations out of millions of dollars in legal, construction and community management contracts, the agreements show.

Getting friendly straw buyers elected to association boards was crucial to the scheme because the conspirators needed votes to steer business their way."
The "players" were lawyers, contractors, property managers, real estate agents, straw voters, and whoever else they needed to completely subvert and take over the political structure of dozens of homeowner associations. So what? I'll tell you so what. Maybe it takes a big conspiracy to take over dozens of HOAs and run a multi-million dollar fraud, but it only takes a handful of people to take over one HOA and turn it into an ATM or a banana republic. Why? Because of the culture of non-participation and the pervasive sense of alienation and apathy in HOAs and condo associations; because there is practically no oversight of the actions of these boards; and because sooner or later, sleazy people figure out that HOAs and condo associations are like low-hanging fruit, full of sugar and ripe for the picking.  I suppose the message that emerges from the Las Vegas prosecution will be that the feds have taken down one of those "isolated cases." But the truth is that this is they have chopped off the tip of the iceberg.

More indictments could come in Vegas homeowner association fraud case

Federal judge taking pleas in Vegas homeowner association fraud case | Reno Gazette-Journal | A prosecutor told a federal judge in Las Vegas that more indictments may come after 14 defendants pleaded guilty in a sweeping federal investigation of Southern Nevada homeowner associations steering business to favored attorneys and businesses.

The assembly line-style proceedings Thursday in U.S. District Court in Las Vegas brought to 25 the number of people who have pleaded guilty since last year in an ongoing HOA fraud and corruption probe focusing on rigged elections that packed homeowner association boards with co-conspirators between 2003 and 2009.
When Phil "The Ghostbuster" Testa was alive and kicking about in Sin City more than a decade ago, the Brooklyn native alluded to NYC co-op boards being turned into ATMs for their vendors and drew parallels to what he saw happening in Vegas.

The HOA Crisis | HousingWire

The HOA Crisis | HousingWire: The reason for the assessments, the industry would discover, is that most of the foreclosures were on mortgages originated between 2005 and 2008. Stokes said most homes being built during that bubble came under an HOA or condo association. He looked at the numbers and estimates 60% of the national REO inventory has an HOA attached, based on the files he receives from clients. That number goes up in places like Nevada and Florida.
"One property," he says in bewilderment, referring to one in Las Vegas, "had six HOAs attached to it. It was part of an enormous development. It had two primary HOAs and four secondary ones."
A tale of caveat emptor when the tax man is the HOA.

FloriDUH | Sun Sentinel Blogs | Ex-deputy and cop accusd of bilking HOA for over $16,000

FloriDUH | Sun Sentinel Blogs | Ex-deputy and cop accusd of bilking HOA for over $16,000: Ex-deputy and cop accusd of bilking HOA for over $16,000

Friday, June 01, 2012

Rain barrels touted as simple solution to keep basements dry - Saskatchewan - CBC News

Rain barrels touted as simple solution to keep basements dry - Saskatchewan - CBC News

It won't fly in Privatopia, where it will raise fears that it will ruin the neighborhood.  Jed Clampett doesn't live here!

The housing bust as seen through the planned community

"It's just so... false in a way."

That's the take on Privatopia from photographer Amanda Dahlgren, interviewed today by Kai Ryssdal, host of American Public Media's Marketplace radio program.

Dahlgren was interviewed about her collection of photos designed to artistically portray continued residential real estate market distress in planned communities in the San Diego area -- with homes literally shown upside down.  PUD units appear to the photographer be constructed with planned obsolescence for a short life span, with new homes being built in the same development where just a few blocks away, others have fallen into foreclosure and disrepair. "They're sort of built to be disposable," Dahlgren tells Ryssdal.

You can read the entire interview transcript and view Dahlgren's photos by clicking here.

Fourteen more plead guilty in HOA fraud, corruption case - News -

Fourteen more plead guilty in HOA fraud, corruption case - News -
Thanks to Rodney Gray for this link. This makes 26 convictions so far, and the US Attorney is now going to seek grand jury indictments of as many as 12 more. There is one more indictment that is implied: the indictment of residential private government as an institution that is inadequately supervised and very fragile.

Wednesday, May 30, 2012

America's Most Innovative Neighborhood: 15 Square Miles In New Mexico, Population: 0 | Fast Company

America's Most Innovative Neighborhood: 15 Square Miles In New Mexico, Population: 0 | Fast Company
This summer, Pegasus Global Holdings will begin building a city from scratch in the desert just outside of Hobbs, New Mexico, that will look not unlike Hobbs itself. The Center for Innovation, Testing and Evaluation will be modeled on a mid-sized, mid-American town of about 35,000 people. Hobbs, located just outside the Texas border in the Southeastern corner of the state, is just a bit larger than that. The new city--CITE, as the locals and out-of-town developers call it--will similarly have a kind of downtown, a retail district, residential neighborhoods, and collar communities. It will have functioning roads, self-sustaining utilities, and its own communications infrastructure. It will not, however, have a single permanent resident.


Monday, May 28, 2012

Compiled statutes for Illinois common interest housing

mckenzie-law - 1 - JMLS course RE 617A
I compiled the main statutes that govern CIDs in Illinois in a single PDF file with an index. You can download it from my law wiki. The statutes include the Illinois Condominium Property Act, the Illinois Common Interest Community Associations Act, and the Illinois General Not for Profit Corporations Act of 1986.

HOA conspiracy pleas set for this week - News -

HOA conspiracy pleas set for this week - News -
Ten people have already entered guilty pleas. This week, an additional sixteen defendants are expected to plead guilty. They include three retired police officers.   All these sixteen are cooperating with the US Attorney as they prepare to indict up to twelve alleged higher-ups in the massive, multi-million dollar scam that involved taking over HOAs and condo associations through rigged elections and using control of the associations to award service contracts to fellow conspirators.  Lawyers and property managers were, of course, up to their eyeballs in the entire scheme.

This tip-of-the-iceberg case highlights the extreme vulnerability of community associations to financial scams. They are run by untrained, unsupervised, and largely unregulated volunteers who are elected out of an internal political culture of non-participation and apathy. What would you expect, if not fraud, self-dealing, and incompetence?

Sunday, May 27, 2012

BofA tries turning distressed homeowners into renters -

BofA tries turning distressed homeowners into renters -

Testing a mortgage-to-lease program in the Golden State, Bank of America Corp. sent 300 letters this week inviting borrowers without other options to apply. An additional 1,500 letters will go out in the next few weeks as BofA — which also is testing the program in three other states — evaluates whether a national rollout is feasible.

BofA plans to sell the homes to investors. It typically would recoup far less than what's owed but would come out far ahead compared with where it would be after evicting borrowers, making "cash for keys" payments to help them move and selling empty and often vandalized foreclosures in the troubled housing market.
This is what should have been happening since 2007, but in the millions instead of the hundreds, and mandated by law instead of some baby-step experiment by a too-big-to-fail bank that is insolvent anyway. Thanks to Fred Pilot for the link.

Death by Foreclosure | Occupy America

Death by Foreclosure | Occupy America
This is a link-filled article about the emotional toll of foreclosure and hard economic times.  Suicides, depression, anxiety, emergency room admissions, and general human misery. I have spent some time in foreclosure court recently, including volunteering to explain the process to rooms full of unrepresented people who are facing foreclosure.  As everybody knows, the number of foreclosure cases (nearly all mortgage foreclosures) has multiplied and shows no sign of leveling off--in fact, in many counties it is certain to increase for at least the next two or three years.  The stress on these people is enormous, but nobody in government seems to do more than pay lip service to that fact.  The Obama administration and the Democrats in Congress have been far more concerned about banks than people who are losing their homes. Across the nation, the much-ballyhooed mortgage robo-signing settlement is being gobbled up by states to balance their budgets:  "In Texas, $125 million went straight to the general fund. Missouri will use its $40 million to soften cuts to higher education. Indiana is spending more than half its allotment to pay energy bills for low-income families, while Virginia will use most of its $67 million to help revenue-starved local governments. Like California, some other states with outsize problems from the housing bust are spending the money for something other than homeowner relief. Georgia, where home prices are still falling, will use its $99 million to lure companies to the state."

I am wondering if this is part of a larger picture: a US population that is increasingly stressed-out, depressed, angry, and fearful.  We have developed a lifestyle in which most of the things we do involve automated and dehumanizing interfaces with large institutions.  These interfaces are frustrating and often intrusive, and involve little or no human interaction. Banking is increasingly online. Buying groceries? Scan and bag your own. Buy gas? Pump and pay yourself. Calling the doctor for a test result?  Wait half an hour to get through the voice mail system to a human being. And order your prescriptions online, please. On the job, support staff are being fired in droves and instead we are now doing everything ourselves using computer interfaces that were designed by computer geeks for computer geeks. I could go on, but everybody knows this.

Homeowner and condominium associations probably should be seen as part of this trend toward dehumanized social functions. We have replaced informal neighbor relationships and public local governments with a corporate institution that tends to be intrusive, expensive, impersonal, and often incredibly frustrating.