Wednesday, May 11, 2016

FHFA Vows to Keep Fighting HOA Super-Priority Liens - DSNews

FHFA Vows to Keep Fighting HOA Super-Priority Liens - DSNews

"The Federal Housing Finance Agency (FHFA) has reaffirmed its support of authorized servicer reliance on the Housing and Economic Recovery Act (HERA) of 2008 in foreclosures involving homeowner associations (HOAs) and super-priority liens, saying it will “aggressively” fight any HOA that tries to extinguish a Fannie Mae or Freddie Mac lien through foreclosure.

The super-priority lien issue has been a contentious one since it came to prominence following a decision by the Nevada State Supreme Court in September 2014 that allowed HOAs to use super-priority liens to foreclose on homes with delinquent HOA dues—without the permission of the mortgagee.

The FHFA responded in December 2014 with a warning to HOAs that loans with super-priority liens attached would not push mortgages backed by Fannie Mae and Freddie Mac into the secondary position. In June 2015, a federal judge in the U.S. District Court for the District of Nevada ruled that HOAs could not foreclose non-judicially on GSE-owned mortgages using a super-priority lien.

In August 2015, FHFA stated its support of authorized servicers of GSE loans that rely on the HERA to prevent HOAs from foreclosing on loans insured by Fannie Mae and Freddie Mac. The FHFA recently reiterated its position in support of the servicers."


 It will be interesting to see if the CID industry is able to prevail over opposition from the Masters of the Universe.  The banking industry and the GSEs have enormous political clout.

1 comment:

Tom Skiba said...

Of course they are....FHFA's mission is to protect the banks at all costs....oh wait, it's not???? You certainly can't tell from their actions.

Unfortunately, the banks and their servicers have dropped the ball over and over and until the NV Supreme Court decision there was no repercussion. Basically they just got unlimited do-overs. And if that cost communities and residents to maintain and service bank owned properties, that was just too bad.

So basically they want to overturn a century of property law and 3 decades of priority lien statutes (which have never resulted in unavailability of capital or higher financing rates) so that they can transfer the costs of their mistakes and mismanagement to the owners in communities who actually pay their assessments in a timely manner. Yes, another bailout for the big banks. Should anyone be surprised?