Sperlonga, Equifax to record HOA payments for credit scores | 2016-05-04 | HousingWire:
"Sperlonga will use its technology to automatically extract assessment payment data and account status every month for all HOA property owners, according to a release. It will then report the account data to Equifax.
"We believe this will have a major impact on the HOA industry," Sperlonga CEO Dan Berman said. "According to the Community Association Institute, associations along with property management companies collect approximately $70 billion in assessment payments each year and CAI estimated there were at least 333,000 community associations in the U.S.""
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Nobody knows how much HOAs and condo associations collect because government has washed its hands of any responsibility for this massive privatization of services and infrastructure. But in any event, now people who fall delinquent on their HOA assessments will have a problem with their credit rating.
2 comments:
So now HOA management companies won't just be threatening foreclosure in order to collect junk fees that go to the management company, they will be threatening the livelihood of owners. I predict a lot more lawsuits against the management companies and the HOAs. Maybe CFPB can adopt some rules to curb the unscrupulous business practices of these management companies. In addition, people will need to purchase HOA property via trusts, LLCs or some corporate form in order to protect against the business practices of the management companies.
When management company junk fees start costing homeowners credit ratings, jobs, the ability to borrow money or re-finance - I predict a lot more lawsuits against the management companies and HOAs. Given that the management companies invariably have indemnification provisions in their contracts to put the financial aspect of the management company's liability back onto their clients, hopefully this will mean the financial destruction of many HOAs. It won't happen at first because there will be insurance to cover the loss. HOAs will become uninsurable against that risk after which they won't be able to pay out on claims generated as a result of management company business practices. The other thing that could be a positive out of this is that the CFPB might start regulating HOAs, the junk fees, and eliminating arbitration "agreements"
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