The Privatopia Papers

Homeownership ratesfalls to 66% as downturn nears a bottom – USATODAY.com

2012-02-01T08:47:00.000-06:00

Homeownership ratesfalls to 66% as downturn nears a bottom – USATODAY.com
Falling homeownership — and prices — reflect the worst housing downturn since the Great Depression. And while there are signs that the housing industry's downturn may at least be nearing a bottom, the impact of the collapse will be evident for years to come, economists say.
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"Nearing a bottom," they say. Maybe not. Mortgage interest rates are absurdly low and they have to go up to at least 6% at some point. When that happens, people will find it harder to buy houses because the cost of money will raise their monthly payments. When money is cheap, demand goes up and that drives prices up. When money is expensive, demand goes down and that drives prices...down. So I think that when mortgage interest rates go up, as they must, housing prices will go down.

And that will increase the financial pressure on home owners, who will see more of their equity disappear. That, in turn, will raise foreclosure rates, which will mean increased economic stress on condo associations and HOAs.

Freddie Mac Bets Against American Homeowners - ProPublica

2012-01-30T10:15:00.000-06:00

Freddie Mac Bets Against American Homeowners - ProPublica

"Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates.

Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages."

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Gee. I wonder if there could be a connection between Freddie making it hard to refinance at lower rates, and Freddie selling mortgages and keeping only the income stream from the interest income?

Blog.AnthemVOICE.Org — Defending HOMEOWNER Rights in Sun City Anthem, Henderson, NV

2012-01-28T17:48:00.000-06:00

Blog.AnthemVOICE.Org — Defending HOMEOWNER Rights in Sun City Anthem, Henderson, NV
A new homeowner rights weblog. Thanks to Free Pilot for letting me know about it.

PleasantonWeekly.com : New HOA laws impact homeowners

2012-01-28T14:24:00.000-06:00

PleasantonWeekly.com : New HOA laws impact homeowners
From rental restrictions to electric vehicles and electronic meeting notices, Californians living in homeowners associations are seeing several new laws governing their communities that took effect Jan. 1.

The California Association of Community Managers reports that one out of every three Californians lives in a homeowners association.

One of the most significant of the new laws was state Senate Bill 150, which prohibits associations from restricting owners' abilities to rent their properties unless a rental restriction was in place before the owner purchased the property. This section of the bill applies to a governing document provision that becomes effective on or after Jan. 1, 2012. The law requires owners to provide a statement describing any applicable rental restriction to potential buyers.
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Thanks to Fred Pilot for the link to this summary of the new HOA/condo laws. There are quite a few this year.

World's Worst Dad Candidate Thought It Was A Good Idea To Leave Son Behind In Foreclosed House - The Consumerist

2012-01-27T11:04:00.000-06:00

World's Worst Dad Candidate Thought It Was A Good Idea To Leave Son Behind In Foreclosed House - The Consumerist

Parenting doesn't get any worse than this. Leave the 11 year old son a Playstation and a note that says "You know your dad loves you more than anything." Right. And then the cops spend five weeks looking for him. Thanks to Mystery Reader for this depressing saga.

BBC News - Unwanted homes in Irish Republic could be demolished

2012-01-27T07:24:00.000-06:00

BBC News - Unwanted homes in Irish Republic could be demolished

They have been called the 'ghost estates' of the Irish Republic - about 300,000 homes built in the frenzy of the property boom that no-one wants to live in now.

Soon, many brand new houses could be demolished.

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Watch this video and see how the Irish were fleeced by developers and realtors.

Woman claims condo energy efficient windows are melting her car

2012-01-26T09:17:00.001-06:00

http://losangeles.cbslocal.com/2012/01/25/woman-claims-neighbors-energy-efficient-windows-are-melting-her-toyota-prius/

STUDIO CITY (CBS) — A SoCal woman says the energy efficient window installed in a neighbor’s condominium is melting the plastic components on cars parked in her carport.
Heather Patron of Studio City was dealing with a mystery regarding her Toyota Prius.
“The side view mirrors were melting,” says Patron. “Anything that was plastic on the car was melting.”

Legislation would let insured pet owners keep dogs off leash

2012-01-26T08:44:00.002-06:00

Legislation crafted by Sen. Lori Klein, R-Anthem, would say that county ordinances which now require dogs in public parks and on public lands to be on a leash do not apply if the owner has at least $50,000 worth of liability coverage. Klein said there is no reason that owners of responsible, well-behaved dogs should not be allowed to let them run free.

But Klein is specifically annoyed by leash law rules of homeowner associations. And she said her legislation, SB 1065, would preclude HOAs from citing homeowners under rules that forbid a dog from sitting, unleashed, in an unfenced front yard.
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Alternative headline: State legislation would preempt Privatopian pooch on porch prohibition.

Government Prevents 101-Year-Old Evictee From Moving Back Home - The Consumerist

2012-01-23T14:23:00.000-06:00

Government Prevents 101-Year-Old Evictee From Moving Back Home - The Consumerist
Four months ago, a 101-year-old Detroit woman was evicted from her home because her son could no longer afford payments. The U.S. Department of Housing and Urban Development stepped in and said she go back home, but has now reversed course, deeming the residence unfit to live in.

She tells The Detroit News "Here I am, 100 years old (rounding her age), and don't have a home. Oh Lord, help me."

Now that the HUD controls the property, officials say the house is beyond repair and the department won't pay the cost to get it up to code. The department is looking for alternatives, but for now the woman has no permanent home as she crashes with a friend.

She lived in the house for nearly 60 years, but lost control when she entered into a reverse mortgage. Her sad plight serves as a warning sign for retirees who think a reverse mortgage may be an easy fix to their financial problems.
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Here's the original article from the Detroit News.

Mortgage Principal Cuts Don’t Help Homeowners - Bloomberg

2012-01-23T08:05:00.000-06:00

Mortgage Principal Cuts Don’t Help Homeowners - Bloomberg
Reducing mortgage balances is a risky idea that hasn’t been shown to keep borrowers who owe more than their property’s worth in their homes, according to Credit Suisse Group AG. (CSGN)

Of the 11 million of “underwater” homeowners, about 6.5 million have never missed a payment and 2 million more are making on-time payments after a delinquency, said Dale Westhoff, the bank’s global head of structured products research. Widespread principal reductions may drive defaults “much, much higher” as borrowers seek the aid, he said.
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And of course the banking industry would have a totally objective view of this idea...

Bank By Bank, Here Are Wall Street's Favorite Politicians

2012-01-22T18:04:00.000-06:00

Bank By Bank, Here Are Wall Street's Favorite Politicians

FHA lending rules: Condo buildings - chicagotribune.com

2012-01-22T17:16:00.000-06:00

FHA lending rules: Condo buildings - chicagotribune.com
Since Feb. 1, 2010, condo buyers haven't been able to secure unit-by-unit "spot" approval for FHA-backed mortgages if an entire building was not certified. Instead, the federal government set criteria to determine the financial viability of an entire building before deeming the project as FHA-approved, even if it had previously been certified. An approval lasts two years.

The number of rejected buildings is adding up, due to bad paperwork and bad balance sheets as an increasing number of condo associations struggle with rentals, short sales and foreclosures. It is jeopardizing the plans of condo sellers who rely on the FHA's stamp of approval as a marketing tool and condo buyers who either want or need an FHA-approved building.
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This is a huge problem not just with FHA loans but with Fannie Mae certification, which is also building by building.

Van Jones: Obama Must Choose on Housing: A Sweetheart Deal for the 1% or a Fair Deal for the 99%

2012-01-22T13:31:00.000-06:00

Van Jones: Obama Must Choose on Housing: A Sweetheart Deal for the 1% or a Fair Deal for the 99%
Rumor has it that on Monday, after months of negotiation with big banks, the White House may announce a settlement that would let the banks off the hook for their role in the foreclosure crisis -- paying a tiny fraction of what's needed in exchange for blanket immunity from future lawsuits.

We hope these rumors are untrue.

President Obama has the ability to stop and change the direction of this sweetheart deal. He should reject any deal that benefits the one percent and lets the big banks get away with their crimes. Instead, the president should stand with the 99 percent and push for real accountability and a solution that will help millions of people in this country.
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From Van Jones, who was Obama's Green Jobs Czar until the right wingers went after him on AM radio and Fox News.

Florida governor turns his attention to special taxing districts

2012-01-22T11:25:00.003-06:00

It's difficult to tell what kind of impact, if any, the review and staff's recommendations will have on community development districts. However, Scott likely won't dismantle the districts, which by state law are designed to help developers defray the cost of infrastructure and other services. These agencies can issue bonds, dividing the cost among property owners. In other words, they're contracts between the developers and property owners.
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Here we go again with local government being incorrectly equated with a contractual arrangement. It is not and moreover lacks the necessary elements of a legal contract regardless of whether the framework is a private nonprofit corporation as is the case with mandatory membership homeowner associations or a public entity such as a special district.

Homeowners association pursues extreme option — foreclosure — against Korean War veteran

2012-01-22T09:03:00.002-06:00

A measly $338.91.

That's how much Sherman McCray owed his homeowner association when the board of directors foreclosed on his Clermont house.

Of course, the debt wasn't just $338.91 by the time a Lake County judge on Jan. 3 ordered the 81-year-old Korean War veteran's home sold.

Oh, no. Between 2010 when McCray failed to pay a homeowners assessment and that final hearing, the all-powerful homeowner association in the Vistas subdivision had levied late fees, costs and interest, and it had busied itself running up absurd lawyer bills by sending threatening letters at every turn.

Total cost now: $4,272.24.
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The commentary describes this as yet another sickening tale of diabolical, petty homeowner associations in South Florida and asks why the HOA would exercise a punitive option against an elderly disabled veteran obviously overwhelmed by health troubles and without a thorough understanding of the rules. McCray clearly needs an advocate to help him navigate the dangerous legal minefield that's Privatopia.

U.S. AG Eric Holder, DoJ Head Lanny Breuer Linked To Banks Accused Of Foreclosure Fraud

2012-01-20T14:19:00.000-06:00

U.S. AG Eric Holder, DoJ Head Lanny Breuer Linked To Banks Accused Of Foreclosure Fraud
In recent weeks the Justice Department has come under renewed pressure from members of Congress, state and local officials and homeowners' lawyers to open a wide-ranging criminal investigation of mortgage servicers, the biggest of which have been Covington clients. So far Justice officials haven't responded publicly to any of the requests.

While Holder and Breuer were partners at Covington, the firm's clients included the four largest U.S. banks - Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co - as well as at least one other bank that is among the 10 largest mortgage servicers.
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Why won't the DOJ prosecute the big banks for their blatant mortgage fraud? This might explain it. But at the very least they should recuse themselves and appoint a special prosecutor to handle the investigation.

Credit Card Arbitration Trumps Lawsuits, Court Says : NPR

2012-01-20T09:48:00.000-06:00

Credit Card Arbitration Trumps Lawsuits, Court Says : NPR
Consumers who sign credit card agreements that feature an arbitration clause cannot dispute fees or charges in court, the Supreme Court ruled Tuesday. The 8-to-1 decision drew immediate fire from consumer advocates.

To get a credit card, a consumer generally must sign a detailed agreement. In the fine print, almost always, is an arbitration clause that says that if consumers want to dispute fees, they must do so through arbitration, not in court.

A 1996 federal law allowed consumers to take their disputes to court. But in its ruling Tuesday, the Supreme Court said arbitration clauses in those agreements trump that law.
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Your Supreme Court at work protecting consumers the way the usually do. Which is, not. Thanks to Beanie Adolph for this link. The full opinion is here.

Residents Take On George Lucas Over Marin Construction Plans « CBS San Francisco

2012-01-20T06:52:00.000-06:00

Residents Take On George Lucas Over Marin Construction Plans « CBS San Francisco
SAN RAFAEL (KCBS / CBS 5) – The long-delayed plans of filmmaker George Lucas to build a movie production studio on the old Grady Ranch has stirred opposition among residents of a quiet bedroom community in Marin County.

The state-of-the-art facility would bring an outdoor soundstage and underground parking for 250 cars to an area residents said is zoned for single-family and multi-family residences.
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The NIMBY Strikes Back!

Boy’s family wins suit to add awning

2012-01-19T22:50:00.001-06:00

PITTSBURGH - The parents of a Pittsburgh boy who has health aversions to sunlight can add a retractable awning to the front of their home in settling a federal lawsuit against their neighborhood homeowner's association.

The association will also pay about $42,000 in legal costs and $10,000 in damages.
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What a great use of the courts. Not.

One million homeowners may get mortgage writedowns: U.S. - Yahoo! News

2012-01-18T20:24:00.000-06:00

One million homeowners may get mortgage writedowns: U.S. - Yahoo! News
About one million American homeowners would get writedowns in the size of their mortgages under a proposed deal with banks over shady foreclosure practices, Housing and Urban Development Secretary Shaun Donovan said on Wednesday.

The deal, which could be struck within weeks, would mark the largest cut in the mortgage load since the start of the credit crisis in 2007 and could pressure the government-sponsored mortgage agencies to also reduce principal on underwater home loans.
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With the election closing in and with even the Fed saying that something has to be done for homeowners, the Obama Administration finally inches onto the thin ice of large-scale principal reduction. Now if we could just make some headway on turning underwater owners into renters we might have the start of a real housing policy.

Home builder sentiment continues to slowly improve | The Big Picture

2012-01-18T13:30:00.000-06:00

Home builder sentiment continues to slowly improve | The Big Picture
"Homebuilder sentiment continued to improve in Jan, rising to 25 from 21, above expectations of 22 and it’s the best since June ’07. Present conditions rose 3 pts to 25 and the Future outlook was up 3 pts to 29. Prospective Buyers Traffic also gained 3 pts to 21. The NAHB chief economist said “builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve in a growing number of markets, and this has helped to move the confidence gauge up from near historic lows…That said, caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market.”
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From Barry Ritholtz' blog. We will see how this pans out in the year to come. With European sovereign debt/Euro issues, possible war with Iran, and a slowdown in China all looking like major question marks I would be reluctant to predict how the economy will fare this year. And there is the dead weight of negative home equity and foreclosures hanging over the housing market and the economy.

Vacant properties blog series will examine solutions to growing regional, national housing challenge

2012-01-18T12:00:00.000-06:00

Vacant properties blog series will examine solutions to growing regional, national housing challenge
On Feb. 12, Cook County's vacant building ordinance takes effect, intended to help communities get a handle on both the sheer numbers and conditions of vacant properties in their borders. The ordinance requires owners of vacant properties to list a building as vacant on the county registry (if the community where the property is located is unincorporated) or on a municipal registry (if the municipality where the property is located chooses to partner with the county). The ordinance also requires all owners of vacant properties (whether the original mortgagees or new owners) to take responsibility for maintaining that property (mortgagees within 60 days of a mortgage default; new owners within 30 days of vacancy or after assuming ownership). Cook’s ordinance is very similar to an ordinance the Chicago City Council adopted in November 2011. That ordinance is now the target of a lawsuit, filed by the Federal Housing Finance Agency (FHFA), claiming Chicago’s rules encroach on FHFA’s role as the sole regulator and supervisor of Fannie Mae and Freddie Mac, which own about 258,000 mortgages within the city. FHFA is seeking an exemption for those mortgages; Chicago has vowed to take it to the courts.
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According to the Woodstock Institute, nearly one in ten residential buildings in Cook County is VACANT.

District judge to weigh in on family's HOA fight

2012-01-17T22:24:00.001-06:00

According to an email from the HOA, construction was approved and permits were issued by the City of Round Rock. Then, the HOA issued a complaint to halt construction.

In fact, the HOA filed a lawsuit demanding work on the shed be stopped. The Pattons counter-sued, stating the HOA suit is without merit. Both the HOA's attorney and an HOA representative YNN reached over the phone refused to comment on the case.

The Patton's attorney, Derek Davis, said the entire process is a waste of time and money.

"It is, in my experience, one of the most frivolous lawsuits that I have ever dealt with," he said.
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Welcome to Privatopia, where frivolous litigation such as this abounds.

Report: Troyer acted alone in anonymous emails | News-Gazette.com

2012-01-16T11:27:00.000-06:00

Report: Troyer acted alone in anonymous emails | News-Gazette.com
If you want to see the problem with anonymous emails, read this. I teach at the University of Illinois at Chicago, one of three U of I campuses. The current president of the system, Michael Hogan, has a right hand henchperson named Lisa Troyer who has been with him for all three of his last jobs. He is trying to centralize admissions for all three campuses, which has produced a lot of faculty opposition. There was a faculty Senate committee discussing it on an email list. One of the members was spying for Troyer and feeding her confidential information (using a gmail pseudonymous account) that she was passing on to Hogan. But then Troyer (according to a detailed investigation) created her own fake id and started sending phony comments to the Senate committee members, claiming that she was a Senator who agreed with Hogan and was being intimidated. A computer science prof figured out what she had done, after which the whole stupid ploy melted down. Now she has lost her chief of staff job.

But the point is that people use fake identities on the web for all sorts of reasons, some good and some bad.

Former homeowners' association treasurer pleads guilty to embezzlement charges - theoaklandpress.com

2012-01-16T11:12:00.000-06:00

Former homeowners' association treasurer pleads guilty to embezzlement charges - theoaklandpress.com
A former treasurer of a homeowners’ association has pleaded guilty to an embezzlement charge.

Kevin Douglas Harris, who is accused of using some of the embezzled money to buy golf equipment, will be sentenced next month.
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Got this from a weblog by Ward Lucas, who has a new book coming out called Neighbors at War: The Creepy Case Against Your Homeowner Association. That book link didn't go anywhere for me, but it may be an "under construction" page that you can check out soon.

Thanks to Fred Pilot for the link to Lucas' blog.

OJ Simpson 'loses Miami bungalow to foreclosure' | Mail Online

2012-01-16T08:59:00.000-06:00

OJ Simpson 'loses Miami bungalow to foreclosure' | Mail Online
Former actor and American football player OJ Simpson is losing his house, after late fees, penalties, and overdue principal built up.

But, according to court records, the bank’s process server tried to deliver the foreclosure notice at Simpson’s Miami home.

Simpson, 64, has been imprisoned in a Nevada jail since 2008.

Read more: http://www.dailymail.co.uk/news/article-2087178/OJ-Simpson-loses-Miami-bungalow-foreclosure.html#ixzz1jdL3Yfmb

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Nice example of the due diligence these mortgage companies bother to do when they foreclose.

NYT: Mitt Romney Offers Praise for donor's business--for-profit college

2012-01-15T10:52:00.000-06:00

NYT: Mitt Romney Offers Praise for donor's business: for-profit college
WASHINGTON - At a town-hall-style meeting in New Hampshire last month, listeners pressed Mitt Romney on the soaring cost of higher education. His solution: students should consider for-profit colleges like the little-known Full Sail University in Florida. A week later in Iowa, Mr. Romney offered another unsolicited endorsement for "a place in Florida called Full Sail University." By increasing competition, for-profit institutions like Full Sail, which focuses on the entertainment field, "hold down the cost of education" and help students get jobs without saddling them with excessive debt, he said. Mr. Romney did not mention the cost of tuition at Full Sail, which runs more than $80,000, for example, for a 21-month program in "video game art." Nor did he mention its spotty graduation rate. Or, for that matter, that its chief executive, Bill Heavener, is a major campaign donor and a co-chairman of his state fund-raising team in Florida.
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Sure--great place to get a real education...in how not to spend your time and money.

Florida Senate pushes to privatize prisons in 18 counties | The Raw Story

2012-01-15T10:50:00.000-06:00

Florida Senate pushes to privatize prisons in 18 counties | The Raw Story
The Florida Senate Rules Committee has proposed a bill that would require the state’s Department of Corrections to privatize all prisons and other correctional facilities in 18 counties, according to the News Service of Florida.

The state legislature passed nearly the same measure last year, but the law was ruled unconstitutional in court because it didn’t go through the committee process, violating the Florida Constitution.

The second largest private prison company in the world, GEO Group, has donated $822,000 to political campaigns in Florida, according to the nonpartisan National Institute on Money in Politics. The company also spent $25,000 for Florida Gov. Rick Scott’s (R) inauguration party.
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When the record of this whole Reagan-era privatization racket is finally written, maybe a decade or two from now, I think the focus will not be on efficiency, but on corruption.

Therapy Dog Federal Case | Co-op Board | Habitat Magazine

2012-01-15T10:36:00.000-06:00

Therapy Dog Federal Case | Co-op Board | Habitat Magazine
Heartless or clueless? The board of a no-pet seniors co-op on Long Island unleashed the hounds on a frail old woman who owned what her doctors called a therapy dog. Now, after the dog's removal and the woman's death, the situation has become literally a federal case about discrimination against the disabled.
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Thanks to Pamela McKuen for this link.

Photographs Of Abandoned America Show Civic Problems, Engagement (PHOTOS)

2012-01-15T07:07:00.000-06:00

Photographs Of Abandoned America Show Civic Problems, Engagement (PHOTOS)
From demographic shifts to federal government policies to alternating trends in retail sales, each photograph offers an example of one of the many conditions or causes of dereliction in the United States.
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This scholar chose urban neighborhoods in old industrial cities (with one exception from Las Vegas) for his photos. It would be possible to do a similar slide show with vacant condos and suburban subdivisions.

Fraudclosure Errors Destroying Americans’ Property Rights | The Big Picture

2012-01-14T11:57:00.000-06:00

Fraudclosure Errors Destroying Americans’ Property Rights | The Big Picture
Barry Ritholtz, author of Bailout Nation, says:
"Over the past 2 years, I have warned repeatedly about the dangers to American property rights caused by massive bank fraud, A deadly combination of MERS, robo-signing, and illegal shortcuts have created a horrific situation. A bedrock of our society — the ability for the owner of a piece of real estate to confidently convey that property, along with all associated property rights — is now in danger."

Occupy the Neighborhood: How Counties Can Use Land Banks and Eminent Domain | Truthout

2012-01-14T11:55:00.000-06:00

Occupy the Neighborhood: How Counties Can Use Land Banks and Eminent Domain | Truthout
This includes some interesting recent cases where judges have refused to allow mortgage foreclosure, even where the owner didn't answer the complaint, because the mortgage servicer can't prove they own the note.

South Carolina Woman Jailed For Having Messy Yard

2012-01-12T12:20:00.000-06:00

MOUNT PLEASANT, S.C. (AP) — A Mount Pleasant woman is serving 10 days in jail after failing to pay a $480 fine for having a messy yard.

The Post and Courier of Charleston reports 53-year-old Linda Ruggles has sold blood and even volunteered for medical experiments to get money to keep her home from foreclosure.
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There have been a number of new "debtors' prison" stories where people went into debt, were ordered by a court to make payments, and then were jailed for contempt for not doing so. Here she didn't pay a fine. But given that the entire situation for which she was fined resulted from her having NO MONEY, it seems fairly inevitable that she would end up in jail for not paying the fine--if this is the way we are going to do things...

Cool Tools: Tiny Homes

2012-01-11T11:50:00.000-06:00

Cool Tools: Tiny Homes
Tiny houses are the norm for most people in the world, but have been out of fashion in the US for many decades. Recently some Americans are rediscovering the joys of very tiny homes for several reasons: hard economic times, a reaction against modern excess, and a realization that a digital world does not require a lot of space. There are now a handful of blogs and a whole shelfful of books about tiny homes. Mostly good stuff.

Anonymous posts with instructions??

2012-01-09T07:24:00.000-06:00

If you choose to post comments anonymously, there is no way I can follow your anonymous instructions to go back and do something with a previous anonymous comment that you now want to change, because when you posted it anonymously the first time you put it in the wrong place or something of that sort.

I am thinking about requiring registration because so many people comment anonymously that it hinders communication. Often people will write, "As I said previously..." and nobody has the slightest idea what they are talking about because the previous post and the current one are anonymous. The conversations would be a lot more interesting if people knew whose comments they were reading and commenting on.

Silver Lakes Association eyes rental restrictions

2012-01-08T21:44:00.006-06:00

Across California, there seems to be an emerging trend of homeowners associations increasingly eyeing rental restrictions in the lingering wake of the housing bust, said Richard Monson, president of the California Association of Home owners Associations. But he added it still seems to be a relatively small number of the state’s roughly 47,000 HOAs representing over 4.8 million homes.

“Because there are many more foreclosures and short sales, the buyers of these units are more likely to be investors than for owner-occupancy,” Monson said. “That’s a greater number of renters.”
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The residential real estate correction is having a big impact on Privatopia as this blog has detailed over the past four years. This is one of them. As more absentee investor owners purchase dwellings in HOAs, the question becomes are they homeowner associations or property owner associations? HOA rental restrictions are designed to keep the "home" in HOAs. But HOAs cannot control housing market forces. If the market prefers investor owned rental properties, failing to accommodate that preference could lower the value of properties within HOAs that restrict rentals since it would limit their marketability.

Calls for US taxpayers to bear housing costs - FT.com

2012-01-08T19:22:00.000-06:00

Calls for US taxpayers to bear housing costs - FT.com
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/a304e636-3a2d-11e1-a8dc-00144feabdc0.html#ixzz1iv3rp4qS

US Federal Reserve policymakers are increasingly urging fiscal authorities to consider reducing distressed borrowers’ loan balances, a politically fraught position for a central bank that has long sought to distance itself from fiscal policy.
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Principal reduction should have been done three years ago, but I think the banks should just write it down rather than have the taxpayers take the hit. The financial parasites who crashed the economy, and who then were bailed out by the taxpayers and the Fed, have had a free ride to date. The economy will never recover until the middle class gets some relief from the burden of debt--mortgages, student loans, credit cards--that is the substitute for lost wages. The article says this would be politically unpopular, but I am not so sure about that.

Vacant condos ripe for accessible, affordable housing - chicagotribune.com

2012-01-08T09:31:00.000-06:00

Vacant condos ripe for accessible, affordable housing - chicagotribune.com
Two local organizations, IFF and Access Living, are in the early stages of developing a new model of affordable housing, first in Chicago and then throughout Illinois, for people with disabilities who want to live on their own.

Armed with a budget of slightly more than $19 million, the Home First Illinois program also will take a crack at filling up some of the city's empty condominiums. That's because the program revolves around the idea of placing people with disabilities in scattered-site housing rather than grouped together in state-funded or private institutions.

"It's a new model for affordable housing," said Michelle Hoereth, director of housing for IFF, a nonprofit lender and real estate consultant that helps nonprofit organizations in the Midwest. "We can purchase condos that are foreclosed, in a short sale or the owner just wants to sell. There are plenty of units that aren't distressed but are vacant."
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The money comes from the state, Chase bank, and the Chicago Community Trust. The owner of these units will be IFF, and will rent the units to the tenants. IFF will be checking the condo association finances carefully, they say: "You don't want to buy into a financial mess," Giornalista said. "At the end of the day, I think condo associations should welcome our purchases because now they're going to have an institutional investor in their building. It means their assessments are going to be paid on time."

What I don't see in this article is the issue of ADA accommodations for these disabled tenants. Renovation of the individual unit would be up to IFF, but what if there are accommodations needed in the common areas? Who pays for that?

Occupy Las Vegas protesters target foreclosed homes in valley - News - ReviewJournal.com

2012-01-08T08:14:00.001-06:00

Occupy Las Vegas protesters target foreclosed homes in valley - News - ReviewJournal.com
Occupy Wall Street is going door to door in single family neighborhoods asking for permission to set up tents in the yards of people who are facing imminent foreclosure. The article notes that they couldn't contact the owners in gated communities, so they left cards. Thanks to Fred Pilot for the link.

Deer Ridge residents oppose homeowners’ association

2012-01-07T18:14:00.002-06:00

CHANNAHON — Although many who live in newer subdivisions enjoy the protections outlined in homeowners’ association covenants, residents of the 50 houses in the Deer Ridge subdivision say they do not want one.

All, save one whom residents say wasn’t home when they called, signed a petition they brought to Monday evening’s Channahon Village Board meeting stating they do not want to establish a homeowners’ association in their subdivision.

They were promised there would be no association when they purchased their residences, they told trustees, which is the reason some found the site so attractive. But now, according to the 20 or so residents, the developer, Mark Skaggs, is telling them the village is requiring him to set an association up.

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Thousands of words appeared on this blog since last weekend when I asserted HOAs lack acceptance as legitimate local governing authorities and are regarded as intrusive, overbearing juntas of volunteer directors with too much time on their hands aided by managers and attorneys seeking to maximize fee-driven enforcement activities and litigation revenue.

It therefore wasn’t surprising to read of this revolt against an attempt by the village elders of Channahon, Illinois to force 50 properties into an unwanted HOA as the village attorney told opponents an HOA to watch over them would protect their property values. To the HOA opponents, that “protection” is likely about as desirable as protection provided by Tony Soprano and crew.

The revolt against forced HOA governance could be spreading. Note the comment in the story by Channahon Village Board Trustee Debbie Militello, who is quoted as saying she has heard of many residents unhappy with their associations and recently met with a group of homeowners in another subdivision that is fighting a similar annexation into Privatopia.

Argument provokes fatal shooting in Lapu | Sun.Star

2012-01-07T12:44:00.000-06:00

Argument provokes fatal shooting in Lapu | Sun.Star
Police believe the attack on Lapaz may have stemmed from an old rift over the collection of association dues. Lapaz, who was aboard her Mitsubishi Montero, had stopped in front of their village gate to call her 20-year-old son, Buenjer Acoril. She instructed Acoril to open the gate, as Villarba was not in the guard house. But as Acoril opened the gate, Villarba, along with Emborong, arrived and allegedly stopped Lapaz’s son. Acoril and Villarba began arguing, with the latter claiming that Lapaz cannot enter the village without a sticker prescribed by the homeowners’ association. Lapaz then joined the argument, allegedly cussing out the security guard and dragging Emborong into her tirade. That’s when Emborong allegedly returned to the guard house, took out Villarba’s shotgun, and shot Lapaz. After shooting the woman, Emborong, along with another security guard, Rodolfo Cavalida, fled from the area.
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As I keep saying, if you think things are bad in your HOA, consider how things work elsewhere around the globe--in this case, the Philippines. Thanks to Fred Pilot for this link.

Obama's Consumer Watchdog Targets Mortgage, Payday Lenders - BusinessWeek

2012-01-07T12:42:00.000-06:00

Obama's Consumer Watchdog Targets Mortgage, Payday Lenders - BusinessWeek
Consumers may benefit from its reach whenever they take out a payday loan, negotiate a mortgage rate, borrow money for school or pay a credit card fee. For those who think they've been wronged, there will be a complaint system to help them fight back.
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The congressional republicans fought bitterly to keep this day from coming--the day when the Consumer Financial Protection Bureau would start operating, two years after it was created. First they filibustered Elizabeth Warren's nomination until Obama finally withdrew it. Then he nominated Richard Cordray in her stead because, he thought, Cordray would be acceptable to the republicans. But they kept his nomination from coming to a vote anyway. They demanded that the enabling legislation for this new agency be changed. The House republicans knew Obama would make a recess appointment, so they refused to agree that the Senate could go into recess, which led to the absurd 30-second sessions being held every few days by one person. Of course, they were on recess, but just pretending that they weren't. Finally Obama just made the appointment on the grounds that the Senate was actually in recess. He called them on their nonsense. This has produced howls of fake outrage from Fox News and AM talk radio.

This is an important agency, at least potentially. American need protection against payday lenders, mortgage companies, mortgage "rescue" scam artists, corrupt and thieving banks, and a host of other social parasites. The house republicans are so extreme in their views that they are blinded to one simple reality: Americans are headed toward debt peonage, and if things don't change soon, at some point there will be a massive political and possibly violent rebellion against the entire system.

The End Of Republican Fusionism? - The Dish | By Andrew Sullivan - The Daily Beast

2012-01-07T08:49:00.000-06:00

The End Of Republican Fusionism? - The Dish | By Andrew Sullivan - The Daily Beast
What we're seeing, I think, is Romney as the last, dying gasp of Republican fusionism. The old alliance - free market capitalism, social conservatism and anti-Communism - has morphed into a new one - libertarianism, Christianism and anti-Jihadism. Each faction has become more extreme as they have marinated in their own media complex, and responded to their fantasies about president Obama. And there is therefore no fusion possible between them. Maybe a charismatic figure like Reagan could somehow bind them together again; but such a figure comes along rarely.
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Interesting analysis. Ron Paul's followers are almost all young men who are obsessed with libertarianism's simplistic world view that justifies radical selfishness as some sort of higher morality. How they can make common cause with the religious right and the neocons I can't imagine. I mean, are we going to simultaneously punish and legalize prostitution, gay marriage, and abortion? Are we going to both invade and not invade Iran?

So it begins: Chicago vacant condo program - chicagotribune.com

2012-01-06T17:42:00.000-06:00

2012 housing outlook: Chicago vacant condo program - chicagotribune.com
Within the city of Chicago, armed with an almost 2-year-old law, those efforts have moved beyond pen and paper. In such neighborhoods as West Woodlawn, Austin and Rogers Park, areas where condominium foreclosures have left entire buildings empty and created eyesores, the city has taken steps to turn condo units into apartments by selling entire buildings to investors and developers who will rehab them for rental.

The program is the result of amendments to the state's Condominium Property Act that took effect in January 2010. The changes allow a municipality to petition a Circuit Court to allow a receiver to sell the distressed building as a whole. Owners of the units, which typically are lenders, receive a fractional share of the proceeds from a sale after liens are erased. After taking bids, a judge decides who the buyer of the building should be, a decision based not just on price but on the buyer's financial resources, track record and building plans.
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This is the first article I've seen on the Distressed Condominium Property Act as it is working out in Chicago. This is an Illinois state statute that allows the city to petition the circuit court to appoint Community Investment Corporation as receiver for a failed condo project. CIC then gets all the banks who own the units together on one page, deconverts the project by dissolving the condo ownership structure and CC&Rs, and then sells the building to an investment group to operate as an apartment building.

To date there are 150 projects somewhere in the deconversion process, out of a total of 250 that CIC has identified as good candidates. About 30 are already under court order for deconversion.

This is an easy way to solve two problems: first, get rid of failed condo projects that are a blight on urban neighborhoods; second, restore the proper level of rental housing that went way out of balance during the subprime insanity.

Now--if we can start doing something about all those unnecessary HOA projects. The Federal Reserve's new white paper on the housing market says, "Reducing some of the barriers to converting foreclosed properties to rental units will help redeploy the existing stock of houses in a more efficient way. Such conversions might also increase lenders’ eventual recoveries on foreclosed and surrendered properties."

Bottom Line - Subprime suicide: Notorious broker found dead

2012-01-06T12:11:00.000-06:00

Bottom Line - Subprime suicide: Notorious broker found dead
A disgraced securities broker who was one of the subprime mortgage market's chief magicians was found dead of an apparent suicide in his South Florida condo this week. Cliff Popper seemingly created wealth out of thin air — until it all collapsed in 2007. His firm pocketed commissions of more than $16 million in just three years, but when investments backed by risky mortgages turned sour, Popper lost $100 million of investors' money.

When he died, Popper was waiting for a federal judge to hand down a decision in a civil fraud trial brought by the the Securities and Exchange Commission.

Brookstreet Securities, where Popper was a head trader, imploded when the subprime mortgage market crashed. Investors, many of whom had sunk their life savings into the subprime mortgage-backed securities Popper peddled, were left with nothing. Two years later, the SEC charged Popper and nine of his former colleagues with fraud, and he declared bankruptcy in July of that year.
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Fred Fischer on the "Do owners believe CC&Rs are contracts?" debate

2012-01-04T21:49:00.002-06:00

Fred Fischer weighs in:

Evan:
You may share the following with anyone. The following is my response comments to the Privatopia story of, Monday, January 02, 2012 Do owners believe CC&Rs are contracts, part trois...

For CID housing to continue to exist into the future and be sustainable will require a major shift away from its present use of adhesion contracts imposed upon property buyers. Therefore a legal shift needs to occur at build-out from the original intent of the developer to manage and sell his properties. To the owner/members so that they can manage and sustain what is then their properties and responsibility.
We have long understood as Tyler stated,….the real problem which is that community associations are created mostly for the benefit of municipalities and developers… Which has resulted in property owners sending a loud message of un-support for the private governance imposed upon them by their local municipalities that burdens them with high liability and no protections. By striping members of their basic liberties and the use and enjoyment of their own properties that treats members like renters and children who have to ask permission to do anything. Even though the member’s private properties are not owned by the HOA entity yet the contract authorizes the HOA absolute control over many aspects of it.
To say that all housing associations should be abolished is not doable presently especially for complex types of CIDs which have utilities company’s, private streets, golf courses, high rise condos, apartments, airparks and commercial property etc. . However they could be converted to help reduce the substantial conflicts and liabilities that automatically and inherently come with privatized housing governance in a few basic ways. First existing and new non complex CIDs could be converted to special districts or other governance forms that are less expensive to operate while retaining the member’s property and other rights. Second the absolute control over the private properties must be largely eliminated in order to reduce the liabilities and conflicts. Third only CC&Rs that truly ‘touch and concern the land” such as structural or permanent changes should be created instead of subjects like refuge containers, signs, animals etc. Fourth require State oversight and licensing of association management firms and others. So CID members can hold accountable those who collect and manage member’s funds and provide advice and servicers to Boards.
Now maybe we can get past the obvious that CC&Rs are enforceable and that most people understand that they are obligated to pay for many of the amenities and services found in their CIDs. Furthermore I agree with Tyler that we need to spend far less time fretting over many of the HOA issues that we already well understand and start making some substantial reforms that will make CID housing, property owner friendly and financially solvent today and into the future. Which will require the property owner’s participation at the creation table to include their best interests and not just those of the municipalities, developer and others. Tyler is also correct when he said that …all of us should be discussing how to help owners save whatever remaining equity they have, and then second, how to convince government to quit mandating for sale housing that will inevitably become obsolete because it has a form of governance that cannot fund its operations--just for the sake of additional property tax revenues.

Finally at the end of the day no one can say we don’t understand why housing association governance is economically collapsing or so controversial. Because when basic liberty and the use and enjoyment of one’s property becomes absolutely controlled by others, to the point that a door knocker or flower pot can’t be installed without committee approval with the consequence of a fine and foreclosure if disobeyed. We have just created a new form of tyranny masqueraded as a housing association so that others can earn an income or profit over the conflicts and this needs to end NOW. Or CID housing will continue to economically and socially collapse and then tens of millions of property owners will possibly be living on the streets.

Thanks, Fred Fischer

George Staropoli on the "Do owners believe CC&Rs are contracts?" debate

2012-01-04T21:48:00.000-06:00

From George Staropoli comes this response to the Pilot/Berding discussion:

Finally, a debate, a firm discussion of one of my favorite issues — the legitimacy of the HOA regime. As the unmentioned, chief protagonist asserting the illegitimacy of private local governments that are unaccountable under the Constitution, I offer my comments. Because of the length of my response, I’m forced to provide an excerpt here on The Privatopia Papers, and the full response can be found at Legitimate HOA Government.
Berding dismisses concerns over “the legal structure of community associations as if that were somehow a fundamental problem.” He maintains that “It isn’t, it’s largely academic, and in the big picture, it isn’t important.” You know, what I’ve been writing about as the defective HOA legal scheme founded upon the 1964 “bible” for HOAs, The Homes Association Handbook. Berding asks, in apparent astonishment, How one would respond to the statement that, “Homeowner associations are not legitimate forms of government?” He rejects the reading the Constitution as circular reasoning. But, there is more to constitutional doctrine than found in the Constitution, so please read on Mr. Berding.
McKenzie reaches the opinion:
I conclude that for the most part, despite having some reservations and misgivings about privatized local government, the overwhelming majority of Americans will continue to act as if they believe condo and HOA actions are legitimate contracts.
(But, surely, shouldn’t our policymakers and legislators care?)
And what is the fundamental criterion of legitimacy? Constitutional doctrine says that a legitimate government is based on fair and just laws. But this issue has not been discussed in this exchange of posts, or anywhere else!
With respect to HOAs as private organizations, I ask, Has the legislature delegated authority to these entities to act as an unregulated private government? And the answer is unquestionably, NO! (Recall that in Arizona, its appellate court found the question of improper delegation of regulatory authority to an agency, no less than to a private entity, was sufficient for statutes allowing ALJ adjudication to be declared unconstitutional.) Case law abounds with such statements as:

“We think such power to determine who shall have the right to engage in otherwise lawful enterprise may not be validly delegated to a private organization”; “the Legislature cannot constitutionally delegate to the private parties governmental power . . . contrary to the public interest”; “The Legislature may not surrender its authority to a body [to further] the interest of a group which may be antagonistic to the public interest”; and “legislative bodies may not abrogate their responsibility . . . by delegating this responsibility to private parties ‘uncontrolled by any standard or rule prescribed by legislative action.” (Administrative Law, Section 1.3.2, 2nd ed., Aman & Mayton, West Group 2001).

In my view, the primary reason for this state of affairs has been the avoidance and refusal of those who should know better to raise basic questions pertaining to our social contract under the Constitution.

Landscape Absurdism: Las Vegas - Design - The Atlantic Cities

2012-01-04T00:05:00.000-06:00

Landscape Absurdism: Las Vegas - Design - The Atlantic Cities
Take a look at the way some developers and cities have decided to lay out subdivisions.

Billions needed to upgrade America’s leaky water infrastructure - The Washington Post

2012-01-03T09:46:00.000-06:00

Billions needed to upgrade America’s leaky water infrastructure - The Washington Post
Rapidly deteriorating roads and bridges may stifle America’s economy and turn transportation headaches into nightmares, but if the nation’s water and sewer systems begin to fail, life as we know it will too. Without an ample supply of water, people don’t drink, toilets don’t flush, factories don’t operate, offices shut down and fires go unchecked. When sewage systems fail, cities can’t function and epidemics break out.

“All the big cities have these problems, and to me it’s the unseen catastrophe,” Hawkins said. “My humble view is that the industry we’re in is the bedrock of civilization because it’s not just an infrastructure that is a convenience, that allows you to get to work faster or slower. At least with bridges or a road, people have some idea of what it is because they drive on them and see them. ”

And just like roads and bridges, the vast majority of the country’s water systems are in urgent need of repair and replacement. At a Senate hearing last month, it was estimated that, on average, 25 percent of drinking water leaks from water system pipes before reaching the faucet. The same committee was told it will take $335 billion to resurrect water systems and $300 billion to fix sewer systems.
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You know, don't you, what will happen? Wall Street will offer creative ways to finance these repairs, which will end up costing ten times what they should. Ask Jefferson County, Alabama.

Typewriter repairman keeps busy in high-tech age - Houston Chronicle

2012-01-03T09:42:00.000-06:00

Typewriter repairman keeps busy in high-tech age - Houston Chronicle
Anybody out there still have one of these? For many years I hung onto my Adler portable, which was built like a tank. I bought it in the late 1970s and only got rid of it a few years ago. Maybe after the world runs out of oil and we are all working by tallow candlelight I will wish I had kept it.

Occupy Bank of America? - Credit Slips

2012-01-03T09:40:00.000-06:00

Occupy Bank of America? - Credit Slips
It explains a lot about the state of our legal system if the Romneys of the world honestly believe that small claims court is a the way middle class folks can receive justice.
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Remember Romney's ridiculous suggestion that people who are being wrongfully foreclosed on should use small claims court to challenge that? Law prof Adam Levitin makes the point that this is...a ridiculous suggestion.

New Class At Columbia Focuses On Occupy Wall Street « CBS New York

2012-01-03T07:56:00.000-06:00

New Class At Columbia Focuses On Occupy Wall Street « CBS New York
Columbia University will offer a new course for upperclassmen and grad students next semester. An Occupy Wall Street class will send students into the field and will be taught by Dr. Hannah Appel, a veteran of the Occupy movement.

The course begins next semester and will be divided between class work at Columbia’s Morningside Heights campus and fieldwork that will require students to become involved with the Occupy movement outside of the classroom.

The course will be called “Occupy the Field: Global Finance, Inequality, Social Movement” it will be run by the anthropology department.
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Thanks to Marc Plastrik for this link. I think this crosses the line between teaching the respected anthropological method of participant-observation and mandated activism. Obviously the students who take it will be pro-OWS, but I think with undergrads professors shouldn't force things like this on them. And you have to wonder what the professor will do if a student does the fieldwork and then writes an anti-OWS paper.

Do owners believe CC&Rs are contracts, part trois...

2012-01-02T22:24:00.001-06:00

Tyler Berding tried to comment my long post in response to the Pilot/Berding exchange, but Blogger rejected it as too long. I am posting Tyler's response here:

From Tyler Berding:

I agree with Evan that the vast majority of buyers of property within a common interest development do understand that there are covenants running with the land that impose certain restrictions on its use and financial obligations on them. Maybe not in those terms, but certainly they know that the roof isn’t maintained by the city, that you can't leave wrecked cars on their front lawn, that the property is managed by a board of directors, and that there is a community pool that isn't maintained for free. If they are truthful they will also tell you that they recognize that the assessment statement that arrives every month is to collect money to pay for something other than the annual Christmas party.

To suggest otherwise would be insulting to most owners. People do understand that there are obligations that must be met, and a high percentage meet those obligations and would look at you blankly if you told them that somehow they didn't have to pay the monthly assessment because it was not fully explained that they bought a home with covenants. The fact is that very few believe that--so we should get off of the "They were duped" soapbox. Yes, not only are CCRs covenants which can be enforced by the courts as can any contract, it is a business proposition that most people understand until they choose not to. So, no I don't agree that people fail to see their obligation to pay assessments for example, as a contractual obligation, just as most people don't fail to see their car payments, feeding the parking meter, property taxes, and mortgage payments also as binding obligations.

Now having said that, it is also clear that if any contract provision is extracted through deceit it can be deemed by a court to be without the owner's consent and hence unenforceable--as in, no contract ever existed. Courts have found provisions of CCRs imposed unilaterally by developers to be "unconscionable" and therefore unenforceable for that very reason--no consent. The courts of many states, for example, have invalidated such things as binding arbitration provisions imposed by developers. So if an owner can prove that they actually had no idea that they were buying a home which was bound by covenants, and can offer sufficient evidence to prove that they were misled, they might have a claim against their seller, and maybe a case for rescinding the contract and returning the house--but remember, that takes proof, not just a short memory, and no, you can't rescind the contract and also keep the house.

As Evan knows, I think that the debate over the legal nature of the relationship between a homeowner and their homeowners association is largely a distraction from the real problem which is that community associations are created mostly for the benefit of municipalities and developers, with very little insistence by government on a financial model that can remotely meet the expectations of the eventual homeowners. Community associations are dying financially. Their business model is fundamentally flawed and many will eventually become obsolete and fail. That is the real issue--not whether a board’s authority to enforce the governing documents is a legitimate exercise of police power, or of contract, or of whatever other legal or moral hook you choose to hang your hat on. And before anyone gives me a big thumbs down for that comment, consider another of Evan’s blog posts, the one today about a city threatening to shut down an association and evict the owners because they haven’t paid their water bill.

If you think that situation is an anomaly, then you have been spending too much time reading the Constitution and not enough time looking at the budget. Community associations are a financial disaster in normal times, and when hidden or unexpected damage or expenses arise, most associations lack the financial reserves to meet the demand. The water bill case is just one example. The average association does not have half the financial reserves it needs to properly maintain the expected issues—and they have zero funding for the unexpected.

So I guess my response to your post, Evan, and to Fred’s position, is this: While I think that community associations are creatures of contract--I also think we spend too much time debating such things as the legal structure of community associations as if that were somehow a fundamental problem. It isn’t, it’s largely academic, and in the big picture, it isn’t important. I can appreciate that it generates a lot of heat, but unfortunately not too much light. That’s because there is no conclusion—and there never will be because the reasoning is largely circular. “Boards of directors abuse owners because homeowner associations are not legitimate forms of government” Where would anyone start to respond to that? And please don’t tell me to check the U.S. Constitution. That truly would be circular.

But worse, that debate, while stimulating and capable of taking up many kilobytes of blog space, diverts us all from the more immediate discussion of how best to protect owners and preserve what little value remains in many of their homes. If large scale underfunding cannot be rectified, and I believe that with most existing condo associations, it cannot be, then it won’t matter whether the form of government is constitutional or not, or who created it, or if the governing documents were found in a Cracker Jacks box. Better, all of us should be discussing how to help owners save whatever remaining equity they have, and then second, how to convince government to quit mandating for sale housing that will inevitably become obsolete because it has a form of governance that cannot fund its operations--just for the sake of additional property tax revenues. Sustainability is an objective for which we might actually get consensus!

As always, thanks for the opportunity to enter the discussion.

Tyler

Tyler P. Berding, Esq.
Principal
Berding-Weil

$56K water bill could force condo residents out

2012-01-02T14:59:00.003-06:00

COLLEGE PARK, Ga. —A longstanding dispute over a water bill in College Park could end up with the Yorktowne Condominiums shutdown and everyone evicted by Tuesday morning.

The city of College Park said it will shut off water service to the complex at 9 a.m. on Tuesday unless the homeowners association comes up with part of a $336,000 dollar debt the complex has run up in recent years.

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Things are so dire the complex is seeking charitable contributions to stay afloat.

Please stop sending repetitive posts

2012-01-02T14:20:00.000-06:00

I am getting numerous copies of the same, or virtually the same comment that I have put up more than once already. Please stop. If you have something new to add to the situation in Pennsylvania, fine. But I am not going to keep posting the same thing over and over. There is a point where it just becomes spam.

Legal Blog Watch

2012-01-02T14:18:00.001-06:00

Legal Blog Watch
So here you have some wag's take on the "three burning legal questions of the day."

NYC's foreclosures continue slow avalanche | Crain's New York Business

2012-01-02T14:16:00.000-06:00

NYC's foreclosures continue slow avalanche | Crain's New York Business
The rate of foreclosures may be stabilizing in most big American cities, but that's not the case here, according to new data.

In the New York metro area, the foreclosure rate rose to 7.5% in June, up 2.1 percentage points from the previous peak in December 2009, according to Foreclosure-Response.org, a joint project by the Local Initiatives Support Corp., the Urban Institute and the Center for Housing Policy. The rate is up 3.7 percentage points from March 2009, when the group started tracking the data in 100 U.S. metro areas.

“New York is a judicial state, so it takes a long time for properties that enter foreclosure to exit the process,” said Rob Pitingolo, a research assistant for Urban Institute. “The backlog of foreclosures in the system is driving the foreclosure rates up.”

Read more: http://www.crainsnewyork.com/article/20111229/REAL_ESTATE/111229887#ixzz1iKlg635M

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Since when did speed become the overriding virtue of the judicial system?

Do Americans consider CC&Rs Contracts, Revisited

2012-01-02T13:55:00.001-06:00

I have been thinking about an issue raised in a post by Fred Pilot recently, and responded to by Tyler Berding in a comment. I will do both of them the injustice of oversimplifying their arguments so I can rush to make my own, and I invite them (and others) to reply and continue the conversation.

Fred argues that the American public generally does not consider CID declarations and other governing documents to be contracts. Fred has long held that Americans do not accept the basic concept of residential private governance. He believes that the general home-buying public rejects the notion that there is any real legitimacy in the decisions made by condo associations and HOAs. If I understand his position correctly, he is saying that Americans do not consider CID documents and decisions to be legitimate either in a public or a private sense. They are not viewed as the actions of de facto quasi-local governments, and they are not viewed as obligations people are bound to by private contract. They fall between two stools, as the saying goes.
Tyler responds that they are contracts, period, because that is what courts universally say they are. This is in large part beyond dispute: like it or not, condo associations, HOAs, and housing cooperatives are recognized by federal and state law, and CC&Rs and other CID governing documents are fully enforceable, subject to a few exceptions, in every court in the nation. What, then, is the point of claiming that people reject them as illegitimate? Isn’t that akin to saying that you reject the law, which you have to obey regardless of how you feel about it?
This is an important conversation, and I have been thinking about it for many years. At the outset, it has to be pointed out that it is logically possible for both positions to be true. Perhaps the American public believes that homeowner and condo associations have no legitimacy, but they obey their rules for the most part simply because they know those rules are enforceable. However, I think the truth is more complicated than this.
I agree with Tyler, as I must, that CID governing documents and the decisions based on them are legally enforceable under contract and real property law. This has been true for many decades, even centuries, and in my first book on this topic I relate some of the early legal history that laid the foundation for enforcing these documents.
However, I think that Fred raises an important point. Is it true, as he claims, that these documents and decisions have no legitimacy in the eyes of the public, notwithstanding their enforceability? And if this is true, does it imply that there could conceivably be sufficient opposition to CID regimes to bring about dramatic change, such as local government opposition to CID construction, developer decisions to move toward other ways to build, market rejection of CID housing, judicial rulings that undermine CID power, or state legislative action that would reverse the overwhelming trend in favor of CID construction?
How would we measure the level of rejection of the concept of CID living? How about the following questions:
1. Do people keep buying them? Yes. This is the predominant form of new housing construction and until the market collapsed people couldn’t buy units in condo associations and HOA fast enough.
2. Do people generally obey their rules and make their assessment payments without having to be sued? Yes. You can dispute the meaning of “voluntary” if you like, but the level of voluntary (not specifically coerced) compliance with CID regimes is very high. When the HOA president tells you to stop parking your car in the driveway overnight, nearly everybody moves it into the garage. Period. End of story.
3. Is there nonetheless a substantial amount of conflict, and even litigation, over fundamental issues, such as obeying rules and paying assessments ? By all accounts, yes, especially when associations tread on areas that are perceived as not generally within the purview of public local governments and within the scope of owner dominion and control. This problem is well documented in the literature.
4. Have some owners organized themselves outside their association structure to oppose particular actions of their association, to reform the laws generally, and even to abolish CID housing? Yes. Lawyers and property managers routinely portray these folks as chronic malcontents, social misfits, and neighborhood cranks. Such people do exist, and I have met some of them. But if you have met as many “Pink Flamingo” movement people as I have, you cannot help but see that many of them are just ordinary home owners who have been driven into opposition by lawless, self-serving, arbitrary, and/or predatory behavior on the part of their BODs and the professionals who advise them. I believe that the lack of governmental oversight of CID activities leads to a whole lot of unnecessary problems.
5. Is it hard for many associations to find sufficient volunteers to serve on BODs? Yes, and it is said all the time in industry conferences and publications. This is beyond dispute, and it is a major problem, because it is hard to imagine how CIDs can exist without a sufficient supply of volunteers.
6. Have state legislatures become involved in law reform out of concern (among other things) for the way associations sometimes treat owners, and the general level of discontent they believe exists? Yes, in a number of states, and over a number of issues, including assessment collection and foreclosure, rule-making, elections, access to records, budgets, meetings, architectural review, and on and on.
7. Is the industry concerned about the public perception of CID living? Undoubtedly, and they spend a whole lot of time trying to convince the press and the public on that score, including paying for surveys that purport to show how much people like their associations. Would they bother to do this if the underlying point were really so obviously true? I think not.
So, on the specifics of CID life I suppose there is evidence on both sides, but that isn’t the end of the argument. What do we know about American political culture that would help us answer this question? I think several things need to be pointed out. Public opinion polling over the years makes some things abundantly clear.
1. Americans’ support for the institutions of national government goes up and down all the time, as measured by the best polling available. So what? That doesn’t mean we reject the concept of Congress (currently at about 12% approval), or the Presidency, or the Supreme Court, or representative democracy. The same is true for condo and HOA decisions. If things are going well, we accept and approve. When things are bad (special assessments, litigation, etc.) we get mad. But…see #2 below…
2. For the most part, Americans are an obedient, rule-following, moralistic, pious lot who do what they are told by people in authority, regardless of whether it is the private mall cop or the local police. I do not expect widespread disobedience in CIDs. I do expect huge financial problems, but that is another issue. I realize that there are constitutional questions to be raised about the use of private entities to do public tasks. I have written about it at some length. However, most Americans are not bothered by such issues, so they do not reject private governance out of hand.
3. The American public overwhelmingly believes in the sanctity of private property and the obligations of contract. They believe that individuals are largely responsible for their lot in life. In fact, that is one of our distinguishing characteristics as a people. Nowhere on earth is there this obsession with competitive individualism. (This is why it is so easy for Fox News and Rush Limbaugh to blame the entire subprime mortgage crisis on Barney Frank and home buyers who got greedy and bought more house than they could afford—a claim that is so far beyond ridiculous that it can only be called a huge lie.) People here believe that if you bought a property with 200 pages of documents attached, then a deal is a deal and you are on the hook for obeying all of it. Sure, you can talk about adhesion contracts, and I do—but most people really
And when I add the CID-specific facts to the things we know about American political culture, I conclude that for the most part, despite having some reservations and misgivings about privatized local government, the overwhelming majority of Americans will continue to act as if they believe condo and HOA actions are legitimate contracts. Even when they go into conflict with their BOD they will do it in the language and context of contract law. I think, as I argue in my new book, that this form of housing is now part of the fabric of local governance, for better or worse.

QCOnline : Woman sues; says condo association harassed her over 'psychiatric service dog'

2012-01-02T08:00:00.000-06:00

QCOnline : Woman sues; says condo association harassed her over 'psychiatric service dog'
CHICAGO (AP) A woman who relies on a specially trained dog to prevent panic attacks is suing a Chicago condominium association for allegedly harassing her about the 'psychiatric service dog' and forcing her to sell her apartment.

A U.S. district judge ruled this week that Mary Jo Stevens' lawsuit can proceed.
--------------------
Thanks to Shu Bartholomew for this link. The federal judge is Harry Leinenweber, a distinguished jurist who has assisted with the award-winning Mock Trial Team at the University of Illinois at Chicago (shameless plug) for some time.

Mt. Washington Parking Space Assessed At Nearly $300,000 « CBS Pittsburgh

2012-01-02T06:57:00.000-06:00

Mt. Washington Parking Space Assessed At Nearly $300,000 « CBS Pittsburgh
PITTSBURGH (KDKA) — A lot of city property owners are outraged over their reassessments, but one man says his beats them all.

The value of his 18-by-10-foot parking space on Mt. Washington jumped from $5,000 to more than $287,000.

That’s even more than his condo
-----------------------
Amazingly, this happened in Pittsburgh and not Chicago.

CIOC report.pdf (application/pdf Object)

2012-01-01T21:11:00.001-06:00

CIOC report.pdf (application/pdf Object)
This is a direct link to the report on Common Interest Ownership Communities in Pennsylvania that is mentioned in the story linked below. I haven't read it yet, but I love this line, which once again just states something I have been saying for decades: "Unfortunately, Commission staff was unable to provide concrete CIOC data specifically requested in HR 350. The data simply do not exist statewide and it would take significant resources and a commitment from the county and municipal governments to locate the data requested. Furthermore, no single state agency, county, or municipality is required to collect this type of information."

Report: State spurred gated developments | PoconoRecord.com

2012-01-01T21:08:00.000-06:00

Report: State spurred gated developments | PoconoRecord.com
Cost and government regulations spurred developers to build homes inside private communities, helping to explain the prevalence of these developments in the Poconos, a new state report shows.

At least 56,422 homes are within private community associations in Monroe and Pike counties.

There have been financial incentives for both municipalities and developers to make communities private, according to the report released by the Joint State Government Commission.
----------------
Thanks to Beanie Adolph for the link to this story that states what we have been saying for many years. Maybe somewhere a libertarian will read this and connect with the real world, however briefly, but perhaps long enough to realize that developers and local governments are making this happen--not consumers.

Calculated Risk: Some Housing Forecasts

2012-01-01T16:54:00.000-06:00

Calculated Risk: Some Housing Forecasts
"Now there is a growing consensus that new home sales and housing starts will increase in 2012. I think a small increase is likely, even with the large number of distressed homes, and I will be writing about the reasons soon."
-----------------
I hear that from various sources. Some developers are making rumbles about getting back in action. But I have to think they, and the banks that make construction loans, will be looking at market conditions very closely, especially the supply of foreclosed homes that are put up for sale, many of which are new or nearly new and would drive down asking prices for newly constructed homes. The unknown variables are (1) the number of foreclosures and other surrenders of ownership to banks, and (2) the number of those properties that are dumped on the market in 2012. Courts, foreclosure defense lawyers, and banks all have some direct or indirect control over the supply end of the equation.

The Journey - Tony and the Roundhouse - YouTube

2012-01-01T15:44:00.000-06:00

The Journey - Tony and the Roundhouse - YouTube

Number of Southern California fires rises to 39 - CNN.com

2012-01-01T15:38:00.000-06:00

Number of Southern California fires rises to 39 - CNN.com
"When you have millions of people living with millions of cars in these very dense neighborhoods, this is becoming a new form of domestic terrorism that really has got our community in a very bad spot," West Hollywood Mayor John J. Duran told CNN Saturday.
------------------
So does that mean the military will snatch people off the streets and send them Guantanamo to be waterboarded?

I was channeling Ron Paul there for a second.

But seriously--is this an arsonist who is igniting randomly selected cars, or is it some kind of organized effort?

Elimination of redevelopment imperils ongoing projects, stops future developments in their tracks - SGVTribune.com

2012-01-01T15:18:00.000-06:00

Elimination of redevelopment imperils ongoing projects, stops future developments in their tracks - SGVTribune.com
When the California Supreme Court on Thursday issued a ruling that essentially annihilated local redevelopment agencies, it also killed the single-most important economic development tool that more than 400 cities statewide have, city officials said.

With the ruling that the Legislature can eliminate redevelopment agencies, many San Gabriel Valley and Whittier area leaders wonder how their communities are going to move forward with ongoing projects. And they don't know what to do about future plans now left in limbo.

"It puts everything up in the air," West Covina City Manager Andrew Pasmant said. "It's so far-reaching it's amazing."

Once redevelopment agencies are dissolved, city leaders predict that communities will face drastic consequences, including economic disadvantage, decreased revenues, more blighted areas and vacant buildings, elimination of thousands of job opportunities and reduced affordable housing.
-----------
And as Fred Pilot points out, this eliminates one of the tools that local governments could have used to deal with dilapidated condo projects.

Questions surround house demolition - East Side - The Buffalo News

2012-01-01T15:16:00.000-06:00

Questions surround house demolition - East Side - The Buffalo News
"My clients had no knowledge of the fire or the demolition and were not notified of either," Berger said in court papers. "Upon discovering the facts, the defendants went to the Bailey Avenue site to find that both houses had been demolished. To their knowledge, there was no damage to 1801 in the fire."

The property owners had insurance, which made a payment toward the fire loss at 1805 Bailey Ave. But insurance wouldn't cover 1801 Bailey.

"Other than a little smoke damage there was nothing wrong with 1801," Berger said.

"The insurance company sent an inspector, and refused to pay because it was not a covered loss. There was no fire damage. The demolition was just something the city did," Berger said.
-------------------
Submitted for your consideration: two houses, side by side. One burns. The other is not. The city of Buffalo demolishes both of them, then refuses to turn over documents. Oh--and the city wants to be paid $40,000 for demolishing the undamaged one on top of the $40K for the one that burned. Happy New Year.

"Small claims flash mobs" sue corporate defendants

2012-01-01T13:43:00.005-06:00

If she's successful in getting others to follow her example, Peters could inspire a whole new litigation strategy in the auto industry and other businesses. Working together but filing lawsuits independently, consumers could force companies to go mano a mano with individual plaintiffs in far-flung courtrooms nationwide.

Call it a small-claims flash mob.
---------------------
These kinds of organized small claims actions cropping up against vehicle manufacturers could also conceivably target HOAs where HOA inmates are similarly outgunned by HOA corporations and their superior legal resources.

$6.3 Trillion Wiped Off Global Markets in 2011 - CNBC

2012-01-01T12:38:00.000-06:00

$6.3 Trillion Wiped Off Global Markets in 2011 - CNBC
Global stock market capitalization dropped 12.1 percent to $45.7 trillion according to Bloomberg data, while the euro ended the year as the worst performing major currency after finally starting to succumb to the continent’s financial and economic woes in December.
-------------
Poof.

Janet Tavakoli: 2011: The Year 60 Minutes Misled Americans About Municipal Bonds

2012-01-01T09:21:00.000-06:00

Janet Tavakoli: 2011: The Year 60 Minutes Misled Americans About Municipal Bonds
Way back in December 2010, 60 Minutes did a story on the supposed crisis that was going to hit state and local governments and cause massive muni bond defaults in 2011. They featured a banking analyst named Meredeth Whitney who is regarded by some as a prognosticator. She predicted fifty to one hundred "sizeable defaults" totaling hundreds of billions of dollars. What actually happened was that muni bonds outperformed most other asset classes. Janet Tavakoli says they "beat the S&P, treasuries, corporate bonds and most commodities."

Tavakoli isn't saying that state and local governments are in good shape financially, but her takedown of Whitney and 60 Minutes for their exaggeration is instructive. Real governments have lots of institutional support that let them get through horrible economic times. Private quasi-governments, by contrast, are almost entirely left to get by using their own limited resources. If anybody at 60 Minutes had asked me about local government fiscal crisis I would have told them to pay attention to homeowner and condo associations. There has been some major carnage in neighborhoods all over the nation. While 60 Minutes and Whitney were focusing on Nevada's supposed impending default, what really happened? According to the State Treasurer, "The economy was still tough, but Nevada managed in anticipation of the ongoing crunch. Property tax revenues dropped, but sales tax revenues were up, gambling revenue was up, and business modified tax revenues were up. Her cash position in June 2011 was much better than 2010." And what happened to the condo and HOA projects in Clark County? What little coverage you can find shows a privately-managed housing sector in ruin.

You owe me $999,524 in change

2011-12-31T14:45:00.006-06:00

A Lexington man is accused trying to use a fake $1 million bill to pay for his purchases at a Walmart.

Michael Anthony Fuller, 53, of 3 Parker St., walked into the Walmart on Lowes Boulevard in Lexington on Nov. 17. He shopped for a while, picking up a vacuum cleaner, a microwave oven and other merchandise, totaling $476, an arrest warrant says.

When he got to the register, Fuller gave the cashier the phony bill, saying that it was real.

Store staff called police.

HOA convenants not generally regarded as contracts

2011-12-31T09:57:00.006-06:00

In 1990, Jack Scheuerman began practicing law for homeowners associations.

“In those days, doing HOA legal work was pretty easy,” Scheuerman said. “You just dealt with the board or the property manager. You advised them about the rules and covenant enforcement.

“There was not a lot of conflict.”

How things have changed.

Today, Scheuerman represents about 170 HOAs and it’s no longer a quiet little niche legal practice.

“There’s definitely a lot more conflict,” he said. “We’ve seen a dramatic increase in covenant violations.”

He’s not sure why folks who sign contracts agreeing to covenants when they buy their homes then decide not to honor their word.
---------------------------
That's because people don't see HOA convenants -- a real property contrivance -- as contracts. Especially once the developer that drafted them has turned over control of the HOA to the property owners. HOA convenants function more like municipal or county ordinances. No contracts are signed with the city or county; they are the law. And just as some property owners get crosswise with their local governments over ordinances affecting the use or modification of their properties, it also happens in HOAs.

In addition, many property owners don't see HOAs as legitimate governing authorities but instead as an intrusive, overbearing junta of volunteer directors with too much time on their hands aided by managers and attorneys seeking to maximize fee-driven enforcement activities and litigation revenue. Court rulings equating covenants with contracts do nothing to alter this widely held negative perception of HOAs.

Homeowner displays Santa Claus hanging by a noose in front of Sugar Land house | abc13.com

2011-12-30T16:30:00.000-06:00

Homeowner displays Santa Claus hanging by a noose in front of Sugar Land house | abc13.com
"We talked to the homeowners association who says they are already in contact with the homeowner to try and remove the hanging Santa. We also talked with Sugar Land police who say they've also talked to the homeowner."
--------------------
"Everybody's talkin' at me, I don't hear a world their sayin'..."
Thanks to Fred Pilot for this link. Bill O'Reilly's ridiculous "War on Christmas" should focus on this.

Byron Raynie » HOA Legislation

2011-12-30T14:42:00.000-06:00

Byron Raynie » HOA Legislation
Here is a more complete list of the new Texas laws with the numbers of the bills and their contents.

BofA Posts Worst Showing in Dow Average - Bloomberg

2011-12-30T14:17:00.000-06:00

BofA Posts Worst Showing in Dow Average - Bloomberg
Bank of America Corp. (BAC) is on track to be this year’s worst performer in the Dow Jones Industrial Average as concern about mounting mortgage losses and a global economic slowdown weighed on the second-biggest U.S. lender.
-----------------
So Uncle Sam and the Fed gave Bank of America multiple gazillion dollar bailouts and they still can't make money? Maybe FDIC receivership is in order, along with firing the management and getting an entirely new BOD.

Pennsylvania commission: State spurred gated developments

2011-12-30T09:38:00.005-06:00

Cost and government regulations spurred developers to build homes inside private communities, helping to explain the prevalence of these developments in the Poconos, a new state report shows.

At least 56,422 homes are within private community associations in Monroe and Pike counties. There have been financial incentives for both municipalities and developers to make communities private, according to the report released by the Joint State Government Commission.
-----------------------------------
A rare public sector accounting of the underlying dynamics that have fueled the rapid growth of Privatopia since 1970 and why HOAs are likely to end up in poor financial shape after their developers exit. Call it local government on the cheap.

Beaver Borough Bans Non-Residents From Sledding « CBS Pittsburgh

2011-12-30T08:00:00.001-06:00

Beaver Borough Bans Non-Residents From Sledding « CBS Pittsburgh
Sledding is permitted in Roosevelt Park although children under 12 must wear helmets, but the ordinance limits sledding to only Beaver Borough residents.
----------------
Helmets?

Delaying foreclosure: Borrowers keep homes without paying - Dec. 28, 2011

2011-12-29T13:28:00.000-06:00

Delaying foreclosure: Borrowers keep homes without paying - Dec. 28, 2011
Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they're willing to put up a fight. Among the tactics: Challenging the bank's actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.
---------
I love the use of the word "tactic." First of all, the entity foreclosing is hardly ever "the lender." It is a mortgage servicer. And why is it a "tactic" to expect that when some corporation wants to throw somebody out of their home onto the street, they should be required to prove that they have the legal right to do so? Are we just a nation of sheep who shamble out into the cold whenever somebody demands it?

Unfortunately many judges don't care much about these problems when the banks can't prove up their case, such as a total lack of proof of owning the note, perjured affidavits, backdated paperwork, and other things that ordinary people would get thrown in jail over.

Backtracking Lawmakers Expand U.S. Government Role in Mortgages - Yahoo! Finance

2011-12-29T09:15:00.001-06:00

Backtracking Lawmakers Expand U.S. Government Role in Mortgages - Yahoo! Finance
An 11th-hour payroll tax cut extension signed into law last week would for the first time divert funds directly from Fannie Mae and Freddie Mac, the two mortgage-finance companies under U.S. conservatorship, to pay for general government expenses.

That move came after two others that also are expected to increase government involvement: Lawmakers allowed a tax break on private mortgage insurance to expire and raised loan limits for mortgages insured by the Federal Housing Administration. Advocates of private mortgage finance say they are concerned that using fees from Fannie Mae and Freddie Mac is setting a precedent that will keep the government in the mortgage business for a decade or more.

--------------------
It is always entertaining to hear politicians (in this case the Obama Administration and all the republican presidential contenders) promising to eliminate federal agencies, even if they can't remember which ones. In this case Obama talked about winding down Fannie and Freddie. But the importance of the housing market to the overall economy is more obvious now than ever, and the GSEs are doing something that the so-called "private sector" isn't doing with any enthusiasm now: purchasing and securitizing home mortgages. And now we see that Congress has decided to take money from the GSEs instead of raising taxes on billionaires. How clever. I hope His Lordship King Grover Norquist approves of this.

America's Dirty Little Housing Secret Is Rocking The Suburbs

2011-12-28T09:06:00.000-06:00

America's Dirty Little Housing Secret Is Rocking The Suburbs
In the wake of the Great Recession, poverty rolls are rising at a more rapid pace in the suburbs than in cities or rural communities. Between 2000 and 2010, the number of suburban households below the poverty line increased by 53 percent, compared to a 23 percent increase in poor households in urban areas, according to a Brookings Institution analysis of census data.

Last year, there were 2.7 million more suburban households below the federal poverty level than urban households, according to the Bureau of Labor Statistics. That was the first time on record that America’s cities didn’t contain the highest absolute number of households living in poverty. There are many reasons for the dramatic turnabout in the geographic profile of poverty.

While many once depressed urban areas are being revitalized in an effort to draw in more affluent residents, other areas are attracting lower-income families who have moved to the suburbs in search of more affordable housing and better schools. This shift in low-income families to the suburbs coincided with a move of low-wage, low-skilled jobs to those same suburban areas between the 1970s and early 2000s, experts say.

Meanwhile, the introduction of new commerce and high-cost housing in the urban neighborhoods pushed overall prices upward, providing added incentive for low-income people to head for the suburbs.

Read more: http://www.thefiscaltimes.com/Articles/2011/12/27/Americas-Best-Kept-Secret-Rising-Suburban-Poverty.aspx#page1#ixzz1hqGduz9V

----------------------
Suburban areas have little or nothing by way of institutional support for poor people. And you can't convince any large foundation that there are any problems in the suburbs worth spending grant money on.

The Most Disturbing Presentation of the Year : Discovery News

2011-12-28T08:08:00.000-06:00

The Most Disturbing Presentation of the Year : Discovery News
In Jesse Schell's future we will still shop, eat cereal, brush our teeth and watch TV. But everything we do and (more importantly) all the information we attend to will win us points and benefits across a vast incentives network engineered by corporations and government entities. Or, more tersely: we will live in a game.

New Homeowner Association laws could slow down foreclosures

2011-12-27T22:37:00.000-06:00

There are more than 30,000 homeowner associations in Texas. Starting January first, they will fall under a new set of laws that put some limits on their power.

Some associations have been accused of moving to swiftly to foreclose on a member’s homes simply for missing annual dues. Under the new laws, associations must now get a court order before foreclosing and notices have to be sent out.

"The purpose of these new laws is to tip the balance of fairness back in favor of homeowners and provide homeowners associations more rigorous rules they have to abide by", said Attorney Clint David.

Falling home values mean budget crunches for cities

2011-12-27T15:13:00.009-06:00

“We’ll see, over the next few years, the real impact of the recession and housing crisis on local governments,” said Andrew Reschovsky, a professor of public affairs and applied economics at the University of Wisconsin at Madison who has studied the effects of the recession on city finances. “I think the case can be made that we have not yet seen the worst of the impact on local governments. . . . That seems to be accelerating.”

* * *

The worst may be yet to come.

“That storm has not yet hit,” Frank Alexander, a professor and housing law expert at Emory University, said of the looming decline in property tax revenues, which he and others agree will last years. “It’s beginning in 2011, but it’s really going to hit in 2012 and 2013.”
--------------------

While there are some encouraging indications of the economy awakening from a four-year-long slumber, real estate deflation continues. The resulting lower ad valorem property tax revenues are strapping local government coffers. Plus the massive reset in residential real estate values means new homes will be be assessed at lower values, translating into less tax revenue.

The perfessor will predict this means any new residential construction will necessarily involve mandatory membership homeowner associations to help take the strain off local government finances. There's a large degree of irony at work here. The inflation of the housing bubble drove the growth of Privatopia since local governments weren't about to willingly absorb the infrastructure and other costs to service a multitude of new residential "communities." Now that the bubble as popped in the very places where Privatopia boomed from 1999 to 2006 such as Underwater (nee "Fabulous") Las Vegas, they're likely to be just as inclined -- if not more so -- to require all new residential development be of the common interest variety.

Website lets homeowners track Vegas HOA fraud investigation - News - ReviewJournal.com

2011-12-27T14:21:00.001-06:00

Website lets homeowners track fraud investigation - News - ReviewJournal.com
Thanks to Shu Bartholomew for this link. The Department of Justice allows access to case information on the huge Las Vegas HOA fraud cases. Here is the link to the DOJ web site. Scroll down to "HOA Cases" and you will see a list of all the cases linked individually by the defendants' names.

Desert Underwater

2011-12-26T20:16:00.004-06:00

Las Vegas, used to decades of continuous building and growth, is now in the middle of an unprecedented housing crisis. With unemployment over 13 percent and thousands of homes underwater and going into foreclosure every month, Southern Nevadans are wondering how we can possibly find our way out of the worst economic predicament in the state's history.

----------------------
Las Vegas TV investigative reporter and Coast to Coast AM guest host George Knapp's series on the foreclosure-fueled implosion of the housing market of this region -- one of the most HOA dense in the nation.

Town concerned over condominiums’ serious fire-safety violations | recordonline.com

2011-12-26T19:14:00.000-06:00

Town concerned over condominiums’ serious fire-safety violations | recordonline.com
FALLSBURG — The Town of Fallsburg is pushing the Grandview Palace condominiums’ homeowners association to correct fire-safety violations so serious that town officials have weighed the option of condemning the 396-unit complex as unsafe.
Grandview representatives met Thursday with officials from the county, town and the Loch Sheldrake Fire Department to forge a plan to correct a number of unspecified violations, said Fallsburg Supervisor Steve Vegliante.
The hope is to avoid having to evacuate residents – a mix of owners and renters – at the development, which thrived in the famed Borscht Belt era as Brown’s Hotel before it was rescued from bankruptcy and converted into condos.
-----------------
This is another CID headed for the long dirt nap by the sound of this article. Thanks to Fred Pilot for the link.

Georgia sheriffs deputy orders HOA to unblock road

2011-12-26T11:56:00.005-06:00

Other incidents in the West Jackson area reported to the Jackson County Sheriff’s Office last week included:
•civil dispute at a Woods Creek Road, Jefferson, address, where two men from a homeowners association blocked access to a road because two dump trucks were driving through the subdivision. A man with the dump truck company said he had permission from Jackson County to use the road to dump dirt for another person, according to an incident report. A deputy told one of the men from the subdivision that if they didn’t move their vehicles, they would be towed for blocking a public road. The man was told to call the Jackson County Road Department of the commissioner’s office for questions.
-------------------
You boys gonna be in a heap o trouble if you don't unblock this here road right quick.

False Foreclosure? Occupy the Bank, Romney Says - NYTimes.com

2011-12-26T10:53:00.000-06:00

False Foreclosure? Occupy the Bank, Romney Says - NYTimes.com
ROMNEY: That might be something to go down to their office — big office in Boston — go sit in their front lobby and say ‘I’m gonna sit here until you sit down with me and look at these documents.”

PYRA: Occupy Bank of America?

ROMNEY: “Yeah, exactly. Yeah. If you are in the right, and you’ve got the documents to prove it, I’d go after them. The other thing you can do is file a suit against them.

PYRA: I can’t afford a lawyer, so –

ROMNEY: Ah, just file it in small claims court.
-------------------
The Mittster goes radical.

New-home sales up in Nov. but 2011 figures dismal

2011-12-24T09:54:00.000-06:00

News from The Associated Press
Americans bought slightly more new homes in November, but 2011 will likely end up as the worst year for sales in history.

The Commerce Department says new-home sales rose 1.6 percent last month to a seasonally adjusted annual rate of 315,000. That's less than half the 700,000 new homes that economists say should be sold to sustain a healthy housing market.

It's also below the 323,000 homes sold last year - the worst year for sales on records dating back to 1963.

Admitting failure, Florida Supreme Court ends foreclosure mediation program

2011-12-24T09:02:00.000-06:00

Admitting failure, Florida Supreme Court ends foreclosure mediation program
Florida's foreclosure crisis lives on, but a statewide mediation program for troubled borrowers is dead.

Florida Supreme Court Chief Justice Charles T. Canady issued an order Monday ending the effort to encourage lenders and borrowers to avoid foreclosure.

The program was a flop. Only 3.6 percent of cases referred to mediation statewide yielded a written agreement between the lender and homeowner. In Palm Beach County, which began its program in July 2010, a mere 1.6 percent of the 4,632 cases sent to mediation resulted in a written agreement.
----------------------
Mortgage foreclosure defense attorney Thomas Ice says: "It wasn't real mediation," Ice said. "It was a loan-mod opportunity which was often lost because of paperwork problems. You could never get the actual owner of the note at the table. At best, you could get the servicer on the phone."

HOA threatens to fine Wellington family for Christmas decorations

2011-12-23T09:39:00.002-06:00

WELLINGTON — Davin Armstrong is facing his own version of the Grinch this year: a homeowners association that wants to snuff out his Christmas decorations.

Armstrong, 35, and his wife, Amber Hersh, 34, have won the town of Wellington’s Christmas lights display two years in a row, but in June, his Buffalo Creek subdivision HOA passed a rule limiting the amount of permissible lawn ornaments to three, he said.

The HOA is now threatening to fine the family $25 every two weeks until they take the lights down, he said. His display, which has become a neighborhood favorite, exceeds the rule by more than 20.
------------------
Merry Christmas from Privatopia, where they're making a list and checking it twice.

The Fine Print Society

2011-12-22T20:13:00.000-06:00

As I go over all the bills and statements and announcements and changes to this or that plan or arrangement or contract that have flooded into my mailbox recently, it occurs to me that this is a form of concerted action. Corporate managers have collectively determined to overwhelm us with fine print. We can't possibly read all this crap, much less meditate like some 18th century aristocrat on the implications of the content. Yet we can't do so much as download an update to Adobe Acrobat without "signing" a contract. We are conclusively presumed to have read, understood, and agreed to every lawyer-drafted word, and yet everybody knows that none of us reads this. Not even Ron Paul--so don't start with me. And the more of these contracts we get, the less likely it is that we will read any of them. So corporations have an incentive to send more of them and make them longer and more verbose. This is a collective decision on their part, and it is working, and they know it.

Nearly all of this stuff is enforceable, as many an HOA or condo unit owner has discovered, and it makes citizens relatively powerless. The private logic of contact law structures the relationship as individual consumer vs. big corporation with government as the enforcer of the contract, instead of citizens vs. powerful private organizations, with government as policy maker holding jurisdiction over the relationship.

The law calls these boilerplate documents "contracts of adhesion," but the days are long past when judges were willing to throw them out because they were drafted by one party and imposed on the other, there was gross inequality of bargaining power, and there was no real assent to the terms. Now they are deemed essential to the free flow of modern commerce.

My view has always been that policy makers should be willing to step in and reform these relationships if they become predatory or destructive. But there is little stomach for that presently.

Ft. Lauderdale To Offer Homeless Free Rides Out Of Town « CBS Miami

2011-12-22T15:16:00.000-06:00

Ft. Lauderdale To Offer Homeless Free Rides Out Of Town « CBS Miami
On Tuesday, the city’s commission approved a $25,000 program which will buy them one-way bus tickets out of town. The program won’t cost taxpayers a dime. It’s being paid for by the Florida Law Enforcement Trust Fund, which is money confiscated from criminals.
---------------
Hey, how about a free visit to your relatives, on us. Just don't come back. The Christmas spirit is at work.

The Value(s) of Foreclosure Law Reform? - Credit Slips

2011-12-22T08:30:00.000-06:00

The Value(s) of Foreclosure Law Reform? - Credit Slips
...it seems impossible to treat foreclosure law as entirely distinct from broader questions of housing policy and community development. Incorporating these broader questions means asking about the shelter needs of foreclosure defendants, the disruption in education for kids in enrolled in public schools, and externalities such as neighbors' property values, declines in local tax revenues, and other community effects.
------------------
Law prof Melissa Jacoby is talking about mortgage foreclosure, but I think the same thing should be said about HOA/condo foreclosure. There is more at stake than bill collection.

Hovnanian Enterprises' CEO Discusses Q4 2011 Results - Earnings Call Transcript - Seeking Alpha

2011-12-20T20:34:00.000-06:00

Hovnanian Enterprises' CEO Discusses Q4 2011 Results - Earnings Call Transcript - Seeking Alpha
As you can see on Slide 6, we ended the year at 21.3 net contracts per community just slightly below the level of the past 2 years with a slower beginning of the year and a better ending. For each of the past 4 years, our average sales per community per year is up by more than 50%, compared to our historical normalized average pace of about 45 contracts per year.

These low absorption rates make it more challenging to return to profitability. Nonetheless, we believe we can achieve profitability before sales pays returns to normalized levels.
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Hovnanian Enterprises is a major builder of HOA-run subdivisions. On July 15, 2005, their stock peaked at $70.92 per share. Today it closed at $1.50 per share. The transcript from this presentation by CEO Ara Hovnanian is lengthy and detailed, but if you read it carefully you will get a sense of the total devastation that has hit the home building industry. Historically they sell 45 homes per year per subdivision. Last year they averaged 23.3 units sold per subdivision. And check out this sentence: "Our internal projections for the next 2 years assume no improvement in market conditions, so any comp line growth is driven by community count growth." This reminds me of the old joke that "we will lose money on every unit we sell, but we will make it up in volume."

Seattle cracks down on houseboat-like boats - seattlepi.com

2011-12-20T16:47:00.001-06:00

Seattle cracks down on houseboat-like boats - seattlepi.com
For months, the city has been updating its shoreline rules, guided by a policy that takes a dim view of living on water. It's believed that floating homes are bad for salmon and other aquatic life, and that they diminish public access to shorelines.

Already, the city has proposed a ban on new houseboats. But the latest draft would also ban new boats that masquerade as floating homes, and would impose some environmental rules on existing ones. That's causing angst among Seattle's eclectic community of liveaboards who bob on the city's lakes and bays.

Read more: http://www.seattlepi.com/local/article/Seattle-cracks-down-on-houseboat-like-boats-2400872.php#ixzz1h7M5RFDu

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This is a bit arcane for me. I never saw "Sleepless in Seattle." There seem to be differences between "house barges" and "floating homes." Thanks to Mystery Reader, who also helpfully supplied this irreverent blog post that explains it.

Knobley Estates president demands apology from sheriff - Ripley, WV - Jackson Newspapers

2011-12-20T07:45:00.000-06:00

Knobley Estates president demands apology from sheriff - Ripley, WV - Jackson Newspapers
Folmer is employed at the Western Maryland Correctional Institute in Cresaptown. Since he was elected president of the homeowners association last spring, there has been some discord among residents of the subdivision located near Ridgeley who have disagreed on several issues, including a ban on school buses entering the subdivision to pick up children.
Tuesday, Fraley explained to the commission that he had been told by some of the residents that Folmer was “wearing his uniform around to intimidate people,” and he had simply called the prison to inquire about the policy for wearing uniforms during off-duty hours.
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Shu Bartholomew sent this link to a slice of life. Moral of the story: do you really want to elect a prison guard president of the HOA? Just a thought.

Property Manager Pleads Guilty to Stealing Condo Association Fees - Freehold, NJ Patch

2011-12-20T07:41:00.000-06:00

Property Manager Pleads Guilty to Stealing Condo Association Fees - Freehold, NJ Patch
An Oakhurst woman pleaded to guilty to embezzling over $400,000 from a Freehold Township homeowners association, according to a press release from the Monmouth County Prosecutor’s Office.

Theresa Tierney, 60, entered the guilty plea Thursday before Monmouth County Superior Court Judge Richard W. English.

Tierney was the property manager at Strickland Farms Condominiums when she stole the funds, prosecutors said.
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Yet another one of those "isolated examples" of property manager embezzlement. Thanks to Shu Bartholomew for the link and the holiday wishes.

Madigan sues 3 local firms over mortgage modifications - chicagotribune.com

2011-12-20T07:06:00.001-06:00

Madigan sues 3 local firms over mortgage modifications - chicagotribune.com
The state attorney general's office filed suit Monday against three Chicago-area firms and their principals who allegedly operated mortgage rescue schemes that conned homeowners out of more than $44,000 in upfront fees and provided them with little or no help.

The cases share many similarities, including preying on consumers for whom English is a second language, collecting upfront fees and telling consumers to ignore any mail sent to them by their mortgage companies.

In Illinois, it is illegal to charge consumers upfront fees for loan modification services not yet provided. In at least one of the cases, a homeowner lost his home to foreclosure as a result of the purported fraud.
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Thanks to Brian White for the link. Mortgage rescue fraud has been rampant since 2007 and some of their practices, including these up-front fees, are blatantly illegal. But is a total of 50 suits, with 28 injunctions, enough?

Palos Verdes Estates HOA Wants $200 For Solar Panel Sign-Off

2011-12-19T23:23:00.001-06:00

We've got all the makings of a classic NIMBY tale down in the Palos Verdes Estates, where a snooty homeowners association is doing battle with a tenacious solar panel peddler. Bradley Bartz owns ABC Solar, and he objects to the policies of the "quasi-governmental" Palos Verdes Homes Association ("considered by many to be stodgy"), which require a $200 fee and a review by the architects of the "infamously fussy art jury" for any homeowner who wants to install solar panels on his house, reports the Daily Breeze.
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Sunlight may be free. But capturing it costs in Privatopia.