About that lawsuit against 500 NV HOA's

There is currently a report in the news section of this forum about a lawsuit against something like 500 HOA's in Nevada. The HOA's are accused of overcharging Fannie Mae and Freddie Mac for unpaid assessments on foreclosed properties.

If one reads the news account, one is left with the impression that the federal government is suing these HOA's. This is not the case. Two attorneys who are also realtors are suing under the federal false claims act. This allows them to sue on behalf of the government and collect their fees from whatever they win. It appears that they have named every HOA in Nevada as a defendant without any real evidence to support their claims. My guess would be that many HOA's will pay them a few thousand dollars to just go away rather than pay many thousands of dollars to fight this in court.

You gotta feel sorry for those who live in HOA's in Nevada. In the past few years they have been swindled out of millions by a greedy lawyer filing bogus construction defect claims and now they are being preyed upon once again by even more lawyers. It just does not stop for those people.

Click here to read the actual lawsuit. It's 85 pages long.

I've heard bits and pieces about the HOA mess in Nevada. As I understand it, the HOAs were foreclosing on homeowners for not paying assessments, and as part of their procedure, they'd turn the account over to a collection agency. Many of these homes were then purchased by investors, who would be told they had to satisfy the HOA lien and, of course, pay the collection agencies their fees, which they claimed were excessive.

Another problem is the banks foreclose, but don't take title on the house because they'd be responsible for HOA fees after that date. So, the house sits and sits for months before someone buys it and then the bank pays off the HOA In the meantime, the fees that accumulated before foreclosure remain unpaid and the HOA ends up writing that off. All the while maintenance costs continue to increase - leaving the homeowners who do pay with highter fees because they have to subsidize the non-payers.

The entire mess is the result of greed, greed and more greed. The investors are honked off because they thought they were getting a valuable house at a steal (some of whom will then rent it out to people who may or may not take care of the property), the banks don't give a hoot as long as THEY get their money, the HOA's pissed because no one's paying them and they have to take care of the property anyway - otherwise everyone's property values will go in the toilet.

Glen:

I do not work in the legal profession. I learned to represent myself because I could not afford to hire a lawyer.

As I was doing the original post I was thinking of Shakespeare and how right he was.