What has caused the majority of forclosures in your HOA and what % of them have occured?

Our HOA keeps a running tab of units in foreclosure due to that the majority of them owe many months worth of dues...

What the majority of our units have foreclosed not because of a loss of job ( although that has happened ) it's because of living beyond means, taking 2nd's out to pay bills, etc. I know my neghbors and really the majority of the one's who have lost their home drive luxury cars, wear designer clothes.. and live in a neighborhood where the medium income for a family of 4 is 50K annually. Many of my neighbors who are not here anymore simply could not pay bills... but still had the same jobs they did when they moved in. One family who is losing thier home to bank auction..drives late model mercedes, mom and dad work and mom just had another baby. They are due to move out this week....

Our HOA is suffering from a 10-11% LOSS in forclosures.

The majority of these loses are not those who lost jobs, now have ARM Mortgage, but over extended themselves.. clearly.

We have $21,000 in outstanding dues, as of Nov. 08.

$15,000 is from foreclosured homes, some bank-owned homes, some in limbo.

Due to: who knows?? I know MANY people re-mortgaged several times, or paid inflated prices for their homes, ARM's that went up, or lost their jobs, or divorced. Some just put the keys in the mailbox and left the state.

Since the water is turned off in the above memtioned homes, we WILL get the money, but just when is the problem.

The other funds are from people trying to make payments, but some have ignored the board's plea for SOME kind of payment plan. Our dues are $750 per year. That includes our own water system for 250 homes, complete juridiction and care for 5 miles of roads, beach, community center and 12 bridges over canals. Our annual budget is only $70,000 per year, and the rest goes into the Reserve Fund.

Francesca, you seem happy about that…

No matter what these people did to lose their home, which is none of your business, the fact that you are happy about the reasons, you presume are the cause, is just plain mean.

You don’t know the situation, just because they drive luxury cars, which again is none of your business, doesn’t mean that is the reason they are losing their home.

I hope if you ever have something this devastating happen to you that you get compassion instead of self-righteousness. Like you said they are up to date on their homes, so they are trying...

Everyone is a little tight on money these days and need patience and understanding.

I agree with Michelle that Francesca did not appear to be gloating over the hardships of those being foreclosed in her HOA. This thread reminds me of something I saw just the other day written on a license plate holder: "I want everything, and I want it now!" The car was being driven by a young gal, 30ish in age. IMO, this plate holder needs another line saying, "and I'm not going to pay for it!!" This seems to be the mindset of far too many young people nowadays. Take out a mortgage you can't pay; charge everything on credit cards and only make the minimum payment, if that; live for today, don't worry about tomorrow, etc., etc. Certainly not the way I was brought up!

Michael, I would assume that Francesca was trying to find out what hardships the HOA’s are having as well except, that she gave specific example as to why she thinks some people are delinquent which to me sounds judgmental. She could have asked, “Are foreclosures in your area causing hardship to your HOA funds?”

I understand that I am judging Francesca as I feel she is judging her neighbors and neither is right and it’s the holiday season and I should be nice, so I apologize for making judgments.

Robert,

I don't think there is much the assn can do when a member is delinquent in assessments and their home is being foreclosed by the bank. As our PM stated, it costs more to take legal action than the assn could hope to recover. Also, if their home is being foreclosed by the bank they are in financial trouble so where do they get the extra money for assessments? Best to just budget for bad debts and write-off the delinquent assessments. It's doubtful they will be recovered as a result of the foreclosure proceedings.

Kim, just as an FYI, it's "Michele" (female) and not "Michael" (male). No biggee, just wanted to clear that up.

Robert, I think Mary is speaking in pragmatic terms, not spiritual ones.

At some point the board has to make the decision if it is costing the association more money to recover the bad debt than it is to dismiss it.

It has nothing to do with whether the "regime" is "owed" money or the "association" is "owed" money, since they are, as you noted, effectively one and the same.

And for the board, as representatives of the association and executors of day-to-day operating decisions, bad debt recovery is one of many things on their to-do or decision list.

It would be foolish to have the entire association vote on whether to pursue every single collection individually.

We have been at that cross-roads a time or two over the last 12+ years.

I can think of only 3 debts we have "written off" as uncollectible in that time, but to have pursued each one would have had to had spent almost double what was owed to attempt to collect it. That just doesn't make good business sense and there is no way we could justify that to the membership.

Does that me we sit on our collective rears and just let the debt get to an uncollectible point and then say, "oh well. . ."?

No, of course not. We take each and every debt through the entire process. But in the end, if the payment isn't forthcoming and further action to attempt it is more costly than what is owed, we have to make that call.

Naturally, as is probably evident, that would mean evaluating each arrears on its own circumstances.

So, unless your governing documents mandate collection attempts for each outstanding debt to be forced into the highest legal option for collection, regardless of the cost to the association, then at some point all HOAs will be having to make a decision like that at some point.

You can call it "debt forgiveness" if you want. But if that makes you feel like you are making a subjective judgment akin to a religious absolution about a debtor, than call it something else.

J

I thank you for your apology. But I truely don't think that I meant to come across as gloating or sound mean in any way. It's tough financially for everyone at this time even for me who is up to payment on her dues. Seriiously, I was just curious what other foreclosure rates are looking like amongst other areas. Since we have a nationwide samipling her I thought I would just ask.
For the record, the neighbors that I know who were having financial issues actually spoke to me personally about their situaiton. Giving that I am on the board, many neighbors feels that they can speak to me for advice or how to communicate with our pm or hoa. Many have set up payment plans and were terrified to make the first call to our pm.

So please don't react to posts like I placed personally. It has not personally "vendetta" at all.

Again sorry! If you want to know how our complex is doing, our condo's value has lost 50%. So we owe $300K on our condo and others just like it are selling for $150K, or less if they are bank owned. Our neighbors downstairs have had their condo up for sale for over a year at $199k and no one has bought it. They actually moved out a few months ago...and it's still vacant.

As for dues, I think it was in July that I looked last and 119 homes out of 160 were delinquent with their HOA dues...that's $26K a month, give or take. So I guess I reacted bad because this is a touchy subject for most people.

I hope you have a Merry Christmas and a great New Year and let's hope next year is better for all of us.

We just moved into our House in Sept. I am just finding out that the HOA is owed $212K in past dues. So, in order to make up he losss the Board, who is controlled by the builder, has made cuts. like no more police patrol for neighborhood, closing 3 of the comm. pools, etc. But at the same time, our dues are going from $489 to $652 (a 25% increase) My question IS THIS LEGAL?? A 25% RAISE IN ONE YEAR??!! So the ones that could not afford last year, still cant afford and those who can have to make up for the others?? DOES ANYONE KNOW IF THIS IS LEGAL?? If so, please email me at [email protected] Thank you and Happy Holidays.

Have never been given copy of HOA Regs and even though I have requested serveral times, still have not been able to get a copy. Is that Legal??

Typically, the docs are included with your closing papers (though often ignored during the process). Assuming the HOA will not deliver...Do you have a Property Manager? They'd have a copy. Your neighbors might have a copy. Your State and/or County Recorder probably have a copy. Check those sources.

Kim,
As an old man who should not be giving advice because I am no model of success, I feel compelled to say this.

Sometimes in life we just get too much on our plate at once. You are, no doubt, a smart intelligent lady, very articulate and must have a lot on the ball. All these things will help you and guide you. With the Holidays and all that brings, more is piled on you. Step back, take a breather from all these problems, time to think of family and friends, futures, and children's laughter and snide little giggles. Time to slow down and build up for your trials ahead. I speak for all when I say you have captured all of us in some way. You seem that kind of person, you are among kindred souls here. If it helps, please, lets us know how you are doing and you don't have to join the fray, save that for later. My best wishes for the Holidays and your future ahead.

Sorry JohnK3, what I meant to say in the first line of my post was “incorrect” not the word “correct”.

Robert when I purchased in MD docs were given to me at the signing of the AOS and the same in SC but with no power of rescinding the contract, that I recall, by the Buyer in either MD or SC.

In looking at the latest batch of delinquencies, it appears the mortgage company initiated the foreclosure on about 7 homes. One person went chapter 13, so right now, we're collecting pennies on the dollar (but at least SOMETHING's coming in), two or three are clearly deadbeats and we're foreclosing on them next year and the rest have had various financial problems, but have signed payment plans.

I suspect living way beyond one's means is part of the issue, but don't know for certain because Indiana HAS had a number of job losses in the last five yeras.

This is a timely question, because I'm treasurer of my HOA and this is a question I recently put to our association attorney and property manager. My top priority for next year is to do a complete review of our collection policies and procedures because I think there are a number of areas where we can improve. One thing I'd like to do is to put some minimum requirements on payment plans (e.g. the homeowner MUST pay at least $115 a month instead of $25 or $50). As much as I like our attorney, I'm thinking we need to move this part of the business to another firm with a better sucess rate and more resources (we'll keep the current attorney for other Association business)

Robert, I'll take a stab at this. When an H/O gets to the foreclosure stage, they've bypassed the friendly notices, the not so friendly notices and the lien. A lien in most places doesn't mean you're going to get anything unless the owner has a voluntary sale. When it gets to this point I personally want them gone, the Association is going to loose money on the deal no matter what and I would rather have an empty unit that the new buyer is responsible to pay assessments going forward than the deadbeats living there, using the Association as an interest free loan that they don't have to pay back.

RobertR1, that's the big question - what to do if we foreclose on the property? You're right in that if we take the house, we have to pay the mortgage, property taxes AND the fees until someone buys the house. All of that takes money, which we don't have (because so many aren't paying fees!)

It's a vicious cycle. If I knew the house was being rented, I'd prefer to get a garnishment and have the renter pay us. However, as you said, that gets tricky because a court can authorize this, but in Indiana, some sort of notice is then sent to the renter and he or she has to sign it in order for the garnishment to work. If they don't sign, we're back to square one.

The suggestion about taking some of the accounts back from the attorney and working out a payment plan sounds interesting, but frankly, I'm somewhat reluctant because if someone let things escalate to where we have to call in an attorney, what type of assurances do we have that owner will finally cooperate?

I am checking to see if someone from our local consumer credit counseling service could come out to a meeting one evening and talk to people about their services - some of these homeowners want to get by with payments of $50 or less, which I don't think we should accept at all unless a third party negotiator told us that's the best the person can do.

Glen and Shelia,
Thank you both. Your responses are the kind of stuff the folks that post here are looking for hands on day to day operation of a very seriouis problem happening right now. Our condo has skated by so far, but we have had the experience in the past. I am trying to beat the drum to the Board, theat they should have in place a committee selected to handle the process. Certainly our M.O. of turning it over to the Manager to arbitrate is suspect.

Glen, semantic maybe but you all don't foreclose, you are a vested part at a foreclosure IF you have a lien. Would you agree?

Shelia,
Tell us a little about your experience buying a property that you foreclosed on? I feel that is not the way to go for us but could well work for some folks. Is their a discusion that could be made for in a case of a personal owner buying a foreclosed property that concessions could be worked out. After all a owner with a proven history would be a better pick than an investor looking to go cheap or cheapest. How did your purchase end up Shelia?

We three seem to be night owls. I have a caretaker night duty with my wife so I am up a lot during the night.

KimM8 said:
(California)
Posts:72
12/24/2008 4:09 PM

Dwight, in my state of CA they actually cut all state job's pay back to minimum wage because of our deficit...I think that is over now, but it was like that for a few months and that was after they cut some jobs.

Unemployement everywhere is running dry because there are so many people unemployed and not enough funding, some states are having to borrow money from the fed's to support this. Pay raises can't keep up with inflation and everyone is hurting. In a local city they are actually cutting fire and police jobs. My husband who is a police officer almost had the same thing happen to his department because the people didn't want a 1% tax increase. That's, what $1 for every $100 spent...

Next month I am having brain surgery at the age of 26, I will be out of work for at least six weeks and will lose about $1500 of pay during that time. Hopefully I won't be out of work longer then that, because then things will really be tight...

Life happens and unfortunately not everyone is prepared.
_______________________________________________________________
RobertR1 said:
(South Carolina)
Posts:2421
12/24/2008 10:48 PM

Kim,
As an old man who should not be giving advice because I am no model of success, I feel compelled to say this.

Sometimes in life we just get too much on our plate at once. You are, no doubt, a smart intelligent lady, very articulate and must have a lot on the ball. All these things will help you and guide you. With the Holidays and all that brings, more is piled on you. Step back, take a breather from all these problems, time to think of family and friends, futures, and children's laughter and snide little giggles. Time to slow down and build up for your trials ahead. I speak for all when I say you have captured all of us in some way. You seem that kind of person, you are among kindred souls here. If it helps, please, lets us know how you are doing and you don't have to join the fray, save that for later. My best wishes for the Holidays and your future ahead.
___________________________________________________________________________

Hi Kim,

Your statement about your upcoming surgery caught my attention. I had brain surgery a year ago this month to remove a rather large benign tumor (my surgeon said it had been growing ~8 years given its size – imagine that, is what I thought! I couldn’t quite fathom it being there all of that time). I echo Robert’s advice to take a breather, slow down, and focus on what is important – you, family, friends, faith. And, take some time to have fun! From your postings, I sense that you have many qualities that will help you through this (strength of character, commitment). I learned a lot from my experience, especially what is important in life. If you would like to “talk”, please send me an email at: [email protected]

I send you my best wishes and prayers for a successful surgery and speedy recovery,
Bonnie

Hi Kim,

Thank you for your response! When you wrote you were going to have brain surgery, I assumed you likely had a tumor. I am very sorry to hear of your medical conditions. I take it that your surgery will be to address the Chiari Malformation (I looked it up on the Mayo Clinic web site)?

Based on the reaction of the people I know, though, brain surgery can be scary. My approach has always been to gather information, the facts – the more you know, the better able you are to cope with and plan for, and it becomes less scary. I wanted to let you know that brain surgery does not need to be “scary”, and if there was anything from my experiences with the surgery and recovery, that I was/am available to talk to – my offer remains, including during your recovery.

I agree with what you wrote….life and those we love/who love us are precious, and I am grateful for all of the blessings that have come to me.

Take care….and let us posted on how you are doing,
Bonnie

KimMB,
Isn't it nice to be up when all is asleep or hung over (done that) at this time. I do enjoy my quiet time during the nights but sure wish I was asleep, Just some caretaker duties on my end, and some sore muscles from working ut in gym. In a strange way those of us that can't sleep are given the opportunity to reflect and go to special places, something you can't do when you are asleep. I heard some off hand remark that has stuck with me over the years and so far it has helped me at times. "God never made a rock we couldn't lift." I think that is true.

Down deep, only you call the shots. It can't be any other way. I also remember another casual remark when faced with a long rehabilitation for my wife. In the rehab center full of folks with all kinds of problems and all kinds of special people, during a discussion group of all the difficulties encountered, a therapist concluded the conversation with, "well folks. it's all therapy."
Today we still use that around the house.

Francesca,
I agree completely this is not the forum for this kind of personal exchange. I never indicated it was, and probably by tomorrow this thread will have slid down the message board and will be no more.

However, looking at the number of postings this site generates I doubt very seriously a couple of personal messages is going to upset anyone. If there seems to be a trend to turn this into a "text chat room," we have handled it up to this point.

Francesca,
If it's not broke.......don't try and fix it.