Associations should be on the warpath

 Here is an article reprinted from the above organization, news brief that comes in email--I suggest that if you are concerned about homeowner associations that you sign up for their list and become a member of their site--although from California, many laws are the same and this is the BEST homeowner rights organization in  the country.
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You think the association  together with its debt collector  can't take your house because you fell behind a couple months on assessments?

Wrong.

How about the homeowner association that got the owner's house last year for $5500 bucks?  The bulk of this figure isn't assessments: it's collection costs racked up by the debt collector.

Take a look at the documents posted on the CCHAL website: the payment plan the debt collector forced on the homeowner and then the documents recorded at the county recorder showing that the HOMEOWNER ASSOCIATION got the house for $5500 at the trustee sale.  The HOA now has title to the property.

Here's the CCHAL link: http://www.calhomelaw.org/PDF/HOA%20foreclosure.pdf

First of all: the so-called payment plan breaks existing law.  It says that, when the homeowner makes a payment, the debt collector will use it to pay himself  not to pay down the assessments owed.    After that, payments go to legal fees; after that management fees.  After THAT, the assessments get paid.

EXISTING law (Civil Code 1367(a) is very protective of BOTH the homeowner and the association.  EXISTING law says ASSESSMENTS ARE TO BE PAID DOWN FIRST  AND IN FULL. Collection costs are to be paid last.

After all, the whole idea of hiring the debt collector is to get the association its assessments  RIGHT?

So -- when exactly does the ASSOCIATION get paid?  The payment plan says assessments are paid LAST.

Associations should be on the warpath over these payment plans  and why AREN'T they? Is that why the association has the winning bid at the auction?  So it can take title to the property and then flip the home?  Or what…? And how did the HOA come up with $5500?  Did it pull it out of reserves or out of somebody's pocket?

Debt collectors and the association industry are in a FRENZY over AB 2502/Brownley.  Why?  Because it hits them in their wallets.

Somebody -- we can't imagine who -- has a nice scam going: forcing the homeowner into an unaffordable payment plan while holding the home hostage.  Then foreclosing on the home with the association buying it at a fire sale price.

The debt collectors and the association industry are calling AB 2502 the worst bill of the century.

We call it one of the best bills of the century: one that protects both homeowners AND associations.  The associations should be in total support of AB 2502. But they aren't.

Yesterday we were at the Capitol talking to members of the Housing Committee where the bill is to be heard next week.

CCHAL NewsBrief
April 21, 2010