They Faced Foreclosure Not From Their Mortgage Lender, but From Their HOA

[Nevilledog]

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Charles Ornstein
@charlesornstein
While most homeowners associations refrain from the “last resort” of foreclosing on residents, some Colorado communities have moved time and again to take members’ homes. https://propublica.org/article/they-faced-foreclosure-not-from-their-mortgage-lender-but-from-their-hoa… @rmpbs

propublica.org
They Faced Foreclosure Not From Their Mortgage Lender, but From Their HOA
While most homeowners associations refrain from the “last resort” of foreclosing on residents, some Colorado communities have moved time and again to take members’ homes.
11:58 AM · Apr 7, 2022

https://www.propublica.org/article/they-faced-foreclosure-not-from-their-mortgage-lender-but-from-their-hoa

In a year when it felt like everything had gone wrong, a knock at Miesha Ross’ door one December day brought more bad news.

“There was a process server who came and knocked on my door and served me with a foreclosure notice,” Ross said, “and of course I freaked out.”

Ross had already had a string of bad luck in 2017 — a car wreck and a period of unpaid maternity leave after the birth of her third child left her struggling to pay the bills. She said she worked with most of her creditors to catch up. Getting served with a foreclosure case that day caught her by surprise.

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“I’m like, ‘OK, I worked something out with the mortgage company,’ and that’s who I would think would be able to foreclose,” Ross said. Instead, the notice was from her homeowners association, the group that takes care of the upkeep of her community of townhomes.

“I had no idea that an HOA could foreclose on you.”

*snip*

[DURHAM D]

1. Real estate agents don't tell buyers the truth.

They don't want to lose a sell.

Also, the agents are not well trained regarding shared interest communities. The agents and even closing attorneys embrace ignorance re: HOAs.

[Demovictory9]

20. it's in the HOA documents.

[DURHAM D]

25. Real estate agents don't read them.

Unit owners don't share them. Nobody talks about the governing documents. In most states it is not even a requirement that buyers receive a copy at closing or before.

[Demovictory9]

27. In calif we get them during escrow process.

I read every single word

[Caliman73]

29. True. It is law in CA to disclose EVERYTHING about a property...

Including the HOA governing documents.

I am surprised (but not really) that this is not standard in other States. HOAs can be incredibly powerful and when you sign to buy the home, you sign to abide by the HOAs rules too.

[Calista241]

37. There, almost certainly, is a signed document in his mortgage package that covers the HOA laws.

If there is, then it was disclosed. When I signed my mortgage 14 years ago, I signed 100+ documents that day, and my hand hurt like hell.

[gldstwmn]

33. Have you ever seen a copy of the CCR's for an HOA? Most would find them excellent bed time

reading material. People that buy homes with an HOA should definitely know what's in them though.

[melm00se]

34. every house I have bought

with an HOA came with either a binder of the covenants or a link to a downloadable version. All houses have a check box indicating HOA yes or no.

My attorney says that they are a PITA to read and digest but read and digest them you must otherwise you will get bit on the ass.

If you don't want to live where an HOA is then, amazingly, don't buy there.

[gldstwmn]

32. That doesn't make it legal.

[marybourg]

2. If a member doesn't pay, everyone else must pay more. The dues go

to insurance, water, sewer, roof repair and replacement, exterior painting, landscape maintenance, pest control, etc., etc. Remember the condo collapse in FL?

[I_UndergroundPanther]

3. I would never ever buy a house

With an hoa. Ever.

A bunch of busybody assholes cant tell me what to do with what I own. If I want rainbow curtains and paint my house purple,If I am not hurting the environment,not creating a hazard ,like leaving trash out for rats or hoarding, or creating a genuine nusiance
Than stfu. Dont like it,don't look..and Get off my lawn,asshole.

[dixiechiken1]

4. This ☝️☝️☝️

[madville]

13. Yep

I’ve owned three houses, none in an HOA. If I want to have a huge garden or a chicken coop, I can, the neighbors have zero say in what I can do on my property.

[melm00se]

35. Unless, of course, the property is zoned

prohibiting them.

[NutmegYankee]

17. Totally agree.

It helps I live in the US region with the least number of homes in an HOA.

[marybourg]

19. And I would never buy one without it.

Trash cans left out all week, cars on blocks., bass thumping all night, basketballs thwacking backboards until 11 p.m. Yard full of trash furniture. No thanks.

[Caliman73]

30. I've lived in both. Pros and Cons.

I would HATE to live next door to a neighbor who just all of a sudden put a large dirty noisy chicken coop in their back yard without considering how it would affect the enjoyment of my property.

I do understand though, the irritation at not being able to make even the slightest of modifications on your property without having to clear it through a committee of busybodies.

Fortunately, where I own now, the HOA is not super nosy. Just had our annual meeting. Had to let them know about dog owners who just love to bring their dogs to defecate on your lawn and don't pick it up. They are sending out a letter and will fine those owners if we can track them back to their property.

[gldstwmn]

36. I live in a nice, quiet neighborhood with a lake and hiking trails

and guess what? No HOA. There aren't any of those other things you mentioned going on either.

[llmart]

49. The township or city ordinances would take care of most of those things.

I've owned four houses. The one I own now is the first one with an HOA. How well the HOA is handled depends entirely on the quality and involvement of the Board members. My HOA board is fairly ineffectual. In fact, I know more about the rules and regulations than they do.

There are pros and cons for both, but in my experience I'd rather not have an HOA.

[Demovictory9]

21. I live in an HOA... there are some benefits... don't have to deal with loud unruly neighbors

HOA cracks down on bad behavior. I don't have to worry about my neighbor painting her house purple.. hoa controls outside.

[DSandra]

28. Cities can be as much of an a**hole as HOA's

Cities I know of in California can dictate to you what colors you can paint your house, what you can or can't build on your property, etc....

However, it's one less bill plus there's more recourse when it comes to government than a small group of people.

[llmart]

50. That's how I feel about it.

You probably have a better chance of getting results from a government body since they are elected, especially when they're running for reelection.

[Calista241]

42. I live in a small keyhole neighborhood with 12 homes, and we have an HOA.

The HOA pays for all the yard maintenance, water, trash and recycle collection, and the HOA will eventually be responsible for replacing the road when it needs to be done. We have a nest egg of cash in the bank that will eventually cover those expenses. I'm willing to pay the HOA feeds to remove all that headache.

[Mariana]

56. Some years ago when I lived in Texas

there was a bad drought and the municipalities in the area all laid down some pretty severe outdoor watering restrictions, with heavy fines for violations. The lawns went dormant and turned brown, no big deal, that's what they do to survive dry spells. So what happened to the people whose HOA's required them to maintain a green lawn? Why, they got penalties laid on them by the HOA's. So many HOA's did this that the state actually passed a law to prohibit them from punishing residents who obey the law and conserve water during a drought.

[I_UndergroundPanther]

5. I would never ever buy a house

With an hoa. Ever.

A bunch of busybody assholes cant tell me what to do with what I own. If I want rainbow curtains and paint my house purple,If I am not hurting the environment,not creating a hazard ,like leaving trash out for rats or hoarding, or creating a genuine nusiance
Than stfu. Dont like it,don't look..and Get off my lawn,asshole.


Hoas need to be outlawed.

They should not be allowed to sell someones home over fees.

Hoas should not exist. Neighborhoods looked nice before hoas.

Thats my opinion.

[Goodheart]

8. "Hoas need to be outlawed."

Don't be silly.

If you don't want to be an HOA member that's perfectly fine. Everybody here is quite happy with ours.

[I_UndergroundPanther]

10. Ok

Good for you.

I cant even stand the concept of an hoa.
If I wanted a pool in my yard I would save up and put one in.I would hire local people looking to make money mowing lawns rather than an outfit like tru green which does not always treat its employees well. My roommate worked for true green and after what he went through they'll never get a penny from me.

I dont care if a neighbor has mary statues all over thier lawn as long as it isnt causing an actual hazard who cares? To me it makes a neighborhood cooler when people can make thier houses unique. Hoas always have the most boring uniform conservative demands in house decoration.

That is how it was before hoas. You had choices. Or at least more choices were avaliable. I prefer to have choices rather than hoa bullshit rules. But thats just me.

[llmart]

52. "Hoas always have the most boring uniform conservative demands in house decoration."

Every house in my neighborhood has to be beige. You get two choices for roof color. Beige or tan.

I think overall most people don't/won't go completely whackadoodle and paint their house purple or orange because most people know it affects their property value, but do they all have to be beige? Why not white with black shutters? Or greyish? Want to own a dog that weighs 25 lbs? Every person that lives in my sub has a little yappy white dog. They're more of a nuisance than my 55 lb. husky mix was (she's gone now and no, we didn't have a restriction on size, but most do). My favorite rule in our HOA's documents is "You cannot shake your throw rugs outside." I kid you not. Meanwhile there is no rule or regulation on what kind of a tree you can plant on your postage stamp sized yard so people planted trees that got to be 80 and whose root systems run into the neighbors' yards and foundations.

An HOA is only as effective as the people running them and enforcing the regulations and those people change often because it's a thankless job and strictly volunteer.

[gldstwmn]

39. If there are pools, golf courses or tennis courts then I can see a monthly

maintenance fee for the upkeep of those things. But I don't want to deal with an HOA.

[Goodheart]

6. As a member of a HOA I entirely approve of enforcement of dues

Sorry, Miesha. Life can suck hard sometimes.

[ck4829]

11. It isn't life doing that, it's that HOA

That knock at the door marked the start of a four-year legal fight between Ross and the Timbers Homeowners Association I Inc., which governs a complex of 394 units in Aurora, southeast of Denver.

Ross, a single mother, filed for bankruptcy twice, in 2017 and 2019, to try to catch up on her debt to the Timbers and save her home. She has since paid more than $5,600 to cover the HOA’s legal fees, an expense the association is allowed to pass on to members. She has worked to keep up on her monthly HOA dues, though a few times she was late. The association’s attorney recently filed a motion to have her bankruptcy dismissed, saying she has not made timely payments. Ross is fighting back, asking a judge to declare she has paid enough.

“I can understand if I wasn’t making any payments at all and just refused to pay,” Ross said. “I’m paying, and you’re still coming after me.”

https://www.propublica.org/article/they-faced-foreclosure-not-from-their-mortgage-lender-but-from-their-hoa

The power has gone to their heads.

[Goodheart]

14. I'm sorry, but the HOA looks out for its members.

If Ms. Ross can't make the payments she should sell. You might think that the HOA is being unfair to her, but the real situation is that she's being unfair to all the other members who make their payments on time. This is what she contracted for.

[flvegan]

7. This is very common in Florida, maybe not so in Colorado.

Once a lien is filed for past due assessments/dues, an HOA has to file a foreclosure action within five years or the lien expires. A condo association is further limited to filing within one year. Again, in Florida.

Fun FL fact: it's not terribly uncommon for a property to have more than one HOA. It's not unheard of to have 3 or 4.

Not my cup of tea, but to each his/her own.

[melm00se]

40. My condo in

FL and my home(s) in NC each had multiples.

A "master" HOA
A "community" HOA
A "neighborhood" HOA

the master covered all of the public groundskeeping upkeep, maintenance etc.
the community covered the pool(s) and clubhouse(s) that were accessible to only members of the community and the drive around security folks.
the neighborhood one covered the open "park" lots that were used by people in the neighborhood.

the middle one was the most expensive of the bunch.

[flvegan]

44. Judicial f/c, true. Not sure your point.

I was simply pointing out that in some areas, like Florida, an HOA f/c is quite common.

FWIW, since you mentioned it, if you think the "homestead law" (which I'm guessing is something to do with Article X of our Constitution) slows down a f/c (mortgage or HOA lien), it doesn't.

[flvegan]

47. Uh huh.

Please note, the case with OJ was a JUDGMENT not a mortgage or an HOA lien. Now, as to your OJ point, you're correct. HX property is exempt from forced sale for a civil judgment. Completely different kind of lien, but you knew that I'm sure.

To be clear, you're suggesting that a mortgage foreclosure (I'm assuming that's what you processed for a living) in Florida takes 5 years to complete because of Article X, and mortgage lenders are "hesitant to bring" a foreclose on Florida property because of it?

[Zeitghost]

9. I'm sure it varies

But in the townhome I used to own, I basically owned the interior surfaces and space within the building, the HOA owned the exterior and grounds, including the dirt my stuff sat on. Pipe breaks inside the house, it's my problem, pipe breaks just outside my front door, it's the HOA's issue, even if that pipe only services my home. HOA had a significant budget including grounds upkeep, pool upkeep, property taxes, pest control, security, constant painting and trim work that was all needed yearly. Then there were the big long term expenses like new roofs and paving projects.

When you choose to live in a communal ownership situation, you can't expect your neighbors to shoulder your share of the burden any more than you would in a normal neighborhood. They all have their own financial burdens to deal with. It seems they also gave her quite a bit of time. The article mentions getting served in December, presumably 12/21 and her financial issues started in 2017. I feel badly for the owner, but 3-4 years is enough time to recognize your issues and downsize appropriately to meet a realistic budget.

[Goodheart]

16. I live in a condo development with an HOA and dues. Absolutely love it.

I don't have to worry about exterior maintenance, lawn cutting, pest control, building insurance, etc. Started this lifestyle at age 53... just the perfect time for me.

[Zeitghost]

18. It worked well for me as well

At that stage of my life. I wanted some equity but didn't want to be on the hook for a lot of those maintenance issues. Win win.

[Celerity]

23. just like anything in life, there are good ones and there bad ones

It is the same here in Sweden, some of the bostadsrättsstyrelser (condo boards) are run by a few batshit cray power mad berks, and others are very hands off. Ours is great, and my wife was nominated to, and now sits on it after the president met us and wanted one of us to serve on it.

My co-worker, on the other hand, had an absolute nightmare for years with his, and just last autumn finally won a 5+ year court battle (going on before we even move here) against 2 of the board power players, elderly pensioners. One them is close to the nastiest Swede I have even personally known (she came in his apartment when he had a party for the team we oversee after a major deal closed). I never met the man, other than he said hello outside the courtroom and said we (wifey was with me) were such pretty girls and wondered if we wanted to meet his grandsons (eye roll). The two of them (board members, not the grandsons, lol) got sacked from all positions they had to do with board, and they had to pay all my co-worker's court fees.

[bottomofthehill]

12. Sometimes it's just best to sell

Get out from under the debt and start over.

[gldstwmn]

43. The median price for a home in Aurora is $449,900. Since she's had a rough couple of years

her credit is probably shot. How is she going to qualify for a new mortgage? If you were in her shoes you would try and hold on too. The average rent for a one bedroom apartment there is $1600 a month. I will also say that I know that part of town and I would not live there.

[Bettie]

15. I know people who live in places with HOAs

Lists of what you can plant in your yard, no backyard furniture that isn't approved by the HOA, grass must always be an exact length, no cars parked in the driveway (which is hard if you have guests), houses must all be the approved shade of beige....not for me.

We're not cookie cutter people and wouldn't do well in a cookie cutter neighborhood.

ETA: And the idea of paying people to demand compliance is just strange to me.

[pfitz59]

22. My HOA pays for the upkeep of two parks and community landscaping

Nothing is free

[rownesheck]

24. I like our HOA.

Sure, they can be annoying, but it helps pay for the upkeep of the many parks, soccer fields, swimming pools, workout facility, etc in our giant neighborhood. They even pay for us to enjoy Food Truck Fridays, movies in the park and other fun activities. And they also made a dipshit on my street take down his F Joe Biden flag.

[MineralMan]

26. For many decades, I avoided HOAs. I wanted my freedom to do

what I wanted to do with my property. Last year, I changed my mind. I was 76 years old and my wife and I wanted to stop doing yard maintenance, building maintenance, and snow removal. So, we sold our single family home on a residential lot and bought a unit in a townhome development. Our new place is one of four in a quad home building. Trash collection, grounds maintenance, exterior building maintenance, street and driveway maintenance are no longer my responsibility.

For those things, we pay $236 per month. A couple of years ago, the HOA decided to replace all of the siding, soffits, fascia and gutters on the building. The unit owners at the time had to pay that assessment. Personally, I think that stuff is just fine as it is, but next month, a crew is going to replace all of those things. It won't cost me anything, since the assessment was paid by the previous owner.

We were also surprised to learn how much less our insurance cost. The cost for structural insurance and other hazards is also paid through the HOA, so we're basically paying pretty much the rate for renter's insurance ourselves. The rest is covered by the HOA fees. That, alone, almost offsets the cost of the HOA dues, compared to our insurance costs at our previous home.

There are some rules, but none of them prohibit anything I would want to do, so they don't really matter to me. Nor, apparently to anyone else who owns a unit in the development. Beyond that, the HOA doesn't really bother anyone, as far as I know.

So, in my case, I have changed my mind about our HOA. In Minnesota, buyers receive the HOA documents well before closing. I read them all. I understand how it works. I have no problem with the terms of it.

For me, paying the HOA dues is right up there with paying a mortgage, a car payment, health insurance, and homeowner's insurance. It's one of those highest priority things.

Now, I understand that some HOAs are very annoying for owners. Mine, apparently, is not that way. I asked a neighbor before buying our townhome how they were treated by the HOA. I was concerned. At this point, I am not. Should I try to become part of the HOA board? Well, I might, at some point. But, I just got a letter about an opening on the board and an invitation to run for the position. I'm not going to this time. I might at another time, if I grow dissatisfied with the HOA.

[gldstwmn]

31. The Green Valley Ranch HOA in Denver is the most heinous example of this.

I do think their HOA is colluding with some investment company to buy the homes and rent them back to the middle class working families that live in them. There are residents who have faced exorbitant fines for not having the right blinds in their windows and trash cans at the curb too long for facing foreclosure.

Green Valley Ranch HOA filed 50 foreclosures in 2021, city says
The foreclosures were filed over unpaid fines for things like trash cans being left out or grass growing too long, homeowners said.

DENVER — City leaders and homeowner advocates are calling for an investigation and change after the Master Homeowners Association for Green Valley Ranch filed 50 foreclosures in 2019.

This is according to a letter sent to Denver's city council from Sabrina Allie, the communication and engagement director for the city's department of housing stability last week.

The letter said that citywide, there were a total of 119 foreclosures filed by homeowners associations in 2019. Most organizations filed no more than five, according to the letter.

"GVR or Green Valley Ranch exemplifies the need for HOA reform," said Stan Hrincevich with the Colorado HOA Forum, an advocacy group for HOA homeowners. "There are abusive practices that have to be contained and you should not lose your house over the lawn being 2 inches higher than it is."

Homeowners in the neighborhood have said the foreclosures are due to unpaid fines.

“For example, someone not having the right blinds on the windows that face the street. Not pulling up their trash cans, the recycling bins, from the curb and putting them behind the fence," city council member Stacie Gilmore said. "We want to make sure that people are holding onto their homes, especially when they’ve paid years on a mortgage and perhaps during a global pandemic they weren’t able to pull their basketball hoop up to where the HOA wanted it or remove their trash cans from the curb of the street."

https://www.9news.com/article/news/local/green-valley-ranch-hoa-foreclosures-advocates-investigation/73-2b6eb77e-cf8e-49f1-b3aa-eafd0848694a

[Efilroft Sul]

38. I've been fighting with my HOA for three years about my door color.

Long story short, we're arguing whether or not the door is association property. I know they're wrong (the docs all say so), but I can't afford to continue being right, if you know what I mean. And my wonderful red door is eventually going to be repainted a horrid chocolate soft-serve ice cream brown.

[SYFROYH]

45. My condo would put a lein on a unit for unpaid fees.

If a balanced built up we had the HOA lawyer write letters about civil court consequences.

I don't think we ever had to foreclose, but people paid up when they wanted to sell their units.

[Xolodno]

48. Legalized theft if you ask me.

But with that said, not all HOA's are bad. Friend of ours was in an HOA and said his chain link fence wasn't up to standards on their property, his wife was fighting cancer at the time so his response was "Are you going to help me pay for it?". They left him alone, but once she beat it and was able put up a fence that met their guidelines, the board and several other neighbors showed up to help him.

Then you have the bad stories, where someone comes by says your lawn is two millimeters to high and when you tell them you were in the hospital for a few weeks, their response is "not my problem".

The irony of course, HOA's are so obsessed with "looks" to keep property values, they don't realize they are destroying the value. Everything starts looking cookie cutter, their tactics get heard about and people want nothing to do with them and in the end, destroy the value of the area with people refusing to buy into the area and people selling off to get away from the HOA.

[Mariana]

57. They're not all bad

but even the good ones can go bad. All it takes is enough busybodies to move into the neighborhood who want to micromanage everyone's property, and elect people to the board who will do that.

[marie999]

51. We lived in a condo in Florida and loved having them take care of everything outside our apartment.

We moved to NC to be closer to family. We bought a house in a rural area that allows farm animals so we like that even better. Read the documents before you buy a property that is managed.

[llmart]

54. "Read the documents before you buy a property that is managed."

I do think that HOA documents should be more readable for the average person. There's a lot of legalese used that is unnecessary. When I worked at a law school before I retired the research and writing professor was a younger person and he was a huge advocate for lawyers using more "plain English" instead of how it used to be in the past with the Latin phrases and archaic words. I recently had a go around with my HOA board and the management company trying to get them to define a term in our documents and neither of them could. So I did some research (yes, I'm qualified to actually do that since I worked in a law library) and also consulted a few of my friends from the law school to verify that my interpretation was correct (all either lawyers or judges) and relayed that info to the Board and management company who backed off so quickly I could hear their heads spin. Now they're putting out a letter to all owners telling them what that term really means for owners.

When you are moving, buying a place, applying for a mortgage and any other life events you are experiencing, you don't often have time to read and comprehend all of it before you buy. The market was hot when I bought and the price was so good that there were five offers on the first day of listing all of which were above asking price and the only reason I got it was because I paid in cash and the owners needed to move.

[treestar]

53. Should have known because it would have been in the

documents at the settlement. People don't attend to their own interests. They sign without reading.

We all do it, because reading those is boring and they may be tough to understand. But there can be consequences to that.

[haele]

58. It sounds as if s lot of the issue is that a legal corporation owns the HOA.

She's getting hit with outrageously high legal fees - $2k/$3k - for being late or paying a partial payment as she could afford it.
While she's "only" actually behind a bit over $800 in her fees, there's an extra $10k she's being hit with in legal fees keeps her from being able to get a loan or negotiate a payment schedule to catch up.
This is a.similar issue with a lot of legal collections corporations that are contracted out for medical bills or court fines. Anyone who can't pay is viewed as a deadbeat who deserves to be financially ruined along with their families, no matter the reason.
No negotiations, either. Pay one way or another. While they make bank on the fees they charge on top of the original debt, often twice the bill owed. The vig is high as any mafia loanshark would charge.
While the person owing is at fault for falling behind, this becomes abuse.
The way to control this sort of debtor's abuse is to set a fee rate so the debtor can pay both the debt and the fee without losing everything.

Haele