An interesting story in the news caught my eye today as I was sipping my morning coffee. An Aurora woman, allegedly frustrated with her non-responsive mortgage company, spray painted the following message on her garage door: “"Jamie Dimon & JPMorgan Chase JP Morgan Chase is stealing this home. Ignores homeowner for 21 months!! I will not violate federal law on your behalf as a condition of communication from you! Call me. Chase Me!! (heart) you." Apparently, she has been attempting to work something out with her lender for twenty-one months to no avail. The entire story can be read here: www.thedenverchannel.com/news/local-news/woman-tags-home-with-message-to-her-bank-jpmorgan-chase-is-stealing-this-home
As someone who actively litigates collections and lien foreclosures on behalf of community associations, most who know me would not expect an empathetic response by me to her situation. Besides, every story has two sides right? However, some important lessons can be gathered from this interesting story for the benefit of community associations.
First, communication with delinquent homeowners in your community is critical. Whether you are a board member or manager, if a delinquent owner contacts you to discuss their particular set of circumstances, it is important to speak with them or return their call as soon as possible to listen to their concerns and try to work out a resolution. No one likes to feel ignored -especially an individual who may be going through financial turmoil and is likely under a great deal of stress. If a homeowner feels ignored, they may allow the debt to continue to accrue and eventually spiral out of control. If you are working with an attorney who does not timely return a homeowner’s calls, consider addressing that issue immediately.
Next, pursue delinquencies while the delinquent balance is reasonable. It is much easier to negotiate a payment plan on a $500.00 debt than on one that is $5,000.00. To illustrate, a 12 month payment plan on the $500.00 debt would amount to a manageable $42.00 payment per month while the same payment plan on the larger balance would result in a monthly payment of $417.00. If your collections policy does not permit a timely turnover to your collections attorney in this manner, you may want to consider amending it.
Finally, to the extent possible, act as reasonably as possible when approving payment plans. I’m certainly not suggesting waiving hard costs, such as assessments or legal fees, or permitting a three year repayment plan when the board has a pre-approved limit of twelve months. However, I find that delinquent homeowners tend to remain current on payment plans where there was at least some minimal give and take from both sides prior to reaching an agreement. That may mean a concession by the association to suspend future interest charges on a payment plan as long as all payments are timely made or permitting a four month repayment plan rather than mandating a lump sum settlement with a first time delinquent homeowner.