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Late last week, StockMarketsReview.com posted a story entitled “Revenge Foreclosure Is a Tool in the Hands of HOAs.” The story begins by asserting that a new term “revenge foreclosures” has been coined in the HOA world. “It refers to the increasing number of foreclosures being initiated by homeowners associations against house owners for unpaid association fees. It is easier for the associations to foreclose than the banks because here the question of proof of ownership does not arise.” 

The story goes on to describe the following scenario: “The associations engage debt collectors to do their work. LM Funding grants loans to the associations and then brings their books up to date. The firm shares a proportion of the collected fees. Frank Silcox, CEO of the firm said about the associations foreclosing on the unit owners, “They are angry, and they make a short-term decision. They’re thinking they just want to get back at them.”Continue Reading Revenge Foreclosures: Are you kidding me?

There has been much debate surrounding the super lien in light of House Bill 11-1197 which was derailed this past legislative session.

CR.S. 38-33.3-316(2)(b) provides that the association is entitled to a super lien for assessments which would have come due during the six months immediately preceding the filing of a foreclosure action by an association or a party holding the first Deed of Trust.Continue Reading Super Lien Clarification and Suggestions

Bad checks, also known as bounced checks, non sufficient funds, insufficient checks, and dishonored checks, can be a big problem for an Association.  In Colorado, the law allows the recovery of damages for those who receive checks that are subsequently returned for non sufficient funds. Under Colorado Revised Statute 13-21-109, the “maker” of a check (i.e., the person who wrote the check) can be liable to the “holder” (i.e., the Association) of the check if that check is not paid upon its presentment to the bank or other depository.Continue Reading Recovery of Treble Damages for “Bad Checks”

Bank of America, JP Morgan Chase and other lenders have recently called for a halt on foreclosures amidst allegations that they submitted improper and, in some cases, fraudulent paperwork to push through their foreclosures.

 

It is a well known fact that homeowners delinquent in the payment of their mortgage are more likely than not also delinquent in the payment of their assessment fees. Therefore, the delay in the filing and conclusion of public trustee foreclosures in Colorado will inevitably result in greater delinquencies for associations.Continue Reading The Association’s Response to the Halt on Foreclosures

Commonly Asked Questions and Answers:

Below you will find a list of some commonly asked questions and answers regarding an Association’s rights in the collection of unpaid assessments.  Please clink the link below each question to continue reading the previously posted article that discusses each answer in depth.

 What are some of the options an Association has to enforce its covenants to collect unpaid assessments?

When considering the various options available to an Association, the first thing a Board should do is consult their governing documents. Typically the Association’s Declaration will specifically stateContinue Reading Commonly Asked Questions and Answers

You will remember from a recent posting that we discussed the new Fannie Mae guidelines, and the anticipated HUD regulations. As noted,  HUD did in fact adopt new temporary regulations that went into effect on December 7, 2009, and remain effective until December 31, 2010, at which time the new permanent HUD regulations will become effective. The new HUD temporary regulations are found in HUD Mortgagee Letter 2009-46 A, and can be found  here. The new HUD permanent regulations are found in HUD Mortgagee Letter 2009-46 B, and can be found here. It is important to note that condominium projects under developer control and under construction or being converted have different standards. This posting does not address those standards.Continue Reading New Lending Rules Continued – HUD Requirements

The fallout from our current economic crisis is hitting all of us, sometimes in ways we least expect. While many homeowners are struggling to hold onto their homes, many are faced with the prospect of having to sell. In the present economy, that is difficult enough. However, for those whose homes are condominiums, Fannie Mae has implemented new guidelines that can make it more difficult than previously to complete a sale. HUD has adopted similar new temporary regulations which went into effect on December 7, 2009 and remain effective until December 31. 2010, at which time more restrictive permanent regulations become effective.Continue Reading New Lending Rules – Fannie Mae and HUD

Sometimes, when circumstances prevent collecting delinquent assessments from owners by more traditional methods, a receivership may assist the association in getting paid. Further, even if other collection options are available, a receivership may help you receive your assessments more quickly.

A receivership is started by filing a lawsuit in County or District court. Unlike other lawsuits…

With record rainfalls this season, Colorado community associations and managers have stayed busy responding to reports of water intrusion and hail damage. After the immediate excitement subsides, our phones start ringing. Managers and board members typically ask us some variation of the following questions about insurance:

Is the association or the owner responsible for insurance coverage? This question often arises in the context of condominium and townhome communities, and the answer depends on what the governing documents and controlling statutory provisions say. Often, the documents do not give clear guidance on which party bears the burden for insuring specific components, hence the call to the attorneys. The answers sometimes come as a surprise to uneducated owners and even association boards.

We recommend that associations evaluate insurance obligations with legal counsel and their insurance professionals to ensure proper coverage and to enable clear communication with owners about what coverage applies. Through the preparation of insurance and maintenance charts that summarize association and owner obligations, and the adoption of insurance guidelines that state insurance coverage responsibilities and provide step-by-step procedures for reporting and handling claims, associations can proactively educate owners and reduce confusion when losses occur.Continue Reading Rain, Rain, Go Away — All this damage … who will pay?