MONDAY, DECEMBER 19, 2011
One would be quite challenged to refute any of the assertions that Harvey Speck made in his letter to the editor of the Daily News-Sun in Arizona. The only point of opposition I would like to broach is where Speck brought up the DC remedy to HOA fee collections woes in the event of home mortgage foreclosure.
In the District of Columbia the lender must pay the home owner association 6 months of homeowner fees in the event the lender forecloses on the homeowner. So, is Mr. Speck intimating that mortgage companies should hold off on foreclosing on deadbeat slackers who do not pay their home mortgages just so HOAs can collect their fees?
Sorry, Harvey but way too many folks signed on the dotted line for homes they could not afford. If the home owner can not afford his monthly payments then he gets booted out. Getting thrown out of the home you could not afford to begin with is just action for the financially irresponsible! It is too bad you live in a neighborhood where people can not afford the homes they live in, but that is not the lenders problem. There are way too many Americans driving in cars and living in homes they can not afford. Let them live more austerely rather than let the financially responsible bail them out!! I do know that many responsible homeowners have family members who get sick and run up exorbitant medical bills, but that still does not give them the right to live in homes they can not afford.
BTW, completely off topic, Harvey Speck is the best tax preparation professional in the business. He runs the Grand Tax Service in Surprise, AZ and will keep you and yours out of trouble with the IRS!
LETTER TO THE EDITOR: HOAS NEED FORECLOSURE PROTECTION
Arizona needs a law that protects homeowner associations if the homeowner is delinquent on association fees when the lender forecloses. In an executive director’s report of my HOA it was pointed out the association does not recover any dues or fees at the time the foreclosure is closed. Most HOAs can ill afford to absorb substantial delinquency losses and rely upon the HOA fees to survive. Without such a law, when a lender forecloses on a home, there is no practical way the association can recoup the money owed. Although a delinquency can become a lien against the home, the lien is wiped out by the foreclosure. Suing the delinquent homeowner is often a futile exercise.
Many states have come to realize this is unfair to the rest of the HOA members. Sixteen states have enacted super-assessment priority laws. For instance, in the District of Columbia if an institutional lender foreclosures it must pay the association up to six months of the delinquent assessments. Delaware adopted a six month priority law in 2008 and Florida extended its priority lien from six months to 12 months. Maryland recently enacted a law to take effect in October that requires the lender of a first trust mortgage who forecloses to pay the association up to $1,200 of the delinquency. At least one member of the Legislature has expressed to me an interest in considering it provided “it was part of a compromise that included preventing rental restrictions after someone buys in an HOA.”
Since Arizona has experienced a high rate of foreclosures, many affecting the pocketbooks of homeowner associations, it would be incumbent upon our Legislature to consider remedying this in line with other enlightened states.