Yet Another Clueless Columnist

The link below is to a story in the Chicago area’s Daily Herald. The question it poses is innocent enough. “Should condo owners press their boards to seek FHA approval?” But the writer misses some terribly important points.

1. 70% of all HOAs in the country have underfunded reserves.

2. With all the fines, lawsuits, liens and foreclosures across the country, any kind of HOA is an investor’s worst nightmare.

3. People are getting educated about HOA Amerika, and Realtors everywhere are hearing, “Only show me listings that are NOT in HOAs.”

4. Fifteen to thirty year old neighborhoods are falling apart, making disaster properties impossible to sell at any price.

5. Financial experts say there’s a housing bubble coming that will look more like a nuclear bomb than a bubble. This one will be a doozie.

It would be very interesting to see if the FHA has approved any Homeowners Associations in the past decade. My guess is that you’d be hard-pressed to find a single one. Freddie and Fanny have financed some recent HOA projects but these two federal agencies are already on life support.

If anyone knows this Illinois journalist, drop him a line. Tell him to do some real reporting.

“The times, they are a-changin’.” -Bob Dylan

(link to column on FHA approval)

 

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About

Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

2 thoughts on “Yet Another Clueless Columnist

  1. anonymous

    “1. 70% of all HOAs in the country have underfunded reserves.”

    As somebody named “Anonymous” (not me) once wrote:

    The problem with reserve studies is that they are a pretextual report for the purposes of generating more revenues for the HOA attorneys and HOA management companies.

    Invariably, the study will show that there are insufficient reserves. This results in a push by the management companies for “higher assessments”. The management companies, of course, are placing the funds in management company operating accounts – not HOA accounts. In addition, the additional assessments create financial hardships and therefore an opportunity for “late fees”, “collection fees”, “payment plan fees”, etc. Should the homeowner become delayed in paying the higher assessments, its an automatic opportunity for the HOA attorney to demand $300-$600 for a single letter. The HOA attorney and management company then engage in a fee pyramiding scheme for mutual profit to the detriment of their client HOA and its members.

    The conduct will invariably promote a dispute – the legal fees for the HOA will of course be drawn from the “reserve” funds. The knowledge that a large amount is stockpiled only drives the HOA industry to come up with more creative ways of divesting it from the homeowners and HOA.

    Reply
  2. Nila Ridings

    I’m still hoping for the day when some property manager decides it’s time to come clean with all the scamming tactics that are used to take advantage of the homeowners.

    Just when we think we’ve heard or figured out every way the board members, property managers, or attorneys can destroy a homeowner…here comes another tactic they use.

    Clearly, too much opportunity, not enough checks and balances, and too low of integrity for ANYBODY to trust the operational management of their HOA. It’s sad, but it looks like we need to think of everyone of them as criminals until they get caught…then we can recognize them as convicts!

    Reply

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