This is such a bad idea. Homeowners Associations are linking arms with the credit reporting industry to hammer the credit scores of homeowners late on their HOA dues. Horrible direction for this crooked, crime-filled HOA movement to take.
Look at news stories around the country. Go back and read the past four years of stories on this blog. Look at the horrors uncovered in the Kansas City Star. Now get out your calculator and start adding up the vast numbers of lawsuits that are going to be filed by homeowners whose credit scores were wrongly lowered. When lawsuits are filed against a Homeowners Association, who pays? And don’t say “the insurance company.” Ultimately, homeowners across the country will be forking over millions, hundreds of millions of dollars to pay for legal costs and judgments. Can you say, “Special Assessment?”
(link to excellent column about HOAs and credit reporting)
Pingback: Unjust HOA assessment credit reporting needs Fed legislation | HOA Constitutional Government
Petition: https://www.petition2congress.com/22460/petition-cfpb-tila-protections-homeowners-subject-to-hoa-homeow
PLEASE VOICE YOUR CONCERNS TO CONSUMER FINANCE PROTECTION BUREAU (CFPB) http://www.consumerfinance.gov
TILA Truth in Lending Act could, potentially. offer homeowners protection from:
1) HOA non-judicial foreclosures and 2) HOA forced arbitration – regarding financed HOA assessments.
Should TILA (Subpart E 12 CFR 12 CFR 1026.36(h))1 apply to financed homeowner association assessments (i.e., credit transactions secured by consumer’s principal dwelling) based any of the following:
1) There is a contract with the HOA (CC&Rs) providing for “financed” assessments,
2) HOA assessments are financed as credit and secured by the consumer’s principal dwelling (similar to a HELOC) in which the HOA has power to lien and non-judicially foreclose for any unpaid financed assessments and associated costs, such as late fees, collection costs,
3) HOA assessments are reported to credit reporting agencies as credit? 2
In several states, including Nevada, HOAs may non-judicially foreclose on consumers’ homes using super-priority lien laws to extinguish their first deeds of trust. 3
Furthermore, Nevada requires (unconstitutional) cost-prohibitive forced arbitration prior to commencement of a consumer/homeowner’s foreclosure defense legal action.
HOAs may, at very little cost, non-judicially foreclose, while the huge financial burden is on the consumer/homeowners to complete very cost-prohibitive forced arbitration to protect their homes.
Presently, there is a huge risk of fraud (foreclosures) to consumer/homeowners, banks, Fannie Mae, Freddie Mac because there is no oversight over these”financed” assessments secured by consumer’s principal homes.
Enforcement of TILA could, potentially,
1) Prevent financial fraud and fraudulent foreclosures based on HOA assessments (unregulated credit transactions);
2) Prohibit states’ cost-prohibitive forced arbitration involving HOA assessments;
3) Prohibit non-judicial foreclosures involving HOA assessments.
These TILA protections would greatly benefit consumer/homeowners and I would certainly appreciate any help you can provide.
Thank you very much for your help.
Footnotes:
1 Prohibition on Mandatory Arbitration or Waivers of Certain Consumer Rights—12 CFR 1026.36(h) A contract or other agreement for a consumer credit transaction secured by a dwelling (including a HELOC secured by the consumer’s principal dwelling) may not include terms that require mandatory arbitration or any other non-judicial procedure to resolve any controversy arising out of the transaction. In addition, a contract or other agreement relating to such a consumer credit transaction may not be applied or interpreted to bar a consumer from bringing a claim in court under any provision of law for damages or other relief in connection with an alleged violation of any federal law. A creditor and a consumer, however, could agree, after a dispute or claim under the transaction arises, to settle or use arbitration or other non-judicial procedure to resolve that dispute or claim.
2 https://www.sperlongadata.com/press-release/Sperlonga-Press-Release-Post-Launch_9-27-16_Final.pdf
3 SFR Investments Pool 1, LLC. v. U.S. Bank, N.A., http://www.ballardspahr.com/alertspublications/legalalerts/2014-09-19-hoa-lien-extinguishes-first-deed-of-trust-in-foreclosure-nevada-supreme-court-holds.aspx
Please note – none of this is legal advice. Thank you.