Our Good Buddy Greg Chumbley is at it again!
This guy must be a living nightmare to Abusive HOA Boards!
http://www.sueyourhoacheaply.us/
Tag Archives: FBI
When it comes to collection of HOA liens, it’s all about the money!
guest blog by Deborah Goonan
The latest controversy in HOA Land: in Nevada – and by extension 21 other states with similar legal status – the HOA super priority lien can now extinguish an outstanding mortgage backed by the Federal Housing Finance Agency (FHFA).
It’s ironic, because when CAI was founded back in 1973, it was with cooperation from FHA. Their agreement to back mortgages in common interest developments was the glue that held disparate CAI interests together.
But after years of mortgage deregulation, followed by out-of-control real estate price increases, and the ensuing mortgage default crisis, things have certainly changed.
Now it’s very difficult to obtain mortgage financing for condos, and not that easy for detached single family homes either. In the 22 states that have enacted priority lien status for HOA assessment liens, mortgage financing just became a great deal more difficult to obtain.
In early December, CAI boasted about its Nevada Supreme Court victory, where the court ruled that the FHFA backed-mortgage lien is extinguished following the HOA’s non-judicial foreclosure to collect unpaid assessments.
But a few weeks later, FHFA has fired back, vowing to fight in court to invalidate HOA foreclosures that wipe out taxpayer-financed guaranteed mortgages.
CAI claims that FHFA is “bailing out mortgage servicers” and vows to fight for the rights of HOAs to maintain super priority lien status. CAI’s statement presents the usual argument that the owners that can afford to pay assessments have to cover the costs for owners who cannot or will not pay.
But at issue for FHFA is the fact that HOA foreclosures can now wipe out entire mortgage interests, at dollar amounts that far exceed state super-priority lien allowances of 6, 9, or 12 months unpaid assessments.
The super-priority lien, CAI argues, is a means to motivate mortgage servicers to either speed up the foreclosure process or pay the HOA’s lien prior to or at its assessment foreclosure sale.
It is interesting to note that the Nevada Supreme Court was split 4-3 on whether a judicial foreclosure is necessary in an attempt to wipe out the mortgage lien, citing due process rights to redemption for owners and mortgage lien holders.
It seems clear that FHFA will not sit idly by, allowing HOAs to beat them to foreclosure and wipe out mortgage interests. FHFA has filed action in Nevada Federal court because, in its own words, it “has an obligation to protect Fannie Mae’s and Freddie Mac’s rights, and will aggressively do so by bringing actions to void foreclosures that purport to extinguish Enterprise property interests in a manner that contravenes federal law.”
Will FHFA challenges lead to statutory mandate of judicial (vs. non-judicial) foreclosure of HOA liens? Will increased legal costs and lending risks lead to higher costs for borrowers, including escrow of 6 – 12 months assessment fees? Or will FHFA push for elimination of HOA super priority lien status? These are interesting times.
Given the history of more than a few HOA attorneys to abuse the foreclosure process in order to evict owners and acquire homes with high equity (little to no mortgage balance owed) at the HOA’s auction sale, the recent NV Supreme Court decision is unsettling, to say the least. If first mortgages can be wiped out following HOA foreclosure, doesn’t that create additional moral hazards?
CAI-HOA corporate interests will duke it out in court with FHFA. And while HOA homeowners may “win” the relatively small battle for collecting a portion of unpaid assessments upon mortgage foreclosure, they will probably lose the war for preserving property values, if homes are allowed to sell at HOA auctions for pennies on the dollar, or if FHFA pulls the plug on favorable financing terms.
CAI press release – Win on Priority Lien Case in NV
Statement from FHFA on Super-Priority Liens
CAI press release – FHFA Move Threatens Homeowners and their Communities
Laughably Unconstitutional
Lots of HOAs have tried to ban expressions of Free Speech. Some have discovered, to their chagrin, how expensive it is to flout the Constitution by forbidding campaign signs, religious symbols in windows or Mezuzahs on door jambs. In one famous case an elderly gentleman who stopped on his lawn to talk to two elderly women was cited for holding an unlawful assembly. Cases like that go to the Supreme Court where the lawyers make hundreds of thousands of dollars.
All that being said, you have to wonder at the idiocy of city leaders in South Pittsburg, Tennessee who decided to forbid all city employees from making negative comments on social media about other city employees, or about the city itself. Criticize your government? Go to jail!
Last night I was repeatedly brought to tears by a movie called American Violet. I would recommend it to every American of every race and religion. As a TV reporter I’ve been on many police raids and I’ve (not often) but occasionally seen physical abuse of suspects that troubled me. I’ve been in courtrooms and have seen plea bargains that greatly troubled me. This movie showed me why I had reason to be troubled.
An attorney friend of mine once told me, “A right not exerted is a right soon lost.” He wasn’t the originator of the quote. But we all should claim that quote as the guiding principle of our lives. We live in a great country. Memorize your rights. Get it clear in your mind who grants you those rights. And shout your rights from the mountaintops.
(link to story about banning Free Speech in Pittsburg, Tennessee)
Another Delicious HOA Indictment
I suppose it’s bad manners to dance on someone else’s grave, but if I had good manners I would never have started this website. But this one is too good not to note.
Another woman has been indicted in the federal racketeering case against a dozen Nevada Homeowners Associations. There’ve been about forty federal indictments already, with most of the suspects pleading guilty in exchange for their testimony in court. Stephanie Liane Markham has the honor of being the latest to be indicted for perjury and obstruction of justice. Seems she’s accused of lying to the feds about the fact she only had a one percent interest in a condo at the time she ran for a seat on the board.
A number of other suspects in the federal case were planted onto boards so defect mitigation money could be siphoned away from homeowners into the pockets of crooked lawyers, police officials, politicians and businessmen. And I’ll never let a story like this slip by without noting that a prominent attorney and three other suspects in this investigation committed ‘suicide.’ At least two of them were highly suspicious deaths, Las Vegas style.
The federal HOA case is going to trial in February. It’s long been my contention that a nearly identical criminal investigation could be launched in 49 other states.
(link to Stephanie story in Las Vegas Review Journal)
In A Million Years, Never Thought I’d See This Happen
Colorado is a ‘cool’ state. The University of Colorado was named by Newsweek Magazine as the nation’s ultimate party school. People are healthy, alcohol abuse is low, but this is the first state that legalized recreational marijuana. There are hundreds of ‘maryjane’ stores all over the state.
In Colorado politics, as you can imagine, the heavy population centers are solid blue, the agricultural areas are red. And about the only thing that causes riots and tear gas battles is when crowds of young people are celebrating an end-of-season victory by the Broncos, the Nuggets or the Avalanche. On those nights, damage to store windows and police cars can run into the millions. A ‘cool’ state with an edge.
Our early history had an ugly side, it was the second home of the reconstituted KKK back when the Klan promised it was no longer opposed to the presence of the Negro race. Our history is checkered with 156 lynchings. Interestingly, the Klan only lasted about five or six years here before being run out of the state in the late 20s. And most of the lynchings were of white gold miners who’d gotten involved in fatal confrontations over bar girls, or the ownership of gold claims.
These days, Colorado is racially diverse and probably more tolerant than most other states. Here, we really recognize only two races, those who ski and those who don’t.
Oh, I should tell you there’s lots of population growth and private homes are being built by the hundreds of thousands. For many years, all new development has been in mandatory Homeowners Associations. As a result, we are the de facto “Homeowner Association Central” for the Western Plains. And HOA abuses here are legendary. Everything you see happening in Florida, Arizona, Nevada and Texas is happening right here in Colorado. Some of the largest embezzlements from HOAs in history were right here in the Denver area. In fact, it was here that I first started to write my book, Neighbors At War!
Since our gun laws are pretty loose, and since HOA neighborhoods are so angry, we keep waiting for the first gun violence to break out during the annual HOA meeting. It hasn’t happened yet. With our cowboy mentality, it’s only a matter of time, I suppose.
Meanwhile, I was really stunned to see a new group arise which is trying to get some common sense laws past a legislature that can sometimes do some pretty stupid things. A press release on a proposed HOA law is linked below. The proposal makes so much sense that I predict another eruption from the folks at CAI (Community Associations Institute). The CAI knows our state well, and in the past they’ve screwed up some pretty good proposed legislation.
But see if you don’t think this proposal is based on common sense.
(link to HOA proposal in Colorado)
