In complaining the other night about health problems, age problems and computer problems, I completely forgot the main point of bringing all of this up in the same post. It was a way of directing you to one of the funniest commentaries on old age that I’ve ever seen. It was a speech to the Conference on Aging done by a well known California weatherman.
You may end up with some laughter-related medical problems of your own.
North Carolina is certainly a state where the HOA system has gotten way out of control. Fortunately, outspoken advocates like Ole Madsen (HEAR4NC.org) are articulating the insanity that’s disrupting the lives of so many homeowners around the country.
When you buy into an HOA, you’re essentially pledging all your personal assets to a group of partners, most of whom you’ve never met. Your assets become the de facto assets of a non-profit corporation which is potentially subject to liability lawsuits, damage from natural disasters, poor workmanship by developers, frivolous legal actions by overreaching board members, embezzlement by board officers and management companies. That’s a crazy kind of partnership, but it’s one that tens of millions of Americans have blindly accepted. And it’s one where HOA law firms are bathing in the mythical pot-of-gold.
In many HOAs homeowners are beginning to realize that they’ve entered a vortex that is spinning downwards, threatening property values and life savings.
The TV story linked below is worth watching. But as you do so, just be aware this isn’t an isolated incident. The HOA system in America is so badly broken it can never be fixed. It’s built to reward criminal behavior and those who bully their way to the top. When there’s a record of bad behavior by HOA officials and management companies, how do you persuade a potential buyer to take over your mortgage?
(link to WWAY TV story on missing HOA money)
On this blog we rant and rave about the alarming loss of Constitutional rights in our covenant controlled communities. 65 million people have moved into these neighborhoods having no idea how arbitrary and illegal these petty dictatorships can be.
In tonight’s blog and link I’m going to stray way, way over the line and suggest that anyone concerned about the dramatic loss of our 240 year old Constitutional Republic watch a documentary that was published on YouTube a year ago.
As a lifelong journalist, I’m not much of an alarmist. Yes, I watch and read material from the left and the right, the liberal media and the conservative. And I am usually thoughtful as I mull it all over. But I’ve always been more of an observer than an activist.
That being said, somehow I missed the documentary linked below. It pulled material from FOX News, CBS, ABC and various liberal and conservative commentators and sources. It looks at the loss of personal rights over the past ten years. In the name of terrorism a massive bureaucracy has emerged which is doing things that would have been incomprehensible fifteen or twenty years ago. Technology has essentially made privacy and personal rights obsolete.
Be forewarned, if you’re timid this may cost you a few hours of sleep.
(link to documentary on government overreach)
I just finished taping a TV interview in Denver on the future of Homeowners Associations. The host generally agreed with me that a financial tidal wave is coming that will slam into the nation’s housing market. It will begin with a collapse of the U.S. mortgage industry and HOAs will be the first to be decimated. With the unprecedented amount of federal debt, the ending of quantitative easing, Japan’s weak-kneed attempt to begin its own form of quantitative easing, Russia vowing to outlaw circulation of the U.S. dollar, China’s weakening international trade, a U.S. stock market trading (weakly) at all-time highs, threats of war in Ukraine, Iran, Syria, North Korea, the US/Mexico border, former Communist leaders predicting a return to leadership in East Germany. All the signals for world-wide financial disruption are there.
Outside the TV studio the host asked me a question I had trouble answering: “OK, if you believe all this is coming, where do you put your money?”
Whew! Talk about a million dollar question.
Some experts are advising stashing savings into commodities like silver, copper, any basic manufacturing materials. Others advise using your spare money to pay down mortgages to help you hold out for the long run. Still others say to get ready for hard times you need 9 months of food and water stored in the basement.
I’m not an economist, not even a great investor, and I’m certainly not a survivalist. But if HOAs are the first to be hit in the coming tsunami, why would a homeowner want to pay off a mortgage in an HOA house? With the massive potential for a troubled HOA to bully marginal homeowners with extra fines, fees, liens, legal fees and collection costs isn’t a paid-off HOA home a prime target for greedy (or desperate) board members and managers? Isn’t a supposedly ritzy HOA neighborhood a prime target for questionable slip ‘n’ fall lawsuits where each owner has to fork up money to pay off judgments and legal expenses?
Add to the mix the Nevada court decision (and pending replication elsewhere) the fact that a super-priority lien (the HOA’s petty fine for unmowed grass) can extinguish the first deed of trust (your mortgage) and you’ve got the formula for neighborhood nitroglycerin. It’s unstable at best.
We’re learning more each day about the risks of owning HOA property. Abusive boards, management companies and complicit law firms have brought all this seeming lack of stability about. So, what is the smart investment in troubled times?
Comments?
I’m all ears.
Ah, Barbara Holland, how we love thee! Ms. Holland, who writes a column in the real estate section of the Las Vegas Review-Journal, complains about a recent guest blog that lists some of the complaints against her: One is that she gets paid for writing her newspaper column which is massively biased in favor of Homeowners Associations.
Ms. Holland, who describes herself as the “Dear Abby of Homeowners Associations,” will never deny that writing her newspaper column has made her very rich in the real estate business. Her ‘voluntary newspaper column’ is the kind of self-promotion that every entrepreneur dreams of. Whether she gets paid ten or twenty bucks per column by the newspaper is absolutely immaterial. Barbie Baby, you started piling up your millions in the property management and Realty business the day your first column was published. In the most corrupt real estate market in the nation, most honorable people would be scared to death to identify themselves as being the “Dear Abby” or “Dear Ann Landers” of anything HOA related.
But all of that is petty infighting and beyond the point. The issue at hand is the stupidity and short-term thinking of the Nevada Supreme Court which ruled that an HOA’s Super-Priority lien could extinguish the mortgage company’s first deed of trust. Bottom line: thousands of Nevada homes that are in crisis can be snatched up by real estate bottom feeders who grab homes for a couple thousand bucks at auction, and flip them for hundreds of thousands of dollars each. A windfall profit. A disaster for those in the mortgage business. And Barbie tells us, “No big deal.”
In fairness to Barbie Baby, here’s her latest take on the subject:
(link to Barbara Holland’s column on Nevada court decision)
Now that “Dear Nevada Abby” has spoken, let’s look at some totally different conclusions made by far more astute financial folks at the Wall Street Journal, reporters like Joe Light (joe.light@wsj.com). The link below sometimes asks for a registration, but any good Internet researcher can find a way around that.
(link to WSJ article on Nevada mortgage mess)
(link to parallel article in Bloomberg News)
Now, to you, Dear Reader. Do we believe in dear ‘Self-Interest Nevada Abby?’ Or the financial folks on the national scene who are actually talking to the nation’s lending institutions about all the impending consequences?
