Tag Archives: foreclosure

CAI Law Firms Fight Back

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CAI lawyers in Florida (and most likely elsewhere) are whining about one of the few court decisions that ever favored a homeowner against an HOA. It’s a case where the homeowner wrote a check for $840 with the notation, “in full and final satisfaction (of disputed amount).” The homeowner included a letter with the same basic language.

The HOA attorney instructed his clients to cash the check, but only apply part of it toward the original disputed amount. An Appellate Court has now ruled that since the check was cashed, the HOA cannot go after the $38,000 in additional fees it claimed was owed by the homeowner.

This is another one of those trashy HOA scams that have given the industry such a horrible reputation among American homeowners. If a homeowner claims, rightly or wrongly, that an HOA fine was improperly assessed, the HOA immediately begins tacking on late fees, fines, attorney’s fees, collection costs and interest. Florida law forces the homeowner to pay the most recent fees first. In other words, interest, collection costs, lawyers, fines, late fees, and only then can the homeowner ever repay the original debt.

It’s a beautiful system which has worked well for generations of Mafia families and for low-life debt collectors. While the debtor desperately tries to pay his original debt, the associated fines and interest keep rising, as do legal fees and collections. It’s a daisy chain that’s impossible to break. It’s a massive money maker for lawyers and collections agencies who, while doing absolutely no work, can raise their charges indiscriminately and perpetually until the homeowner is broken. Of course, the HOA prances in and seizes the home which it promptly puts up for auction. The lawyers then begin picking through the estate of the bankrupted homeowner. The system is fundamentally unfair to the individual homeowner who never has a chance to plead for his own day in court.

So in this rare decision where the Court ruled in favor of the homeowner, the tears and gnashing of teeth are being heard throughout the CAI community.

(CAI firm’s warning to the HOA industry)

 

To Spark Some Financial Brainstorming

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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.

 

“What Hath God Wrought?”

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“What hath God wrought?”

It’s the anguished question from the fourth book of the Old Testament.

It was the astonished phrase that opened the first telegraph line between Baltimore and Washington in 1844.

It could also be used to express complete disgust at a current HOA news story from Detroit.

Waterford homeowner Natalie Forte bought a Chevy Volt which she charged from an outlet in her shared HOA garage. She had no problem with paying an extra charge for the power. But she says her HOA demanded four times the amount of power that her Chevy Volt actually used.

What did the HOA do? LOL! They just disconnected all the power to Natalie’s garage, forcing her to use a 100 foot extension cord to charge the Volt from her condo.

Really? Can HOA vindictiveness get any more ridiculous than this?

What hath God wrought?

(link to WXYZ-Detroit story)

(link to Green News)

 

Indiana Residents Fighting Eminent Domain for Private Development

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guest blog by Deborah Goonan

I follow Institute for Justice on social media. See the link below for their recent press release about the Pleasant Ridge neighborhood of Charlestown, Indiana. This is yet another case where the city seeks to declare several city blocks “blighted” and to use state grant money to purchase 350+ homes for the paltry sum of $6000 each.

According to a June television report (link below), which includes interviews with Pleasant Ridge residents and Charlestown Mayor Bob Hall, early plans for development are to create a mixed use neighborhood consisting of duplexes, single family homes and affordable housing for seniors. In other words, probably another HOA, this one subsidized by tax dollars.

In June, Hall was quoted as saying that owners would not be “low-balled” on prices offered for their properties. At that time, Hall said owners would only be offered up to $15,000 from grant funds, and developers would have to contribute the rest toward market value. So the proposed offer price has already dropped by $9,000 in just 5 months, with no mention of Developer contribution.

The bottom line is that private developers want the land, so they can build new properties. The Mayor wants to collect higher tax revenues. Instead of dealing with individual properties that are in need of being condemned or demolished, the plan is to raze the entire neighborhood and displace hundreds of residents. Once again, the Supreme Court’s twisted definition of “public use” comes back to haunt American citizens. Fortunately, Indiana’s laws stipulate that eminent domain cannot be used for private development.

I find the following statement from the Mayor’s office particularly interesting,

“This area was declared blighted in 2002 in connection with a revitalization grant received then. The housing in this area was temporary housing bought by the army to house workers at the ammunition plant in 1940,” the mayor’s spokeswoman, Geneva Adams, said.  “They were not meant to be permanent housing. The decline of these structures is evident as you drive through the area.”

Has Ms. Adams taken a close look at the construction quality of many modern homes? I would be willing to bet that the majority of them will not stand the test of time as well as the Army’s temporary housing that is now 74 years old.

(link to Institute for Justice news release)

(WLKY-News video of Pleasant Ridge and Charlestown Mayor, June 2014)

(WDRB coverage from earlier this year)

Dumber Than Dirt In Delaware

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The Maple Hill Homeowners Association is becoming the laughingstock of Bear, Delaware. There are only 23 homes in this HOA, but these idiots have picked the most unbelievable fights with each other and have made their own neighborhood toxic to anyone thinking of buying a home there.

Dues are cheap. About $280 a year. But the petty bickering and the downright nastiness has churned up more than $45,000 in legal fees as various neighborhood crybabies run to the courts to try to get their problems solved.

Ken and Joanne Holbert have tried for years to pay their homeowners association dues by sending checks to the HOA’s mailbox. The president, Jutta Douglas, refused to accept the certified mail in a patently obvious effort to slander the couple with terms like “deadbeat” and “freeloader.” Those actually are actionable terms and the Holberts could probably win a good-sized slander lawsuit.

The numb-skulls at Maple Hill then filed liens against the Holberts’ home. Under Delaware law, you don’t even have to notify a homeowner that a lien has been filed. Just file and foreclose. It’s mean. It’s vulgar. It’s the kind of thing that’s led to violence in a number of other states.

A couple of Delaware politicians are talking about creating an Ombudsman’s Office to deal with petty strife like the viciousness in Maple Hill.

You can fix a law. You can change the way that some HOAs operate.

But you just can’t fix stupid.

(HOA disputes in Delaware)