Sealed documents in a massive mortgage foreclosure fraud case against the nation’s biggest banks have now been unsealed. And the results are unsettling. I’ve long been predicting a real estate bubble in the country’s 335,000 Homeowners Associations, and I still believe it’s coming. If this mortgage fraud case picks up steam based on the release of these documents, my prediction will come true sooner than later.
There probably isn’t a tourist in history who’s visited a resort in Mexico or the Bahamas and hasn’t been approached by a hyped up HOA salesman. You can buy a condo in La Paz, or an apartment in a proposed new resort in the Bahamas for pennies on the dollar. It sure is tempting with all that warm sun and salty air.
But beware! As bad as American HOAs are, they don’t compare to the problems you face when investing your money in another country.
Homeowners and developers are at odds in the construction of Oceania Heights, a ‘luxury’ vacation paradise in the Bahamas. A Bahamian attorney and a Canadian zillionaire are behind the project. The operable phrase is the ‘troubled’ project. It’s at a standstill with hundreds of thousands of dollars being bled out of property owners for legal fees, and what-zit fees, and whatever other money has to be passed back and forth under-the-table.
Hundreds of vacationers threw their money at the proposed resort homes. But Oceania Heights just can’t seem to get itself built.
If you think HOAs in America are plagued with problems, wait until you’re dealing with an HOA in a third world country.
There’s yet another lawsuit in North Carolina involving an HOA’s use of phony bookkeeping to jam fees down the throat of an elderly homeowner.
Alan Elam says his family is being bullied by their Homeowners Association (so what’s new?).
Charlotte House HOA and William Douglas Management say HOA dues are late after 30 days. But when Elam is more then 10 days late, he gets fined. When he pays his dues, the fine is charged against next month’s rent which makes him automatically late for the next payment. The fines and late payments have added up to more than $10,000.
Elam’s attorney calls it ‘accounting trickery.’ He’d be more accurate to call it “Standard Operating Procedure.”
The Elam family is destined to lose this lawsuit and forfeit their home. That’s also standard operating procedure.
It’s amazing to discover how few people know that Homeowners Associations routinely discriminate against the handicapped. Despite federal law against such discrimination, HOAs generally do what they dang well please. Once in a rare while HUD will file a lawsuit. Invariably that means a huge fine assessed against every member of the neighborhood. You can be a completely innocent homeowner and suddenly find tens of thousands of dollars assessed against your home because some idiot on the board did something stupid.
This story is not about HOA discrimination, just the nastiness that routinely happens around families with disabled children.
Fountain is a small town on the outskirts of Colorado Springs. A family there has a 16 year old daughter with Cerebral Palsy. The City of Fountain gave them a permit to build a wheelchair ramp to their front door, but the neighbors are outraged. They say the wheelchair ramp could destroy their property values. The family says the next-door neighbors are threatening to sue.
If this actually was a Homeowners Association, the couple with the handicapped child would already be out on the street. It’s happened before.
So you’ve finally gotten that wonderful new job in another city and you’ve gotta put your condo on the market. Well, get ready for some bad news. The boards of Homeowners Associations just love killing real estate transactions. And they’ve got lots ways to do it.
An article in Marketleader.com talks about a few of the ways a Homeowners Association can kill your deal to sell your home to a prospective buyer.
If your HOA has a history of filing liens and lawsuits against homeowners, you might as well donate your property to a charity. You’ll never sell it. And a mortgage company will never let your buyer make the purchase.
If your HOA has any kind of legal history (think Trayvon Martin) then your contract with the new buyer is probably dead.
If there’s any history of discrimination or construction defect litigation, then you may as well kiss your home equity bye-bye.
The mortgage companies are getting wise.
Ladies and Gentlemen: Behold the monster you have created!
