Even if you keep up on your mortgage payments but let your homeowner payments slip, you could lose your house. Homeowner associations say they are being forced to foreclose to collect payments.
Without dues, the associations cannot pay for landscape, pool maintenance or routine repairs. This affects a lot of people. The Community Associations Institute said 59 million Americans live in neighborhoods governed by homeowner associations. Business is good for collection agencies that are being hired to collect money from delinquent owners.
“Gauging the number of foreclosures nationwide by homeowner association is difficult. But in Texas, foreclosure attempts initiated by homeowner associations in 19 counties are up 30 percent from two years ago, according to Dallas-based Foreclosure Listing Services.
“In the San Antonio area alone, foreclosure actions by homeowner associations jumped to 170 in April from 21 in April 2008, according to RexReport.com.
“In Florida, attorney Bob Tankel, who represents hundreds of homeowner and condo associations, said he has increased his staff from three to 16 in the past 18 months to handle a mounting caseload of 3,500 open collections. About one-fifth of those cases have reached foreclosure, he said.
“In California, Andrew Schlegel, executive vice president for Merit Property Management said more than 6 percent of the homes that his company manages are in some stage of delinquency with regard to membership dues, up from around 1 percent in previous years.”
WalletPop.com pointed out that condo associations have a lot of reason to negotiate with homeowners who are having financial troubles:
“Foreclosures depress property values. Just to spitball some numbers, let’s say you’re $5,000 behind on your dues and there are 100 units in your complex. If your foreclosure would lead to a $2,000 decline in the value of each of your neighbor’s units, that’s a fate they’re going to want to avoid.”
