Did You Know That You Can Lose Your Home for Not Paying Your HOA Dues????

By
Mortgage and Lending with Prospect Mortgage NMLS #151088

Being late on your HOA due payments could cost you your home.  I read a very interesting article on this topic today.  Some home owners across the country are facing foreclosure, but not from action by their mortgage company.  Home Owners Associations (HOA's) are the latest to pursue the foreclosure option to attempt to get delinquent home owners to pay up.  

Some home owners are viewing their HOA due payments as optional.  Quite the opposite is true though.  If you live in a community with a mandatory HOA, then your dues are just that, mandatory.  Your HOA payments can go toward a variety of things for the community. 

The monthly HOA dues for a condominium typically covers a variety of items.  Most commonly, the HOA dues cover common area maintenance and upkeep, common area liability insurance, exterior building maintenance, exterior building insurance coverage, garbage collection, tennis courts, club house, swimming and other such amenities.  Some HOA's may also include utilities such as cable TV, Internet, or water service.

In a PUD (Planned Unit Development - attached or detached), the dues may cover common area maintenance and upkeep, common area liability insurance, garbage collection, tennis court, club house or a swimming pool.  In some cases, exterior building insurance is also included for in the HOA dues.

Nearly 30 states, including Georgia, allow HOA's to go to these lengths to collected what is owed to them.  Many states do allow for the HOA's to use a variety of means to collect the outstanding dues.  Liens to the property may be added or the home owner's wages and bank accounts can be garnished with a court's permission.  Access to association amenities can be blocked for non-payment. 

HOA's typically only choose to take these drastic measures when they get nowhere else with the home owners.  Legal fees can add up to thousands of dollars. Without enough home owner's paying their dues, an HOA may soon find itself insolvent.  The home must be at least $2,000 behind in their dues before an HOA in Georgia can initiate foreclosure proceedings.  To pursue the foreclosure, the HOA must file a lawsuit.  The time frame generally runs 4 months to sometimes over a 1 year.  Should the mortgage company foreclose first, the HOA's are typically left with nothing. 
 
HOA delinquency and budget issues may also impede new home owners from obtaining financing.  PUD's generally do not require any review by the lender.  A condo, on the other hand, can be difficult to finance.  Should more than 15% of the home owners be more than 30 days delinquent on their HOA dues, the condo project might not meet current eligibility requirements.  Inadequate reserves is another hindrance that many neighborhoods may also face. 

In the end, if your neighbors are not paying their dues, it may have a negative effect on you.




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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!

 

Also check out:

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Rodney Mason is a Sr Loan Officer located in Atlanta, GA.  He is also 203K Renovation Loan and HomePath REO Property Specialist.  He can be reached at (404) 591-2453.

Providing financing for cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.


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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Jenna Dixon 07/12/2010 06:47 PM
  2. Roy Kelley 07/12/2010 06:49 PM
  3. Judi K Barrett 07/12/2010 08:22 PM
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Rainmaker
161,545
Jenna Dixon
DRA Homes (Atlanta, GA) - Marietta, GA
Associate Broker - Let's Talk Atlanta Real Estate

Rodney,

Nicely written post.  Very informative.  I am sure many property owners were not aware of this being an option for the HOAs.  Alas, it is another sign of the times as many HOAs are struggling with collection issues which are limiting their abilities to keep amenties up to date & bills paid.  Which, if you have ever been into a community who couldn't open the pool, impacts property values and makes the neighborhood less appealing to buyers.

Round and round we go!

Jul 12, 2010 06:44 PM #1
Rainmaker
347,212
Rodney Mason
Prospect Mortgage - Atlanta, GA
FHA 203K, USDA, VA, HomePath Renovation Specialist

Jenna...Thanks.  Home owners do need to think twice before making missing HOA dues for the sake of a cable bill. 

Jul 12, 2010 08:02 PM #2
Ambassador
1,924,188
Judi K Barrett
Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma - Idabel, OK
Broker/Owner, Integrity Real Estate Services -IDAB

Rodney, Homeowners need to be aware and think about not paying their HOA dues.  It would be terrible to lose a home due to not paying these fees!

Jul 12, 2010 08:20 PM #3
Rainmaker
1,745,101
Dorie Dillard
Coldwell Banker United Realtors - Austin, TX
Realtor-Canyon Creek- NW, Austin TX Homes For Sale

Good morning Rodney,

In the community I live and work in it is impressed on each buyer at the closing table a lien can be put on your home if you fail to make the payment. It is true and you can lose your home if you don't keep up your dues. Great post, well written and informative!

Jul 13, 2010 08:27 AM #4
Rainmaker
45,560
Lori Cofer
Beasley Realty - Moscow, ID
REALTOR, Moscow Idaho Real Estate

Thanks for bringing this to homeowners' attention.  It's important to keep up on one's dues!!!  The penalty could be very steep!!!

 

Thanks for sharing,

Lori Cofer

Jul 13, 2010 09:05 PM #5
Rainmaker
347,212
Rodney Mason
Prospect Mortgage - Atlanta, GA
FHA 203K, USDA, VA, HomePath Renovation Specialist

Judi....There are some former home owners out there who have one just that.

Dorie....It's good to always reinforce that requirement to buyers. 

Lori....There is a steep penalty for not paying.

Jul 13, 2010 10:38 PM #6
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Rainmaker
347,212

Rodney Mason

FHA 203K, USDA, VA, HomePath Renovation Specialist
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