LETTER: Plenty of problems with the foreclosure process
A Feb. 3 Review-Journal editorial had the audacity to attack a homeowner association’s legal right to foreclose a property using its super priority lien rights. The Review-Journal feels this action is wrong because the mortgage holder’s rights are being unlawfully extinguished.
What everyone needs to understand is that there are plenty of things wrong with the system.
By law, HOAs are allowed to collect up to only nine months of delinquent assessments. This restriction forces HOA boards to act more quickly to stem the loss of revenue. This restriction was enacted into law at the urging of the banks about 10 years ago over the opposition of a legislator who had proposed 24 months. Depending upon who you ask, fines and legal expenses might or might not be recoverable. Presently homeowners have the right to reclaim their foreclosed property within 60 days. Even if they don’t have the funds, they can contact their mortgage holder who would likely reclaim the property on their behalf.
Without delving into the finer points of these issues, here is what the Legislature has repeatedly failed to do:
The vast majority of homes have a mortgage. Therefore the first mortgage holder should be responsible for collecting and paying the monthly assessments. If they are not being reimbursed by the homeowner, then it sets off a red flag. Beginning 90 days prior to any foreclosure, the law states that all parties must be formally notified in writing and the information posted at the county recorder’s office.
To eliminate any confusion, the law should also state that for every property all mortgage holders, banks, loan companies and private investors, are required to post and keep current their contact information with the county recorder.
Finally, HOA’s must be allowed to collect all delinquent assessments and expenses incurred in the process of a foreclosure. Let’s be fair: HOA’s do not want to be in the collections and foreclosure business. By law, we are not allowed to make a profit; losing money, however, is still completely legal.
