Homeowner Association Liens Might be More Valuable Than Anyone Realizes

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Funny how things come full circle. Back in the 1970′s, 80′s and early 90′s I was heavily involved in representing hundreds of associations for homeowners — condominium, cooperative, and homeowner associations. I litigated everything from recreation leases, construction defects, to liens for unpaid assessments or maintenance expenses. I published several articles and conducted a number of seminars on the subjects affecting these associations. Back then the liens were simple and there were issues between associations and lenders, but they were usually easily resolved.

So I get a call from someone in Florida whose parent owned a condominium apartment in a condo I represented back when I did that sort of thing. It turns out he owns the property that his parents once occupied and he has been following my blog with great interest for a while now. And his main question was “If we can agree that the lien of the association is a valid enforceable lien, then is it possible that the defects in what appear to be liens and encumbrances with higher priority could put the Association in first position?”

BAM! I was an expert witness on condominium and homeowner association law, an experienced litigator of all sorts of issues for these associations, and even had a “foreclosure mill” of my own, that enforced the liens and collected the money due, since it was rarely the case than anyone would let the property go just for unpaid assessments. But it had never occurred to me that in many if not most cases, the current round of fake securitized mortgages was sitting behind a valid lien from the association.

To make a long story short,”Yes,” I replied, “if the initial mortgage is defective or defects were introduced into the chain after the closing with the homeowner, then a properly filed and duly executed lien by the association would be sitting in either first position, or a position in which they could claim first position. This would greatly increase the likelihood of earlier and full payment of all outstanding liens, together with costs, and attorney fees and interest.”

The ramifications of this epiphany are enormous. Most of the new construction in recent years has been subject to governance by enabling documents creating an association that has the powers of assessment, rule enforcement, hiring contractors for common areas, hiring lawyers etc. Most of these associations are looking at much higher percentages of people who are not paying the assessments and not paying off the lien because they are already underwater. Or more correctly, perhaps we should say that they THINK they are underwater because they THINK that the mortgage is a valid recorded instrument that is enforceable. Most likely they are wrong and that is the message of this blog — to get people to stop and think before they abandon the most valuable asset in their lives — and now to stop associations from ignoring the value of their liens.

Most associations are looking at these liens as less than worthless. Some of them are not even bothering to file the liens. But if they foreclose on their lien, they could name the mortgage holder of record as a junior or non-existent lienholder because the lender of record is no longer due any money or never was dude any money depending upon whether they originated the loan with their own money or credit, or if they were simply the typical straw-man sitting in as a fee paid performer to look like a lender but act like one.

As we have seen in more and more cases, when institutional plaintiffs (associations included) make the same allegations as borrowers are making in the courts they are taken far more seriously by the Judges. Proactive associations  could therefore go after these liens aggressively and do a favor for everyone — except the banks who have no money in the deal anyway.

By knocking out the pretender lenders as an institutional plaintiff representing dozens, hundreds of even thousands of homeowners whose assessments will be effected by the non-payment by other homeowners, the Association clears an easy path for collection in full, and for the homeowner to retain the property and live in it, thus avoiding the future problem of a ghost town or half empty association where there is not enough money or resources to get the job done of running and maintaining the condominium, coop, or homeowner association. What these associations need is for their lawyers to get up to speed on securitized loans, get securitization searches like the one we offer (see link next to my picture) and file against the banks, who, in my opinion, will fall like dominoes, settling the claims of the association with payment in full.

Whether you go all the way through foreclosure or you settle with the pretender lender, the property owner (homeowner) will have the path cleared for him to make the same allegations, but this time with greater weight than is currently received in courts around the country.

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19 Responses

  1. So Neil that may explain why the hoa HAS NOT placed a lein on the property since the developer have their own men on the board of directors also for the community association ( very tight) you know who im talking about big Az developer. Howver the hoa sent me a bill to my rented apt for a couple of thousand after hsbc got the ” trustees deed upon sale” via credit bid for the love of god

  2. Question Please: I have been pondering this sort of thing for a while. I was contemplating how to obtain a small condo to live in after they siezed my home using obvious and well-known robo-signing operations to “create” apparent standing and attempt to impart or obtain a waiver of jurisdiction. Typical story.

    But now Im really gunshy–more or less it appears that it is “open season” on consumers and small investors [ie retirees] . So I was afraid of what happens when one buys a condo with the fees —-and then a large number of fellow condo owners are shoved under the wheels of the bus—and the condos are vacant, destroyed etc–or some dont pay fees because caught in this squeeze by servicers.

    My thinking is that there is a master financer for common grounds and the fees are covering that ongoing association liability. So if not adequte fees then the whole association defaults?

    And if the association defaults–does that wipe the individual owners’ interests out ?

    And how can the association stand second in line——-did the association fees not have priority over mortgages granted by owners who themselves are subject the fees.

    More succinctly, how can a condo mortgagee have rights that exceed those of its grantor homeowner?? Would the fees not be superior liens as are property taxes and assessments.? did the condo associations agree to be subordinate to the mortgagees?

    I do not pretend to know how these things are financed but WOW this is a real blight issue

    Would the condo loans be CMBS?

  3. THANK YOU BRIAN DAVIES!!!

  4. zyzyxxx—This guy tried to do as you suggest, and look what happened to him:

    http://blogs.ocweekly.com/navelgazing/2011/05/michael_thoedore_pines_zepeda.php

  5. @zyzyxx

    How do you propose that the average broke citizen trying to save their house from being stolen react when a judge throws them out of the court when they show paperwork proving fraud???

  6. First and foremost under-stand this…
    THE BANKS LOAN NOTHING!
    There is NO money, only debt notes. The United States has been in Bankrupcy snce 1933. SO the whole IDEA of a loan is a fictional concept. And those that engage and actually look for and ask for a loan are asking to be a part of an illusion. Are you all crazy?
    Just consider that we live in an age of HIGH-Definition TV and 3-d images and THX SOUND all of which is projected to us in fictional movies and stories. It all looks and sounds better than “reality”.
    Yet, that which is suppose to come to us in the news and information of reality is clouded in the poorest quality images and sound projected from cell phone recordings and bad YouTube images and of course the Mainstream media.
    The truth of war and the results of it are kept from our mind stream or shown to us only in 2 second unmemmorable clips. Blurred images and information that is cut short in order to keep our minds focused on the fictions rather than the facts and truth.

    Now consider the “Clouded Titles” and lack of documentation that points to truth. Lost Deeds of trust, missing “Promissory notes”, Chains of title.

    Yet most people would rather pretend than face the truth.
    It’s plain to see that Americans are just not hungry enough, not angry enough.
    Amercans are all soft, weak people lost in illusion.
    Mean while the Quasi-defacto government is in full collusion with keping you all in the dark like mushrooms and keep feeding you all Bull-Shit and you don’t want to believe it is the truth. You’d rather spend $12.50 to watch a 3-d version of “Pirates of the Caribean” with fictional pirates than realize the real pirates are robbing you all of house , home and nation wealth because you feel entitled to free-benefits just because this is America.

    GOD is not going to save US. Only You can. SO you all better wake up and get damn Mad as hell and start getting organized and attach these bastard money baarons, attorneys and judges are the complient culprets too. tHat’s why we are not getting anywhere.

  7. LOAN MODIFICATIONS are Nothing More than the banks skating from legal proceedings against them.
    The banks are RICO Racketeers. When one “re-contracts” with them it let’s them off the hook. Because the people don’t want to recognize the banks are criminal operations that need to be made accountable for felony crimes, they inadvertently let them off the hook.
    Until people stop their weak-kneed-mind of denial, and recognize they have a responsibility to report Felonious Crimes such as these banks are in continues process of, the people willfully breach their responsibilities of protecting this country from these domestic terrorists.
    This whole nation is financially falling into an abyss because the people are asleep and choose to remain ignorant. They are lazy minded children.
    I am so disappointed in the American people.

    The whole world watches us and laughs. Because we “allow” our young people to go fight off in foreign countries and die while the lazy ass Americans waste their sacrifices to be entertained by distracting propaganda and lies that make slaves of us all.

    Americans work as servant slaves and give all their wealth away to thieves. DUMB, DUMB, DUMB!

  8. Yes, I am well aware of the “loan mod fraud”…I see people on the news today—at a NACA “convention”— waiting in line in Los Angeles, hoping for a loan mod…and all I could think of is I wish there was a way to let them all know about the fraud that they are all being duped into—I thought NACA was on the side of the people—I guess not…

  9. carie,
    A loan modification is a new contract, just like a refinance. In my opinion, they aren’t going to treat the people any better; it’s to get more money out of you legitimately and to get a security interest with a note in the home, so they can foreclose on you without hitting the issues of the ‘fraud foreclosures’.

    Of course, it’s my opinion only and not worth the digits used to put it on a webpage.

    Trespass Unwanted, life, allodial, corporeal, live born, born alive, free, freeman, in jure divino, in jure proprio, adult, whole blood

  10. NEW ARTICLE FROM PROPUBLICA—

    NO SURPRISE—HOMEOWNERS GETTING SHODDY TREATMENT EVEN AFTER LOAN MOD:

    http://www.propublica.org/article/even-after-mortgage-modification-shoddy-bank-practices-continue-to-hurt-hom

    Oh, and whats up with NACA? Are they getting paid by the banks to get people to waive rights to get a “loan mod”???

  11. Davies v. Deutsche Bank National Trust Company Appeals Appendix, full docket including denied motions for releif from stay by Onewest and Onewest as servicing agent for Deutsche Bank National trust Company as Trustee.

    examples of oppositons x 2 for motions for relief contested motions.
    original complaint with answers
    motions for judgment on the pleadings
    oppostions to motions
    emergency motion for stay.
    notice of appeal.
    designation of records
    all cook book to help those who need it.

    http://www.scribd.com/doc/56959118/Davies-Bap-Volume-2-davies-v-detsche-bank-national-trust-company-as-trustee-of-the-Residential-asset-securitization-trust-2007-A5-under-the-pooling

    http://www.scribd.com/doc/56958138/Davies-Bap-Volume-01-Davies-Bap-Volume-2-davies-v-detsche-bank-national-trust-company-as-trustee-of-the-Residential-asset-securitization-trust-2007-A

  12. I’m confused. I thought the title company and the mortgage company said there as ‘no prior’ lien on the property when I bought it.

    I’m confused. Is this saying there was a prior lien or the lien happened if the homeowner didn’t pay dues, before it stopped paying the ‘one trying to steal the home with out a security interest and note’?

    I had an improperly filed lien. Company A, not the HOA, used their letterhead (and they are not the lien holder) filed the lien under their name, Company A, in the county but the recording was filed using the name of Company B. I filed a notice that it was invalid because the lien was from someone who was not the association and not entitled to lien me and stated within that they used the association name on the filing to legitimize their claim, but I have no contract with them.

    The bank stole the home while that was out there. But seeing how the judges handled the situation, which to me if they don’t know real estate law of the state, then they shouldn’t sit on the bench and decide anything, they are just as fraudulent as the fake claims that come in.

    How you going to judge that a thief had a better case than the property owner, unless there is something you haven’t fully disclosed about the transaction? Maybe getting fees to enter your court is in your best interest, an a conflict of interest to the home owner?

    Anyway, no free houses. If the money was loaned to me with a maturity date to pay it all back, and the bank never intended to hang around and get paid, then they should have disclosed they only last 10 years or less and chances are likely many will handle the deal before I pay off the obligation.

    If the money was ‘created’ at the time I placed the signature, and the maturity date of the loan is 30 years, then I have 30 years to pay it, even with the ‘per anum’ interest rate, and then by power of sale if I haven’t paid it off, you can come take it.

    It’s crazy that entire process.

    In the future, anything that doesn’t bode well on any contract including (car/house/braces,whatever); I’m at least clarifying my understanding of the terms, such that ‘what is said, is said, and what’s not specifically stated in the contract is not allowed by anyone even an attorney representing the client’.

    bytheway, where are you hearing that foreclosures are voluntarily dismissed?

    Texas had a freeze on the sale of foreclosed homes while it investigated and I’ll be darned if that law firm didn’t wait until the ‘NOD’ was not listed on the web page of the county and ‘fraud sold’ the home to a family using ‘Quicken Loans’.

    The title company was in on it. I know but won’t say how I know. I can prove it too, but won’t say how I can prove it.

    Imagine my shock when someone took shelter in my property.

    I was pushed off my land like early Americans pushed the Indians off their land.

    Payback is a mutha.

    I was still getting mail there, even if I was prevented access by the Realtor locks on the door and the water faucet outside and who knows where else he had those locks to hold my property.

    I’m not sure why the AGs are trying to settle, but a lot of things are going on financially. In my opinion, Fed has lost it’s powers and the Treasury had finally taken over, and the AGs are BAR people and only represent ‘persons’, and we may be going back to a Constitutional form of government where ‘We the People’ walk on the land again.

    I sure hope so. I don’t care if news seem like bad news. Obama is doing things different from previous presidents, and if it’s an unravel well who’s going to want that? You got the group that wants the status quo, and the group that don’t want their entitlement touched, and groups that want the last 100 years of junk to be unwound and if that means cutting back, laying off, removing, deleting, charging, etc…for a little while, then we are patient while all this takes place and our life is interrupted. At the Depression, our life was interrupted for us to be treated like slaves and robbed by those that were in power, hopefully now if we end up in a Depression kind of state, when we come back out, the power belongs to the People and we can own our land and not be tenants any longer and we can pay for things with a currency backed by some resource and be a nation of wealth again.

    If I ever purchase property. NO ONE not even an HOA will have a lien or claim to it.
    I found out from an attorney that HOA’s own the land and that we are using it, but they are responsible for it and taking care of it, so you have to abide by their covenants because they haven’t really sold the land to the developer (so to speak).

    Trespass Unwanted, life, allodial, corporeal, live born, born alive, free, freeman, in jure divino, in jure proprio, adult, whole blood

  13. As far as I know, my HOA cannot foreclose, but can add 15% to a late pay and take it to small claims court to get a judgment for the annual fee and attorney’s fee. Is this post about some other type of HOA?

  14. This is brilliant and there will be some H.O.A’s that will care and take off on this. Every baby step taken will help Americans gain ground against these banksters.
    Anyone in the Seattle area that would like to become a part of organizing non violently against the banksters contact me. There is a group forming in our area to block these banks. It is new to me and I am going to join them at a meeting this coming week. I have to receive a call back for the time and location and will be glad to spread the word. I plan to be at the Seattle protest Wikileaks is staging June 14, 2011 11AM to 1PM downtown Seattle at Bank of America 408 Pike Street , 98101on the sidewalk and not in the streets at all.

  15. some HOA’s don’t care and don’t get invloved. I have heard of some pretend lenders voluntererly dismissing its foreclosure and the HOA is still not getting paid and the HOA still does not participate or force the issue, after years of lost HOA fees in condo buildings that have many empty units and no one buys in the building because of the HOA stigma known by realtors for the building.

  16. My H.O.A. is owned by Wells Fargo, the developer and the builder. So they do not care.

  17. B-r-i-l-l-i-a-n-t!

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