How to Effectively Reduce HOA Delinquency Rates to Qualify for FHA Backed Loans

PARKVILLE, Md. - April 16, 2013 - PRLog -- As all Board Members know by now, collecting assessments has been a very trying issue given current events with the job market, foreclosures and under water properties. Home owners within community associations don't fear liens like they used to.

As a result, communities across the country are bleeding from the cost associated with collecting assessments. First comes the labor and costs involved to exercise internal policies and then the legal fees associated with any efforts after the internal policies fail to produce results, i.e., attorney costs for filing liens, obtaining judgements, collection, etc. Next thing you know, years have gone by and still no effective results.

So we posted the issues to forums online and opened up the discussion of how to reduce delinquency rates so that FHA will back mortgages within those communities. We found only one solid solution:

• Sell and assign the liens and judgements to get them off the Associations' Books.

Once Sold and Assigned, the HOA has no further accountability or liability. This method presents several advantages .

• FHA Backed Loans will bring buyers into the community and potentially raise market values.
• Banks will qualify new owners possessing greater financial resources to pay assessments.
• Buyers of Auctioned Liens/Judgements will expense foreclosures, etc.
• Communities will recapture some of their costs for otherwise non performing assets.

Assigning Liens/Judgements is relatively easy and inexpensive. It is only appropriate in certain situations but does offer an effective result. Communities are encouraged to seek their legal counsel on the pros and cons of doing so since the laws vary from State to State. Also note that "both current and previous owners" with existing liens and judgements can potentially be auctioned.

Richard Atzrott is a Managing Member of Smart Options 101 LLC, Owner and Operator of http://MeanLiens.com, an Online Auction Portal for Liens and Judgements. 3012 Oak Forest Drive | Parkville, MD 21234 | 443-219-3175.