Unjust HOA assessment credit reporting needs Fed legislation

Ward Lucas reported in his Neighbors At War site (HOAs Getting Into The Credit Reporting Business) that consumer credit card reporting businesses were starting to report delinquent HOA assessments.  He references Keep Condo Fees Out of Credit Reporting by Patrick Brady and Mark Einhorn reporting that Equifax will start reporting delinquent HOA assessments. Must read!

The article covers with the gross injustices that homeowners will suffer as a result of major problems in the reporting of delinquent assessments by HOAs. Read the article and see how slipshod HOA reporting and inaccurate documentation of delinquent assessments can harm the HOA itself.  Of course, it relies on the homeowners not being knowledgeable about their rights and the obligations of the HOA that are being abused, which sadly, is the norm.

I cannot rationalize why Equifax, or any other credit agency, would allow itself to become part of a gross injustice against homeowners living in HOAs.  Especially when the homeowner cannot stop the action of the HOA, like in any other credit transaction by sending a certified letter that prevents the HOA from taking any action until resolved, if disputed by the debtor.  It is another device to intimidate and punish owners without due process protections. Equifax is now involved in the HOA quagmire.

Federal legislation is necessary to protect the homeowner in an HOA from such abuse by unregulated HOA private governments.  Allow the same credit protections as with other credit card delinquencies and stop credit agencies from reporting HOA delinquencies.

Published in: on October 20, 2016 at 7:03 am  Comments (4)  

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4 CommentsLeave a comment

  1. I had thought that this was a better avenue than lawsuits as a way to give the board enforcement powers without the need to foreclose. But I can see that I am wrong. In Utah, lawyers are exempt from the collection laws that oversee collection agencies. So they are very careful not to call themselves “collection agencies” but use such inoqueous terms as “collection enhancement”. We were caught up in this. the collection agency did not check to see if members really owed money (they took an incompetent board’s word for it), they did not respond AT ALL to the member’s disputes–even certified letters. They just sent a letter demanding money and their fees and proceeded no matter what the homeowner said or tried to do. Many of our members paid $500 to $1000 in fees that they did not owe because of this incompetent revengeful board. We did oust them but the new board is lax. They work, they don’t have time, they don’t understand the law and so the big powerful CAI affiliated law firm got away with it!

    Now what I’m going to say is harsh but I will say it anyway. The homeowners got what they deserved. Why? Because the handful of us who understood why we should not have hired the law firm in first place were villanized with members quite willing to believe we were the troublemakers. They refused to look at or consider the facts. Then they and their neighbors got caught in the trap–they were either friends with the board or had the board go after them.

    The upshot was that homeowenrs were punished, the association was put in great peril (30 illegal liens were placed on our lots–which would be triple damages if anyone went after us) and all kinds of laws were broken.

    They say you get the government you deserve–until homeowners start listening to advocates who actually study the situation, homeowners are getting the “unregulated HOA private governments” they deserve.

    • Sorry–in first few sentences not “the collection agency did not check to see if members really owed money” but the “LAW FIRM doing collections did not check to see…”

  2. Think, FDCPA, Arizona FDCPA (§§ 32-1001 and 44-1691 thru 1712) and vicarious liability.

  3. It is very important for homeowners to realize their credit scores could be compromised. This is another way for bad boards to abuse their fellow neighbors.

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