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Lawmakers want to pare down HOAs’ power in foreclosure

Friday, May 29, 2015 | 2:32 p.m.

Lawmakers who say a recent Nevada Supreme Court decision has given homeowners associations too much power to foreclose over unpaid dues are pushing for a last-minute legislative fix, saying the ruling could drag down the recovering market and threaten Nevadans’ ability to get federally backed loans.

Changes could come through Republican Assemblyman David Gardner’s bill, AB 359, which deals with so-called “super-priority liens” placed on homes by HOAs. The bill has not yet been scheduled for a hearing, but Gardner said lawmakers are actively working on the measure and he expects it will be up for discussion sometime in the final four days of the legislative session.

Real estate agents and mortgage lenders are sounding the alarm about the Supreme Court’s September decision, which said that unpaid HOA dues should not only be the first thing paid when a foreclosed home is sold, but that that they can also extinguish a mortgage itself if a bank doesn’t address the lien for HOA dues.

That goes further than the how many interpreted the law in the past — as requiring up to nine months of HOA dues and collection costs paid off first when a foreclosed home is sold.

HOA industry representatives support the stronger interpretation. They say the high stakes force banks to take HOAs seriously and pay dues, ensuring responsible HOA members aren’t picking up the slack from their delinquent neighbors and the infrastructure, landscaping and public areas of an HOA are maintained.

“If the bankers and realtors succeed in eliminating the super priority lien, the entire burden of unpaid assessments will shift to those owners that do pay while banks continue to strategically delay foreclosure,” wrote Norm Rosensteel and Donna Zanetti of the Community Association Institute Legislative Action Committee in an editorial published earlier this week in the Reno Gazette-Journal. “Once again, the homeowners that have worked hard to play by the rules will end up paying the price. It is time to protect homeowners, not predatory lenders.”

But real estate agents and banks say the balance of power is too far in the favor of HOAs, and such a situation is a threat to the market. They back AB 359, which would prevent mortgages and other liens from being wiped out in an HOA foreclosure.

Realtors say the Supreme Court ruling has led to expensive homes being foreclosed upon and auctioned for a fraction of their worth because the owners haven’t caught up on relatively small HOA dues of often less than $100 a month. When the HOA forecloses and an HOA’s super-priority lien cancels a bank’s legal claims to the mortgage, the ownership trail becomes murky, the cost of title insurance goes up and the home’s resale value drops.

The Federal Housing Finance Agency, which regulates federal lending agencies, including Fannie Mae and Freddie Mac, has already raised concerns about the situation in Nevada. An official from the agency testified on the matter before the Legislature in April, and the agency later issued a statement saying it would aggressively challenge HOAs whose foreclosures wiped out federally backed mortgages.

“Their signal is strong. Their signal is pretty to-the-point,” said Keith Lynam, president of the Greater Las Vegas Association of Realtors. “We’re such a tumultuous market. It’s irresponsible of us not to take it seriously.”

Lawmakers have sought to ease the high stakes with SB 306, a bill that aims to give banks and borrowers more warning before their homes go to auction and a mortgage liens are extinguished. That bill is awaiting Gov. Brian Sandoval’s signature.

Republican Sen. Becky Harris is backing a bill, AB 240, that creates an intermediate-level solution — one that would require “impound accounts” where lenders store up money that could be withdrawn to pay HOA dues in case of default.

Real estate industry representatives say something needs to be done to avoid a setback in the market.

“We don’t need another shot to the stomach,” Lynam said. “The Legislature has got to act.”

Article source: http://lasvegassun.com/news/2015/may/29/lawmakers-want-pare-down-hoas-power-foreclosure/

Copper thieves, threat of foreclosure afflict Troy Baptist church

Troy

The Rev. Dave Lewis looked weary when I met with him Friday morning. He looked like a man who has weathered one crisis, only to be faced with another.

In January, thieves entered his Sixth Avenue Baptist Church and stole its copper pipes, also robbing the building of heat and water. It took nearly four months for the church in Troy’s impoverished North Central neighborhood to repair the damage.

Then, THE LETTER arrived.

It was from the city of Troy. It said the city would foreclose on the church unless it paid $115,000 in back property taxes by early August. The city is demanding an additional $22,000 for a church parsonage in Lansingburgh.

Tax bills for a church?

Churches are supposed to be tax exempt.

Well, let’s just say there was a … let’s call it a snafu.

See, for seven years the building was used by the Rev. Willie Bacote, the attention-grabbing and often controversial preacher. The Sixth Avenue Baptist Church continued to own the building, while allowing Pastor Willie to use it for his Missing Link Street Ministry.

To keep nonprofit status, churches are required to file paperwork annually with the city.

Lewis believed Bacote was doing so. But Bacote never did. And if tax bills arrived, they were apparently ignored, year after year.

“I’m not going to throw Pastor Willie under the bus,” Lewis said, sitting in a room at the back of the church. “We were both at fault.”

Bacote moved to South Carolina last year after selling his Lansingburgh home to Stewart’s Shops. When Pastor Willie departed, Lewis attempted to keep the church operating. It hasn’t been easy.

The church, built in 1913, is a high-maintenance structure, even before the copper pipes were stolen.

The theft was a blow, but Lewis believes it came with a silver lining. It helped the church reconnect with the community, he says, including people who may have been alienated by Bacote’s tenure.

Lewis was also pleased by the outpouring of support, financial and otherwise, that helped the church get back on its feet. It seemed to show that the church was needed and wanted.

But the potential foreclosure is a much more serious threat. It could end the church’s 102 years of service.

Yes, the church is primarily at fault. It should have kept up with its paperwork.

But the city’s bill — $77,000 in back taxes, plus $9,100 in fees and $29,100 in interest — is also outrageous, because it’s based on an outlandish assessment that claims the church has a value of $350,000.

That’s in a city and region dotted with abandoned, historic churches that can’t be given away.

That’s on a block were one building sold last year for $16,600 and another sold for just $12,000.

And what would foreclosure accomplish?

Nothing good.

Most likely, it would leave Troy with yet another vacant church.

It would also rob the neighborhood of all that the church does — the food and clothes it gives away to the needy each Sunday, the Toys for Tots program that donated Christmas gifts to 124 families last winter, and the meeting of neighborhood teenagers that Lewis hosts each Wednesday.

The pastor is promising to contest the foreclosure — even if he isn’t sure how to go about doing that, exactly.

“We’re going to stay here. We’re not leaving,” he said. “They can hit us with all the eviction letters they want, but we’re not going without a fight.”

Does the city really want to do this?

At this point, it has no choice, said city attorney Dan Vincelette.

The city has no legal ability to forgive a tax lien, Vincelette said. Apparently, only the state Legislature could absolve the Sixth Avenue Baptist Church of its debt to Troy.

Lawmakers have made similar moves before: Several years ago the Legislature erased taxes and penalties “owed” by several churches and other nonprofits in Schenectady that were caught off guard when the city began enforcing the state law requiring them to file yearly for tax-exempt status.

Will the Legislature step up for the Sixth Avenue Baptist Church?

Let’s hope so.

Lewis said that if the church ultimately loses the building, its spirit and ministry will continue. Both are bigger than a physical structure, he said.

But the building is important, because it roots the church in a neighborhood with a median household of just $21,592, where 73 percent of children live in poverty, according to the census.

It’s the neighborhood where Lewis was raised. He believes God called him to return and serve it.

He just didn’t know that outrageous tax bills would be part of the equation.

cchurchill@timesunion.com518-454-5442@chris_churchill

Contact Chris Churchill at 518-454-5442 or email cchurchill@timesunion.com

Article source: http://www.timesunion.com/tuplus-local/article/Copper-thieves-threat-of-foreclosure-afflict-6296936.php

Central Ohio foreclosure rates down

Central Ohio foreclosure rates continued to drop during March, according to data released last
week by the mortgage and information company CoreLogic.

CoreLogic found that 1.17 percent of mortgages were in foreclosure in March, down from 1.61
percent a year earlier.

Central Ohio’s foreclosure rate was also lower than the national and Ohio rates, both of which
were 1.39 percent.

 

— Jim Weiker

jweiker@dispatch.com

@JimWeiker

Article source: http://www.dispatch.com/content/stories/home_and_garden/2015/05/31/01-foreclosure-rates-down.html

Former Navy SEAL Brandon Webb under fire from critics – The Virginian

On Thursday, former Navy SEAL Brandon Webb was at a bookstore in San Diego, preparing to read an excerpt of his latest book, which tells stories of Webb’s friendship with eight service members who were later killed in action.

It was the second stop in a nationwide promotional tour, and already the patriotic memoir, “Among Heroes,” was getting lots of attention – the latest in a series of best sellers by a man who’s become a media mogul since leaving the Navy in 2006.

As Webb has acknowledged in numerous interviews, he’s made some people angry during his rise. Now, among a special operations community often unwilling to air its dirty laundry in public, some are starting to speak out.

In the wake of “Among Heroes,” which hit bookstores a day after Memorial Day, and after a profile of Webb in a recent issue of Men’s Journal – “Navy SEAL Inc.: How former sniper Brandon Webb built a media empire around the elite U.S. military’s crumbling code of secrecy” – a number of Webb’s former teammates and business associates have come forward, alleging he has embellished his combat experience and sometimes exaggerated his association with the fallen to capitalize on their service and build his own brand.

Shortly before the San Diego book signing, someone called the store and tried to persuade a manager to cancel the event. The anonymous caller’s claim: Webb hadn’t gotten approval from all of the widows whose husbands were featured in the book, and some are angry.

The event went on as planned.

A night earlier at a Webb book signing in New York, college students stood outside and handed out copies of a piece written by retired SEAL Jimmy Hatch, criticizing those who profit from the legacy of fallen troops.

The article, a QA with the widow of a SEAL that appeared on TheCipherBrief.com, didn’t name Webb, but Hatch confirmed that the widow he spoke to was upset when she learned Webb had written about her late husband without her approval.

“Her husband, when he was alive, had actually told her he couldn’t stand Webb,” Hatch said.

“She was never contacted by Brandon Webb, she’s furious and offended, and she’s not the only one who feels this way,” said Hatch, who retired from Naval Special Warfare Development Group, or DEVGRU, commonly known as SEAL Team 6.

A Virginian-Pilot reporter spoke with the widow and confirmed her account, though the newspaper is honoring her request to remain anonymous.

In the book’s opening pages, Webb writes, “As much as possible, stories of my friends and their exploits have been compiled in full collaboration and partnership with family members.”

Reached by phone Friday, Webb declined to be interviewed. He asked for written questions, which he later responded to by providing copies of his military records. He also provided contact information for family members who spoke to him for the book.

“I have no other comments for you on this matter,” Webb wrote.

It appears Webb spoke with at least one family member of each of the eight men he wrote about – if not the service member’s widow, then a parent or a sibling. Several family members wrote supportive reviews printed on the book jacket, and some family members were recorded telling personal stories about the fallen for an audiobook version.

Cindy Campbell, the sister of Chris Campbell, one of the featured SEALs, said Webb shared a draft of the story he wrote about her brother at a time when she was struggling with depression. The excerpt perfectly captured her brother’s personality and seemed to bring him back to her, she said.

“I am so grateful for that,” she said. “This is not about possessing my brother. He’s not one person to own. Nobody owns his memory.”

Hatch contends, though, that there’s a difference between speaking with a fallen SEAL’s mother, or siblings, and getting approval from a spouse, who often knows best how her husband would like to be remembered, he said. And given recent threats made by the Islamic State group to harm veterans and their families in the United States, Hatch said, the widow and mother of a SEAL’s children should have some right to keep her husband’s operational accomplishments secret.

“I think it’s despicable,” he said, noting that Webb hasn’t indicated he will give any portion of his book profits to charity or the families of the men he wrote about. “It goes against everything most decent Americans would expect from someone who is making money by talking about deceased friends.”

This apparently wasn’t Webb’s first run-in with SEAL widows. Earlier this year, the author and founder of a website called SOFREP vented about them in a Facebook post:

“There is a small and sad group of SOF widows who can’t move on,” Webb wrote in a comment published on Feb. 22, using the abbreviation for special operations forces. “They drink too much, pop prescription pills like tic tacs, sleep around, and use SOF/Military charities as their own personal ATM machine when the money gets low. They like to stir up drama to remain relevant.”

A few women wrote to Webb, complaining about the comment. He responded on Twitter, for all of his nearly 20,000 followers:

“I stand by that statement 100%. Not all SEALs are good guys and not all Widows are saints,” Webb wrote.

____

Webb spent more than 13 years in the Navy, about eight of them as a SEAL, and completed one deployment to Afghanistan before leaving the service in 2006. His biographical materials often cite four deployments to the Middle East, but the first two came prior to 9/11, one as a rescue swimmer aboard a ship. The fourth trip occurred after he left the military, when he went to Iraq as a civilian contractor.

After returning from Iraq, Webb pursued a series of business ventures, including an ambitious plan to open a sprawling Blackwater-style military shooting range in the California desert. After raising a few million dollars in venture capital and from individual investors, the project collapsed under political opposition, environmental issues and legal challenges.

Webb resigned as company president a few months after running out of money and losing the shooting range property to foreclosure, according to documents provided by a former business partner.

In 2010, Webb became a contributor to Military.com, writing for the site’s special operations blog. The following year, he became editor of the blog and built a significant following, posting about the special warfare community from an insider’s perspective. Webb commanded a large audience, brought in new writers, and was about to become the site’s highest paid blogger.

“He was a star here,” said Ward Carroll, then editor of Military.com. “We were making plans to really elevate him in the company, and he was all about it.”

Carroll said he was stunned when, in 2012, Webb abruptly revealed plans to launch his own site during a meeting with top Military.com executives. He’d apparently been building SOFREP – The Special Operations Forces Situation Report – while under contract with Military.com, Carroll said, with the help of the company’s Web designers and a sales rep. To top it off, Carroll said, he immediately proposed selling the new site to Military.com executives, who declined.

“I mean, this guy’s got balls the size of Cleveland,” Carroll said. “At the same time, what an underhanded, Machiavellian move. We cut ties right there, ended our contract under the do-not-compete clause and had to fire three people. We were all kind of scarred by the episode.”

Despite the ugly breakup, Carroll said, he’s been impressed with Webb’s ability to market himself: “He was really the first generation of SEAL to capitalize on his star power. Brandon really invented SEAL as celebrity on some level.”

SOFREP came online at a perfect time, just as SEALs were exploding in national popularity, following a string of high-profile missions. Webb quickly became a darling of cable news networks, which often scramble for expert commentators when big news breaks.

After SEALs rescued Capt. Richard Phillips from Somali pirates holding him hostage, Webb went on television to comment on the mission. After SEALs killed Osama bin Laden, he did the same.

____

A chapter of Webb’s new book was making the rounds this week among current and former members of DEVGRU, based at Dam Neck Annex in Virginia Beach. They were most interested in the section featuring stories about Campbell, Heath Robinson and J.T. Tumilson. All three served with Webb early in their careers at SEAL Team 3, before they moved on to the most elite of SEAL units – the guys who pulled off many of the missions Webb talks about on TV.

All three died on Aug. 6, 2011, when a helicopter carrying 17 SEALs and several other service members was shot down in Afghanistan, killing everyone onboard.

Webb writes of his personal relationship with each of them, referring to them as close friends.

Dave Cooper, the command master chief at DEVGRU at the time of the crash, knew each of the men well: “Those guys never once mentioned Brandon Webb, so I don’t know how close of friends they were,” said Cooper, the highest-ranking enlisted SEAL at the command before his retirement. “But I can say the guys who are left behind at DEVGRU, who know and served with him, don’t think highly of him. Honestly, I haven’t come across anyone who does.”

Robinson’s mother, Debora Coxe, was supportive of the book and provided Webb with photos of him. She welcomed the opportunity to keep her son’s memory alive, she said.

“I didn’t tell Brandon anything he didn’t already know,” Coxe said. “In terms of the stories he included, I do understand you don’t talk about some of the things they do. Brandon knows what they do, he knows what you can say. So I look to people like him, who hopefully respect the code and will do the right thing. I just want the world to know about my son.”

Chris Osman served in the same platoon with Webb at SEAL Team 3 and said he was surprised to read about Webb’s close relationship with Robinson: “Without question, Heath did not like Brandon whatsoever,” Osman said. “He’d be rolling over in his grave right now if he knew he was in this book.”

For years, Osman said, he’s observed Webb embellish stories and exaggerate relationships, beginning with his first book in 2012, “The Red Circle,” which included stories about Osman and others in the platoon. Osman wrote an endorsement for the book before reading the manuscript, trying to help a friend, he said. After reviewing a draft of the book, Osman emailed Webb to point out he’d embellished several of the stories, and he asked for several corrections. Webb told him it was going to press soon, and it was too late to make changes, Osman said.

Until now, Osman, who once considered Webb a close friend, said he has remained silent. He said he didn’t wish to say anything to disparage a teammate. But the latest book has pushed him to speak out, he said.

“At some point, you’ve got to say enough is enough,” he said. “He’s become so brazen at this point, he must think he’s invincible.”

Osman highlighted the recent profile of Webb in Men’s Journal as an example. In the story, Webb recalled a predawn reconnaissance mission in Afghanistan in 2002, “when Webb and three other SEALs were surprised by 20 armed Al Qaeda fighters exiting a cave 50 yards from their position. Webb called in GPS coordinates and then returned gunfire, killing two fighters. The first set of bombs dropped but missed the cave.”

Webb wrote a similar story, but in much more detail, in “The Red Circle.” Both accounts are embellished, said Osman, who was on the mission. Two other SEALs who were there confirmed Osman’s version in interviews with The Pilot. According to the sources:

- There were about five enemy fighters, not 20.

- The fighters were more than 500 yards away, not 50 yards away.

- Webb did not shoot and kill anyone. Nobody did. The enemies were too far away for effective fire. They died only after a second air strike.

- The SEAL officer in charge, Chris Cassidy, who would later become an astronaut, relayed the coordinates to an Air Force combat controller, not Webb.

“The guy has done real-world missions, but he has never shot and killed anyone,” Osman said. “He wrote a book that’s partially true, but he embellished it to sell it to a publisher. He tells so many lies, it’s hard to keep up with them.”

Webb did not answer specific questions about the embellishment accusation, other than to say the detail about the fighters being 50 yards away was an error by the Men’s Journal writer. The author of the story said he couldn’t confirm that and wouldn’t have an opportunity to check his notes until Monday.

Webb also did not provide contact information for anyone who could corroborate his version of the mission.

He did provide a copy of a June 2002 award citation and a performance evaluation from that period, both of which commended him for his actions in Afghanistan. According to the award citation: “Petty Officer Webb displayed extraordinary weapons proficiency and battlefield valor during nine days of sustained combat operations and exploitation of the Zhawar Kili cave and tunnel complex in eastern Afghanistan. Despite several armed confrontations, his operation and tactical skill ensured the enemy was defeated.”

Webb hasn’t been shy about using his media network to challenge others who’ve been accused of stretching the truth or using their military service for their own gain. In November, not long after Rob O’Neill became the second SEAL to offer a firsthand account of the bin Laden raid, Webb went on a radio program and said: “It’s being seen in the community as two guys who are embellishing to take the spotlight and personally profit on this.”

A few months later, as NBC anchor Brian Williams came under fire for exaggerating his experience in combat situations, Webb wrote this on the site he founded:

“It’s one thing to embellish for the sake of story telling, but to flat-out lie about serious events in what appears to be a narcissist-fueled campaign of self-indulgence, when you are a trusted news correspondent is unacceptable, and a career ending activity.”

Mike Hixenbaugh, @mike_hixenbaugh

<!–

–>

Posted to: Military


Article source: http://hamptonroads.com/2015/05/former-navy-seal-brandon-webb-under-fire-critics

COLORADO Overcharged homeowners get restitution

Ouray office:
281 Fifth Avenue, Ouray
970-325-2839

Ridgway office:
133 N. Lena St., Ridgway
970-626-5100

Mailing address:
PO Box 529
Ridgway CO 81432

 

 

Article source: http://www.ouraynews.com/articles/2015/05/30/colorado-overcharged-homeowners-get-restitution

Soaring rents drain household budgets for millions of working people



Posted May 30, 2015 at 8:41 PM


Article source: http://www.pjstar.com/article/20150530/NEWS/150539950

Lawmakers want to pare down HOAs’ power in foreclosure

CARSON CITY, Nev. (AP) — Lawmakers who say a recent Nevada Supreme Court decision has given homeowners associations too much power to foreclose over unpaid dues are pushing for a last-minute legislative fix, saying the ruling could drag down the recovering market and threaten Nevadans’ ability to get federally backed loans.

Changes could come through Republican Assemblyman David Gardner’s bill, AB 359, which deals with so-called “super-priority liens” placed on homes by HOAs. The bill has not yet been scheduled for a hearing, but Gardner said lawmakers are actively working on the measure and he expects it will be up for discussion sometime in the final four days of the legislative session.

Real estate agents and mortgage lenders are sounding the alarm about the Supreme Court’s September decision, which said that unpaid HOA dues should not only be the first thing paid when a foreclosed home is sold, but that that they can also extinguish a mortgage itself if a bank doesn’t address the lien for HOA dues.

That goes further than the how many interpreted the law in the past — as requiring up to nine months of HOA dues and collection costs paid off first when a foreclosed home is sold.

HOA industry representatives support the stronger interpretation. They say the high stakes force banks to take HOAs seriously and pay dues, ensuring responsible HOA members aren’t picking up the slack from their delinquent neighbors and the infrastructure, landscaping and public areas of an HOA are maintained.

“If the bankers and realtors succeed in eliminating the super priority lien, the entire burden of unpaid assessments will shift to those owners that do pay while banks continue to strategically delay foreclosure,” wrote Norm Rosensteel and Donna Zanetti of the Community Association Institute Legislative Action Committee in an editorial published earlier this week in the Reno Gazette-Journal. “Once again, the homeowners that have worked hard to play by the rules will end up paying the price. It is time to protect homeowners, not predatory lenders.”

But real estate agents and banks say the balance of power is too far in the favor of HOAs, and such a situation is a threat to the market. They back AB 359, which would prevent mortgages and other liens from being wiped out in an HOA foreclosure.

Realtors say the Supreme Court ruling has led to expensive homes being foreclosed upon and auctioned for a fraction of their worth because the owners haven’t caught up on relatively small HOA dues of often less than $100 a month. When the HOA forecloses and an HOA’s super-priority lien cancels a bank’s legal claims to the mortgage, the ownership trail becomes murky, the cost of title insurance goes up and the home’s resale value drops.

The Federal Housing Finance Agency, which regulates federal lending agencies, including Fannie Mae and Freddie Mac, has already raised concerns about the situation in Nevada. An official from the agency testified on the matter before the Legislature in April, and the agency later issued a statement saying it would aggressively challenge HOAs whose foreclosures wiped out federally backed mortgages.

“Their signal is strong. Their signal is pretty to-the-point,” said Keith Lynam, president of the Greater Las Vegas Association of Realtors. “We’re such a tumultuous market. It’s irresponsible of us not to take it seriously.”

Lawmakers have sought to ease the high stakes with SB 306, a bill that aims to give banks and borrowers more warning before their homes go to auction and a mortgage liens are extinguished. That bill is awaiting Gov. Brian Sandoval’s signature.

Republican Sen. Becky Harris is backing a bill, AB 240, that creates an intermediate-level solution — one that would require “impound accounts” where lenders store up money that could be withdrawn to pay HOA dues in case of default.

Real estate industry representatives say something needs to be done to avoid a setback in the market.

“We don’t need another shot to the stomach,” Lynam said. “The Legislature has got to act.”

Article source: http://www.beaumontenterprise.com/news/article/Lawmakers-want-to-pare-down-HOAs-power-in-6295167.php

Connecticut’s foreclosure mediation program extended



MIDDLETOWN State Rep. Matthew Lesser has announced the House of Representative voted in favor of HB 6752, which extends Connecticut’s successful foreclosure mediation program for an additional three years, with a vote of 140-2.

The legislation had an original sunset date of June 30, 2016, which will now be extended to June 30, 2019.

“Following the 2008 mortgage crisis, the Connecticut state legislature voted to enact the foreclosure mediation program to help families secure their financial footing and remain in their homes.

“It was probably the most important bill we passed in response to the crisis,” Lesser said. “Although the number of homes in foreclosure has thankfully decreased since 2008, there are many Connecticut families who still depend on these services,” he said in a press release.

The initiative is carried out by the state’s Judicial Branch and helps homeowners and lenders achieve a mutually agreeable resolution to a mortgage foreclosure action through the mediation process.

Article source: http://www.middletownpress.com/government-and-politics/20150529/connecticuts-foreclosure-mediation-program-extended

Foreclosures down in Monroe County. Keys rate is lower than the state average

News

Not everyone on board for new Big Pine Key park

Article source: http://www.keysnet.com/2015/05/29/502944/foreclosures-down-in-monroe-county.html

Nevada lawmakers want to cut HOAs’ power in foreclosure

Lawmakers who say a recent Nevada Supreme Court decision has given homeowners associations too much power to foreclose over unpaid dues are pushing for a last-minute legislative fix, saying the ruling could drag down the recovering market and threaten Nevadans’ ability to get federally backed loans.

Changes could come through Republican Assemblyman David Gardner’s bill, AB 359, which deals with so-called “super-priority liens” placed on homes by HOAs. The bill has not yet been scheduled for a hearing, but Gardner said lawmakers are actively working on the measure and he expects it will be up for discussion sometime in the final four days of the legislative session.

Real estate agents and mortgage lenders are sounding the alarm about the Supreme Court’s September decision, which said that unpaid HOA dues should not only be the first thing paid when a foreclosed home is sold, but that they can also extinguish a mortgage itself if a bank doesn’t address the lien for HOA dues.

That goes further than the how many interpreted the law in the past — as requiring up to nine months of HOA dues and collection costs paid off first when a foreclosed home is sold.

HOA industry representatives support the stronger interpretation. They say the high stakes force banks to take HOAs seriously and pay dues, ensuring responsible HOA members aren’t picking up the slack from their delinquent neighbors and the infrastructure, landscaping and public areas of an HOA are maintained.

“If the bankers and realtors succeed in eliminating the super priority lien, the entire burden of unpaid assessments will shift to those owners that do pay while banks continue to strategically delay foreclosure,” wrote Norm Rosensteel and Donna Zanetti of the Community Association Institute Legislative Action Committee in an editorial published earlier this week in the Reno Gazette-Journal. “Once again, the homeowners that have worked hard to play by the rules will end up paying the price. It is time to protect homeowners, not predatory lenders.”

But real estate agents and banks say the balance of power is too far in the favor of HOAs, and such a situation is a threat to the market. They back AB 359, which would prevent mortgages and other liens from being wiped out in an HOA foreclosure.

Realtors say the Supreme Court ruling has led to expensive homes being foreclosed upon and auctioned for a fraction of their worth because the owners haven’t caught up on relatively small HOA dues of often less than $100 a month. When the HOA forecloses and an HOA’s super-priority lien cancels a bank’s legal claims to the mortgage, the ownership trail becomes murky, the cost of title insurance goes up and the home’s resale value drops.

The Federal Housing Finance Agency, which regulates federal lending agencies, including Fannie Mae and Freddie Mac, has already raised concerns about the situation in Nevada. An official from the agency testified on the matter before the Legislature in April, and the agency later issued a statement saying it would aggressively challenge HOAs whose foreclosures wiped out federally backed mortgages.

“Their signal is strong. Their signal is pretty to-the-point,” said Keith Lynam, president of the Greater Las Vegas Association of Realtors. “We’re such a tumultuous market. It’s irresponsible of us not to take it seriously.”

Lawmakers have sought to ease the high stakes with SB 306, a bill that aims to give banks and borrowers more warning before their homes go to auction and a mortgage liens are extinguished. That bill is awaiting Gov. Brian Sandoval’s signature.

Republican Sen. Becky Harris is backing a bill, AB 240, that creates an intermediate-level solution — one that would require “impound accounts” where lenders store up money that could be withdrawn to pay HOA dues in case of default.

Real estate industry representatives say something needs to be done to avoid a setback in the market.

“We don’t need another shot to the stomach,” Lynam said. “The Legislature has got to act.”

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Article source: http://www.rgj.com/story/news/politics/2015/05/29/nevada-lawmakers-want-cut-hoas-power-foreclosure/28176433/