Gates of Hellsboro

Well, it was just a matter of time.

For years, associations have propped up lobbying groups CAN, CALL and CAI, spending thousands in Association dues to “herd” the members. The new wording of the anti-association proposal ensures that first mortgagees will not bear the burden of any association cost during attempts to collect unpaid dues. The proposed amendment would read:

“….interest, administrative late fees, reasonable costs and attorney fees, and any other fee, cost or expense incurred in the collection process is limited to the lesser of:
a. Only the parcel’s unpaid common expense and regular periodic or special assessments that accrued or came due during the 12 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or
b. One percent of the original mortgage debt.”

Not only does it let the bank ride free, but such a legislation would deter buyers from acquiring distressed association properties or association properties at foreclosure auctions. Since potential buyers are not exempt, they will MOST likely allow the bank to acquire the home then buy from the REO department.

I love it!! CAN, CALL and CIA using the Czar’s own money to lobby against them.  And since Florida is one of the hardest state for collection of judgements, it gets even better!  Oh brave new world with such fools in it!!

I was one of the first people to register for online foreclosure auctions hosted by municipalities.  I have not paid much attention until recently.  It took only a few minutes, a few municipalities and already I am worried.  I am not worried that I may not get a “bargain”, instead, I am worried of a few dangerous trends that will only ensure that more Americans will not achieve the American Dream (an opinion on this to follow).

I like to examine historical data in order to make an educated guess as to where a property may fall at auction.  This is what I found 53% of the times:

Auction Type: Foreclosure

Final Judgment Amount: $140,720.78

Assessed Value: $51,138.00

Plaintiff Max Bid: $151,116.70

I scratch my head when I saw this for a few reasons:

1.  If the assessed value is $51,138.00, a “normal” person would bid below or up to the assess value so as not to start out with negative equity.

2.  The Plaintiff (Federal National Mortgage Association) placed a bid, even far more than the judgment.

It would seem to me that lenders (after getting their billions from our tax paying dollars), are not interested in giving up the inventory on the market.  By bidding so high, they are ensuring that the banks are now in the real estate business.

This particular case was even more interesting when I found that the property in question had Chinese drywall and has not yet been remediated.  Why would a lender knowing these minimum details not be willing to allow this house to pass for a cash sale?

The second disturbing trend involves realtors.   Yes, the same people who made millions selling homes to people who could not afford them.

A disturbing amount of houses are being gobbled up by Realtors at auctions and then relisted for profit.  I have been chasing two realtors for the last three months, and they buy properties, then relist them for as much as 500% of the price at auction.

This is as bad as the bank bidding ridiculous figures for the homes.  Home sales are not increasing in some of these areas (notably Jacksonville and Lee County), so why are realtors hording foreclosed homes then relisting at ridiculous prices?

There should be some limit placed on the quantity of foreclosed homes a person or business that is not the plaintiff is allowed to buy within a given period.  I hear someone screaming free market and capitalism, but isn’t that what just brought this country to its knees.  Not really free market, not really capitalism, just greed.

 

The new statistics by real estate company Zillow shows 47% of South Florida homes are underwater. Consider the national average is 29%, that means that South Florida could become an even bigger hotbed for foreclosure. Florida could be looking at the 8 in 10 ratio, the same as Las Vegas.

The clear and present danger are homeowners who are willing to walk away. This means more foreclosure and additional inventory to the real estate market. Even homes bought before the housing boom are in danger.

With South Florida swamped with community properties, this leaves homeowners picking up the slack as boards try to meet their obligations. For some HOAs there is a means to escape this additional hardship. HOAs that do not have common areas such as pools, clubhouses, gated entrances and where the property owner is responsible for all property maintenance, it may be in the interest of the homeowners to dissolve such HOAs.

Most HOAs has provisions for dissolution in their documents. In the absence of such provisions, their exists within the Statutes guidelines for dissolution. Perhaps such an option would help some HOAs. For sure, it would help homeowners for shelling out cash for non-paying and foreclosed homes. Remember, the bank is only responsible for 12 months of HOA dues of 1.5% of the mortgage, whichever is less.

If one is not in the position of declining income, reduced to negative savings and really living paycheck to paycheck, then it is difficult to see the immediate solutions for the current crisis.  The government does what governments ALWAYS do.  They prop up the private sector, hoping that the crumbs will fall to the ants, excuse me peasants, on the ground.  The problem with that reasoning is there are more ants than there are crumbs falling.

Congress  tries to solve this economic crisis, but the fact is, they cannot.  They are a part of the “BIG” business machinery that just keeps on churning regardless of what happens on Main Street.

The Occupy movement is good in one sense – it seems some Americans are finally waking up, but ultimately flawed for a number of reasons chief among them there is no unified message.  So, in my Occupy Cyberspace Movement, I would like to present a real message with real solutions, even if they are slightly flawed.

The bare-bone outline:

Theme Song: Left, Right the Government Boots by Might Gabby of St Lucia (I think it sums up our clear message – UNEMPLOYMENT HIGH and THE TREASURY LOW).

Immediate Need: Basic essentials

Immediate Solutions that will help:

1.  Remove the tax penalty on IRA and 401K early withdrawals.  This will give the newly non-working middle class some extra money without the usual government penalties which can total some 35% in taxes.

2.  Create unemployment help groups.  This is a little more difficult to explain, but I’ll give it a good shot.  An unemployment help group is not so people can destress about their employment status.  It is basically a group of unemployed individuals who can pool services for cash.  Example:  Say you have an unemployment group South Florida that consists of 20 members.  The skill set of these 20 members include web development, sales, accounting, a seamstress, a jewelry maker and a carpenter.  These skill sets on their own may not be able to find a job, but put these people together and with the right incentive they could create a simple startup business.  Anything from custom baby clothes, MADE IN AMERICA clothing and houseware, toys, jewelry etc.  And there you have it, a new company of gainfully employed individuals.  Now I am not saying that is the skill set to make money, but that could be the start of something other than feeling helpless and hopeless.  I started my first business years ago (while I was unemployed), selling homemade candles and soap.  It gave me something to do while I waited for a more evenly paying job, and it paid the bills.

3.  Waive the ridiculously high corporate registration fees.  This ties in to number two above.  As a small business owner who has to pay RENT, EMPLOYER TAXES, SALES TAXES, WAGES, OCCUPATIONAL LICENSE to CITY, COUNTY then ANNUAL REGISTRATION to the state, UNEMPLOYMENT TAXES for each employee it gets expensive.  With a waiver in fees, it would be easy to get some start-ups going, but sometimes the initial outlay to start a business seem daunting, especially when you are unemployed.

4.  Rather than a lengthy loan modification, create a PRINCIPAL ONLY payment program.  This a quick and easy solution.  Many states, including Florida, already have in their statute PRINCIPAL PAYMENT options on financial instruments.  Mortgages are FINANCIAL INSTRUMENTS.  Wall street and the collapse of the housing market proves just that.

If banks and the government REALLY wanted to work together and help the middle class, this solution would be favorable.  It involves simply a one page written agreement for PRINCIPAL ONLY PAYMENTS for say 18-24 months, the differed interest would be added to the end of mortgage.

Here’s how that would work.  Take April 2005 $200,000 loan at 6.25% with Taxes of $3000.00 and insurance of $1500.00.

Today with the conventional mortgage the monthly payments break down to :

Principal is ~ $286.06    Interest ~ $945.38    Taxes & Insurance ~ $461.67

If the mortgage fell under a special program of PRINCIPAL ONLY (especially for underwater properties where owners are more apt to walk away), the payments would exclude that $945.38 which would be then added to the end of the mortgage.  So rather than payments ending in March 2035, payments would end 18-24 months later.

This solution though amateur would help perhaps more than the 1,000,000 the new Obama initiative is designed to help.  This would be immediate aid for everyone.  The under employed could get by paying what amounts to RENT and the vacant housing inventory would slow.

5.  Remove home business restrictions (at least for 24-36 months), even in deed restricted communities.  It irks me to see these HOA Czars and Condo Czars going after unemployed people who are trying to make a living in these tough times.

I am on the ground and I am looking for real solutions that can help my community.  Wall Street is not going to do it, the DOW JONES average does not help my neighbors.  Hope is not just a yearning for something better, it is also a fuel that can transform into I THINK I CAN, then I KNOW THAT I CAN, and then HOLY S*IT I AM DOING IT!!!

 

Well, well, the Gates has mailed out the new 2012 Ballot and Budget, and I cannot help but notice a few items.

1.  The top two contenders for complaining that “we are volunteers” are once again on the ballot.  NEWS FLASH – If you hate people telling you that you are ignorant with regard to the task of being on an HOA board, don’t keep submitting your name for a position.

2.  It seems that there will be a surplus of $1K plus from the 2011 budget.  This is actually ironic as the 2011 budget was only voted for by 41 homeowners from a total of 239 housing units.  In other words, the unapproved 2011 budget has a surplus —- go figure.

The 2011 budget was a joke.  In harsh economic times, hear are the wasteful items on the budget:

i.  WEBSITE $720.00 – excuse me, the official Gates website is a free Google Page that has not been updated since 2009.  Do I Smell refund?????  I mean I got these websites because I paid for them in the assessments of 2005, 2006, 2007 only to find out that the HOA lost the .com as early as 2006.

ii.  TELEPHONE $750.00 – I beg your pardon?  In this age of VOIP, it is almost a crime to pay $62.50 for telephone service.  I mean I run a business and my telephone service plus DSL is under $50.00 per month with unlimited long distance calling in the United States and Canada.  This just seems quite inflated.

iii.  NEWSLETTER $500.00 – now that is just plain stupid.  The Newsletter is entitled from Where I Sit and primarily written by the HOA president.  This year’s articles featured such delightful “news” as a board member complaining about dog s*it in her yard.  While I’m not a fan of those people who refuse to pick up after their pets, I’ve learned that if you live in a dog-friendly neighborhood, you will one day get up to s*it on your doorstep. There is no reason to dedicate a whole page and a half in a newsletter bitching about s*it!   Those who aspire to become writers write blogs — see how I can laugh at myself?  But on a serious note, if I have to read one more article promoting Scott’s weed and feed, I am going to ask where are the advertising dollars.

iv.  Postage and Stationary were estimated at $200.00 and $250.00 respectively.  According to the HOA new actual, the expenditure was $1,286 and $361.00 respectively.  Most of that is a waste of money.  $200 + $250.00 if forever envelopes (yes envelopes with forever stamps) were purchased directly from USPS this would be approximately 1000 pieces of such stationery.  To be on the safe bet, the HOA could have wisely bought 800 forever envelopes totaling $352.00 and probably spend another $300 – $400 on things such as return receipt, certified mail etc.  That would be more in line with prudent spending, but hey, it is a miniscule amount of their money YOU are footing the rest.  I fail to see where they spent $1,286.00 on postage as at least 4 of the liens the filed did not receive the statutory required notices with regard to assessments.

v.  Legal Expense $15,850.00 (actual spent so far $20,090.00).  This should come with a money back guarantee.  I mean, we should collectively refuse to pay the idiot who does not know you cannot refuse assessment payments submitted by a homeowner to an HOA.  That’s two liens that will be thrown out.  That is two attorney’s fees and filing fees that homeowners are literally flushing down the drain.  HOAs are not football game, there is no ‘come-from-behind’ win. Once statutes exists and precedent has been set, you’re playing the fool.

It is refreshing however to see that the fees will be back to 2010 levels, the last year the budget was LEGALLY adopted.

Okay, so you your HOA has filed a lien against your property.  If you intend on saving your property, there are a few options:

1.  If you owe the money and have no reasonable (or legal reason not to pay it is always advised that you pay.

2.  If you intend to to keep your property and you dispute the validity of the HOA debt, there is a way to remove the lien from your property while you are sorting out the other issues.  Place the lien on a surety bond.  It is your legal right in the State of Florida.

Numerous website, including broward.org, the Broward County website has numerous details on how to do this.  Of course, they recommend, as in all things these days, consulting  an attorney.  To think one of my favorite books is “Every Man His Own Attorney“, by Thomas Wooler (1845).

A.  Claims of Lien on real property recorded in the Official Records in accordance with Chapter 713 of the Florida Statues may be transferred from such lien to other security by either:

1.  Posting cash deposit (cash or cashier’s check only). The deposit amount is determined by the amount of the lien, including:

a.  The unpaid balance of the lien plus.
b.  The interest rate at 6% per year for 3 years (18%) plus
c.  $1,000 or 25% of the unpaid balance in the Clalim of Lien, whichever is greater, for attorney/court costs that may be assessed in any proceeding to enforce the subject lien.

NOTE: A service fee will be deducted from the amount posted at the rate of 3% for the first $500 and 1.5% for the balance thereafter on cash deposits only.

2.  Posting a bond executed by a surety licensed to do business in Florida in an amount equal to:

a.  The unpaid balance in such Claim of Lien, plus
b.  Current  interest rate thereon at 6% a year for 3 years (18%) plus
c.  $1,000 or 25% of the unpaid balance in the Claim of Lien, whichever is greater, for attorney’s fees/court costs that may be assessed in any proceeding to enforce the subject lien.

Recording fees, preparation fees and verification of surety fees are due in addition to the above amounts.

Any questions please contact our office at 954-357-7270 or mail to:
Broward County Government Center
Records, Taxes and Treasury, Rm 114
Attention: Specialty Desk
115 South Andrews Avenue
Fort Lauderdale, FL  33301

So I went through the preamble of Part One to state one fact, if the HOA did not hold elections in accordance with the recorded documents, they may not file a lien for said payment.

Of course they will file a lien, if they have a bad attorney.  But courts have ruled against HOAs for failure to show assessments were levied in accordance with Covenants (Berg vs. Bridle Path Homeowners Association, Inc. (Fiduciary Duty) and McKenna v. Camino Real Village Association, Inc. (Reversal of Foreclosure)).  Needless to say these rules cost the HOA members money in paying for attorney’s fees for the winning party.

Those are not the only pitfall the association faces.  Take the case of sloppy or bad accounting.  If payments received are not properly or timely applied, the association is facing an uphill battle and will lose according to precedent established by Ocean Two Condominium Ass’n v. Kliger and Saar vs. Wellesley at Lake Clarke Shores Homeowners Ass’n.  In both rulings, the court noted that associations have to ACCEPT and APPLY any payments tendered.

I am pointing these cases out because in at least two instances of the current liens filed by the HOA, money was sent from the homeowner to The Gates.  The Gates has failed to apply the payments sent, and instead has filed a lien against the full amount of the assessment.  This means by establishment of law, the lien is defective and if contested, The Gates will lose.  This means more money for the attorney who should, by virtue of his profession, be aware of these established precedents.

The attorney has no reason to care.  The board consists of ignorant volunteers and YOUR POCKET is responsible for their mistakes.  Do you think they would be this glib with their money?

Do not take any of this as legal advise.  If you need legal help, consult a competent attorney.  I just think you should know why your assessments will increase.

 

The Gates has started its annual filing of liens for non-payment of assessments.  There are a few curious cases in the lot, but one more than any.  But to start with that story is to start in the middle.

The annual assessments within The Gates must be voted for by a majority the members.  The Gates consists of approximately 186 homes.  In order for a majority vote to be achieved, the board MUST have a total of 30% yeas from the voting members.  This means that for 2011, there needed to be at least 62 properties voting yes for the increase in assessment from $122.00 to $153.00.

To my knowledge (and this is supported by board president JS), only 54 legal ballots were tendered.  That is not even enough ballots to constitute a quorum.  The board, against its own documents, and against Florida Statute 720 went ahead and sent everyone an invoice for the ILLEGAL increase in assessments.  THAT is RIGHT, for all those that never bothered to read the docs, the ASSESSMENTS were not done by the book.

Now the HOA attorney may beg to differ, after all, he’s the one with the law degree, but read on, it gets better!!!

 

Ah-ha.  It seems the magic number has six zeroes behind it.  That is the number that is required before the United States government will by executive order help the masses.  Perhaps, this help is only as a result of main street, for a change, is impacting Wall Street.

For the past four decades, Americans have been begging for government intervention to stop the senseless mob-style racketeering known as Community Asssociations.  The government, have done VERY LITTLE to really assist the plight of the many.

Homes being lost to Hitler-Style boards run by adults still living out their childhood days of being bullied are common place.  When a homeowner can lose his home for $0.47 in unpaid assessment, it makes you wonder, does the government even care.  HOA boards, HOA lobbyist and CAM attorneys all try to convince those living under this oppression that they chose to.  Nothing could be fartherest from the truth.

Take the City of Deerfield Beach, Florida.  If one wishes to own a home in North-West Deerfield Beach, there is no choice.  There are HOAs from West of I-95 to where the city ends.  The same is true from Wiles Rd/Green Road through to Powerline Line Road.  There IS NO CHOICE.

The answer cannot always be then move somewhere else or put up with tyranny.  THAT, must never be the answer in a so-called democratic country.  The answer should be choice – VOLUNTARY ASSOCIATIONS.