Not only has the housing meltdown affected state and local governments, servicers and investors, but homeowner associations too. These associations rely upon property taxes to pay for such services as utilities, trash pickup, snow removal, landscaping, and road and building maintenance, but vacancies have mitigated the number of improvements made in these communities.
There are more than 60 million Americans living in nearly 315,000 homeowners associations, condominium communities and residential cooperatives, but they rarely collect assessments on vacant homes. Without these collections, there is greater strain on the ability of an owner and condominium association to pay their bills.
One company that uses a technology platform to try to prevent HOA claims on their properties is Code Violation Services. The Windsor, Colo.-based provider of risk and loss severity management services created HOA Plus to help investors, lenders, servicers, asset management, title and closing companies locate HOAs to identify and resolve property demands in order to avoid fines, save money and eliminate obstacles for property sales.
“In most of these cases, simply finding out if a property is affected by an HOA—or even multiple HOAs—is half the battle,” said Rudy Krupka, CEO of Code Violation Services. “The next challenge is obtaining the actual HOA contact and demand information, which is like looking for a needle in a haystack. Our new HOA platform is a one-stop, hassle-free resource that provides these answers quickly and efficiently.”
In 16 states and Washington D.C., HOAs hold “super lien” status, meaning that liens placed against a property by an HOA take precedent over all other liens. If an HOA records their liens, title or escrow companies can obtain contact information through public record, but in most cases, HOA demands and violations are not recorded and transfer to the property making them difficult to sell.
HOA Plus helps its clients know if their property is affected by an HOA by searching for a specific address. Once the platform determines if the property is an HOA, it verifies the contact information, identifies specific demands, and enables the transfer of W-9 documents and invoices for its clients.
Another platform that helps facilitate communication between HOAs and lenders and mortgage servicers is Sperlonga Data & Analytics. Sperlonga, a subsidiary of the national asset firm Matt Martin Real Estate Management, is a database that connects associations and their delinquent HOA account claims with the right point of contact at the correct loan servicer.
The solution assists stakeholders in minimizing losses associated with transaction delays and lost revenues caused by HOA claims.
“There are millions of properties out there that have HOAs attached to them, and many of the associations and their management companies are unable to connect efficiently with the corresponding loan servicer to get their claims paid,” said Brent Stokes, senior vice president of Arlington, Va.-based Sperlonga Data & Analytics. “In some states, first-lien positions are threatened and it becomes far more difficult for properties to be sold until HOA claims are satisfied. We work with both the servicers and the HOA community to bridge the communication gap and get these problems solved.”
