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Real Estate & Property Law

: California Condo & HOA Law

The Effect of the Mortgage Crisis on California HOAs

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I received this email from my local Assemblymember (Mark DeSaulnier) via email, today.

"Homeownership is a source of tremendous pride and an important milestone on the road to achieving the American Dream. Unfortunately, many Californians are facing the possibility of home foreclosure due to unforeseen circumstances and events. During this crisis, my office is committed to providing you with the most up-to-date information and resources.

The Assembly Democrats are working on legislation to address the current mortgage crisis. For more information, please visit http://adc.asm.ca.gov/issues/MortgageCrisis. The information and organizations listed on the website may help you, your family and friends through these difficult times.

If you have any questions, please feel free to contact my district office at (925) 372-7990.

Sincerely,

Assemblymember Mark DeSaulnier"

This was my response to him:

"Dear Assemblymember DeSaulnier: I work in the HOA industry and the mortgage crisis is creating a homeowners association crisis as well. The delinquency rate in HOAs is increasing drastically, which makes it very hard for an HOA to operate without collecting extra money from those that are able to scrape by to make up the deficits.

What is being done to protect homeowner associations? You know that they support the infrastructure in California by bearing much of the burden for streets, sidewalks, parks, drainage systems and recreational facilities passed on to them by the municipalities.

Beth Grimm,
HOA Attorney and Resource Partner
www.californiacondoguru.com"

It's very scary folks. The subprime lending fiascos trickle down to the entire populace, including those signing on for loans that are able otherwise to bear the brunt of their own debt. If the burden created by overencumbering property with debt remains on the debtors and lenders and others that are trying to find compromises and workouts on the difficult loans, that is one thing. But we all know that as Californians, we are going to have to pay. In HOAs, it is very likely that all owners, assessment paying or those ducking the debt, are going to be hurt by the times.

So a fair question it is certainly fair to ask: What is being done for the HOAs that are suffering because of purchasers who hold no equity and can't afford to pay their loans?

Full post as published by California Condo & HOA Law on December 01, 2007 (boomark / email).