Foreclosures By HOA’s Rising
This is an interesting bit of news at Naked Capitalism noting that many homeowners’ associations around the country are still experiencing strained budgets. Even though the foreclosure tide has diminished, the budgets of the HOAs in many states have not seen significant improvement. Due to defaults and slow payments, reserves at many HOAs around the country have fallen.
“Foreclosures by bank servicers has produced an adverse feedback loop: homes in foreclosure sit vacant, often for lengthy periods, and they don’t pay fees to the HOA. That produces shortfalls in the HOA’s revenues versus their needs. Thus when a homeowner now goes into arrears, the HOA has less ability to cut them slack and work out a payment or catch-up plan.”
Here in Texas with the housing market still booming, the problem is still more about a lack of transparency. HOA reform continues to be an uphill battle here in Texas. Most area residents realize that HOAs are just part of real estate picture here. For some who many be relocating to Katy TX or West Houston, HOA’s may be a foreign concept, and they quickly realize that homeowners associations can be a mixed bag. As this Texas Monthly article explains, there’s still a long way to go in terms of HOA transparency, and that goes double for homeowners in Texas. There is still a need for more transparency and accountability by HOA’s and their management.
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