Associations can face a range of problems—from financial strife related to the current economic climate and housing crisis to conflict between homeowners and association leaders. Issues can involve mandatory homeowner fees, budgetary shortfalls, home foreclosures, architectural guidelines and rules enforcement related to yard signs, holiday decorations, flag poles, pets and parking.

Fortunately, there is free help and information—for homeowners, association leaders and community managers.

The nonprofit Community Associations Institute (CAI) offers free, downloadable information that can help homeowners better understand how associations should function and how to improve communities that are failing to meet resident expectations. Included are:

• An Introduction to Community Association Living—an online presentation that explains the nature, obligations and benefits of living in a common-interest community.
• Rights and Responsibilities for Better Communities—42 principles and practices to help associations promote harmony and reduce the potential for conflict.
• Community Association Governance Guidelines—12 principles that can help association boards identify and meet basic benchmarks of responsible governance.
• Model Code of Ethics for Community Association Board Members

By knowing your rights and the rules and regulations of normal homeowners associations, you can know what to expect and better your living situation.

For more information, visit www.caionline.org/help.

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Indiana HOAs See Mortgage Foreclosures Picking Back Up

Our office has seen a noticeable increase in mortgage foreclosures that are now proceeding forward. Indiana has historically had one of the highest mortgage foreclosure rates in the country. When the economy and real estate market declined about three years ago, mortgage companies began to acquire more and more homes as a result of foreclosure suits. Mortgage companies took title to many homes that were “upside down” or “under water”, meaning that the homes had no equity. That, coupled with the difficulty of selling any homes within the last couple of years, led to a spiraling-down effect. Mortgage companies were stuck with more and more properties that they simply could not sell, so their inventory of homes started to stock pile.

A couple of years ago, our office started noticing that many mortgage foreclosure suits were in a holding pattern. Before the real estate bubble burst, we would regularly advise our HOA clients that once a mortgage foreclosure suit was filed, it would take somewhere between 6 to 9 months for the suit to end up at a sheriff’s sale. Normally, the mortgage company was the only bidder and took ownership of the home. However, beginning a couple years ago, we noticed that the mortgage companies simply were not moving forward with foreclosure suits that they had filed. We then saw the “robo signing” controversy, complete with Congressional hearings. That further led to the slowdown of mortgage foreclosure suits.

In early 2011, we were receiving more and more notices that mortgage companies were dismissing lawsuits that had been pending for months. Their attorneys were telling the judges that they came to some sort of an agreement with the homeowner. Until recently, this was an extremely rare occurrence.

Over the past three or four months, we have noticed an increase in pleadings that the attorneys for the mortgage companies are filing with the courts. In particular, there is much more activity in foreclosure suits that have been pending for 1 or even 2 years so that the suits are finally getting “back on track”. Mortgage companies are asking judges to issue foreclosure decrees. If a foreclosure decree was previously issued, they are now setting a sheriff’s sale. From our perspective, this is what was typical up until 2-3 years ago.

I have absolutely no scientific data to back up any of the above statements! However, since our firm represents hundreds of homeowners associations and condominiums, I can certainly spot trends! In case you don’t know, a homeowners association is typically named as a party in a mortgage foreclosure suit because of the association’s lien rights against the homeowner’s property. In Indiana, even though a first mortgage has priority over any lien that a homeowners association may have for delinquent assessments, the association is still typically named as a party in the lawsuit. Thus, we have filed our appearance in thousands of cases over the years where a mortgage company is foreclosing on a homeowner. Whenever we file our appearance with the court, we are automatically notified of new developments in each case.

Unfortunately, there is little we can do to speed up the process, and it is typically difficult to give associations an accurate timeline for when the mortgage foreclosure will be completed. I note, however, that community associations, too, have the right of foreclosing a lien for unpaid assessments. In some cases, this may get the mortgage company to move forward, as they would be named in such an action. In numerous other cases, we have had clients get paid in full by the owner. Sometimes, our clients have completed the foreclosure process and recouped their money by renting the property after taking title at a sheriff’s sale.

For more information on mortgage foreclosures or association lien foreclosures, please contact us.

Sincerely,
P. Thomas Murray, Jr.
Eads Murray & Pugh, P.C.
Tom@IndianaHOALaw.com

This article is not intended to be construed as specific legal advice. It is provided for informational purposes only. For specific questions and circumstances, the association’s attorney should be consulted.

Eads Murray & Pugh P.C.
9515 E. 59th Street, Suite B
Indianapolis, Indiana 46216
Eads Murray & Pugh, P.C.
www.IndianaHOAlaw.com
317-536-2565

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Looking forward to being in the parade tomorrow. Above is a picture of the Century 21 Scheetz float. Mick Scheetz, our owner, will be the tractor driver. Then on to Lions Park. See you there.