Homeowner AssociationsForeclosures have hit tens of thousands of Americans, and one can imagine the financial stress and devastation that causes a family.  The foreclosure event and its aftershocks can implode a family, resulting in divorce and separating children from parents.  As if a foreclosure isn’t bad enough, there is another threat that looms after the foreclosure.  Homeowner Associations around the country are hiring attorneys and collection agencies to threaten the foreclosed homeowners after the foreclosures.  Here is a quote from an attorney’s letter to an elderly woman who lost her home to foreclosure and has suffered from cancer and poverty:

We are a collection firm for Sabre Springs Neighborhood Homeowners Association.  Your maintenance assessment debt has been referred to us for collection.  We understand your property was foreclosed on [date], however, you are personally responsible for all association assessments up to the date of the Trustee’s Deed Upon Sale is recorded [a good writer the attorney is not].  As such, the amount due includes our charge for reviewing the documents, processing the paperwork, skip tracing costs and sending you this letter.  . . .

If we do not receive payment or a written response disputing the validity of this obligation within thirty (30) days of the date of this letter, we will assume that you agree the amount set forth above is correct.  In addition, it will also be assumed that you do not want a payment plan and that you simply are not going to pay, therefore, we will begin legal action on the thirty-first day following this letter.

This is the kind of offensive letter that has endeared attorneys to so many people.  The attorney who wrote this letter is not a nice person, regardless of what he would say is just doing his job and enforcing a contractual or legal obligation.

The front page news here is not that attorneys can be such unpleasant human beings–it is that homeowners who get foreclosed upon may also be responsible for homeowners association assessments.  That’s not a surprise if you think about it.  What is a surprise is that the homeowners associations would make a decision to go after foreclosure victims who are themselves struggling to survive.  Ninety five percent of these debts are probably uncollectable anyway.  My suggestion for the board of directors of homeowner associations is that such debts should be written off, unless the homeowner is wealthy or is otherwise very capable of paying the debt without personally being forced into poverty.

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