Class Action Lawsuit Regarding Nonjudicial Foreclosures in Hawaii

A HOA foreclosure just stops the bleeding. It is NOT a profit making enterprise. Quite frankly I know of no one who would agree to keep footing the bill of another non-paying member without some kind of punishment or removal. If you sold someone a car and they did not pay you the monthly payments, would you not want the right to go collect the car? What's the difference with an HOA being allowed to remove a non-paying member?

I believe in the right for a HOA to have the power to lien or foreclose on a non-paying member. What other options would one propose to take the place? Lawsuit? Yeah, let the person walk away and never pay with those... It is to note that foreclosure is the LAST option a HOA would pursue and the circumstances are limit/special. They can't do it on active military members. Plus if the bank is already foreclosing, it is NOT worth the HOA's efforts. The bank gets paid first and foremost in a Foreclosure be it by the bank or the HOA... Unless in a super lien state which only puts the HOA on equal footing.

Sorry will get off my soap box... but tired of hearing about how "evil" a HOA is by having the right to foreclose. It's my right to collect what is mine just like the HOA should have too.

I agree with Melissa. It may be this "wrongful" stuff may concern issues like proper notification or failure to account for exactly what's owed. This is why our state law requires a number of things that have to happen before foreclosure, which should be the last step when everything else has failed. It's also why boards need to have a good understanding of their collection process and make sure that homeowners are educated on what that process is.

In our community, people can request their account statements at any time and ask for payment plans if they fall into financial hardship. If an account goes to our attorney, they can still make the request when they get the attorney's nastygram (last ditch effort before a lawsuit is filed). If things escalate to foreclosure, the homeowner gets a notice of the sheriff's sale, so if they want the house, they can show up and make a bid to pay off the debt.

I haven't read the lawsuit, but I have to wonder how much of this was done by those HOAs before things go to this point. Even more, I wonder how much effort the homeowners made to save their home before the foreclosure. This is a class action lawsuit, but I wonder how many of those people have a legitimate beef vs. the ones who were straight up deadbeats and are now upset because they lost their beachfront condo?

I find it so lacking of reality when I see such articles about HOA foreclosures... The reality is that a HOA foreclosure is such a losing deal. The bank gets ALL the money IF any is even owed! Even IF the HOA does it. I've known of no foreclosure that has ever returned a dime of money to either party. If anything, it leaves an open eye sore of property for a long time.

One day would love for someone to explain to me how a HOA foreclosure is a money making greed laced process that a power hungry HOA takes on for enjoyment... Show me one of those, and I will show you a HOA that's been trying to collect dues owed to it for over a year or more while the owner lives off the teet of ALL their fellow members....

The fact still is the HOA would have to file a lien first. Something I am sure you would address ASAP. You could not sell the property till it was lifted. So your now beholden to the HOA till they say enough. Keep in mind this whole time they are not receiving any funds from you. When they foreclose on that lien, it's then to fill in the hole of what is owed to them. So they are still not in a profit making situation. Just a stop the bleeding one.

Now once they foreclose the bank is first and most likely foremost in collecting any money owed. If none is owed, then the HOA is in line for the first bid of purchase. Which is about $1 over what is owed to them. Which basically they would be paying off their own debt you owed them to purchase the home. The good news is they would not have any house payments in your case. However, they still would incur expenses such as repairs, maintenance, HOA dues, insurance, utilities, and realtor fees if they decide to sell/rent. The HOA basically owns the home IF they purchase it at the foreclosure sale. I know of no house that isn't a money pit at some point.

I don't believe the HOA should ever purchase the home at a foreclosure sale. They should just want to get it's debt paid off. There still is the right of redemption time line to deal with in many states. Which means the owner can get the house back up to a year if they pay back what is owed and any improvements. So the HOA really can't touch the home at all till that time period is up. Which in some cases can mean keeping up house payments for a year on an abandoned house they legally can't even rent out.

Maybe yes, a house with no debt owed on it could be a possible profit on some level. However, I highly doubt an owner in such status would skip their HOA dues to the point of foreclosure. If they are doing that, then maybe the house is in probate and they are dead.

Well that is with most HOA's. It is NOT inherent in the documents that a HOA has the right to issue fines, lien, or foreclose. It does have to be written in. A HOA may have the right to fine but most lacks the DEFINITION of fining. That is why a HOA usually has to develop an outside Fining Schedule to fine. Otherwise the documents just say the "HOA may levy fines". What for? How much?? Limits?

It is the same for an HOA on liens/foreclosures. Not all HOA documents have this written into their documentation. So does that make it illegal to do so? That would move to the State laws. Which I would agree such a class lawsuit may be needed or legislation to make or take out the wording.

It is NOT when or if it suits the HOA. IF it's in the CC&R's it's IN the CC&R's. That's just fact. However, if you do not want it to be in your documentation, then by all means remove it. The process to do so is ALL in the documentation. Oh, and it takes the majority of ALL the members of the HOA to change them not just the board. However, I highly doubt a majority of owners would agree to write out a section where if someone doesn't pay the HOA they can't take legal actions to collect. Which liens or foreclosures are legal options one has in doing so. Unless you have another legal option the court has never heard of.

What do you mean; READ?

Next, you will wish for comprehension!

ps.



It matters NOT what you 'believe'. It matters ONLY what the Covenant states.

As to the issue of what YOU believe it says, see my above post.