Get 2 months of free community web site hosting from Community123.com!
Sunday, June 16, 2019
Get 2 months of free community web site hosting from Community123.com!
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: Reporting to credit bureau - has it worked for your HOA?
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
TomE8
(North Carolina)

Posts:10


04/05/2019 2:53 AM  
Our HOA is considering signing up for one of the companies that report to the credit bureau and would love to hear how well this has worked for other HOAs?

Also, do you report on-time owners to provide a positive incentive as well as those who are behind?

The reason we are considering this is that we consistently have a lot of very delinquent HOA members who do not respond to letters from the HOA or even being placed for collection with an attorney. Most start to pay after we get to the foreclosure stage but we were thinking some other measure early on - like reporting to the credit bureau - might be more effective.

Also, we consistently have a lot of members who are several months behind. (we highly encourage automatic payment by draft)

Thanks much in advance for sharing your HOA's experience.
TimB4
(Virginia)

Posts:16355


04/05/2019 3:31 AM  
Tom,

For those members who don't respond, a legal action shows up on a credit report.
Hence, reporting assessment payments to a credit bureau in those instances would be duplicating the efforts.

Additionally, if they wait for the foreclosure proceedings, what makes you think that they are actually worried about their credit score?
MelissaP1
(Alabama)

Posts:8180


04/05/2019 4:11 AM  
Not a good idea. Lien or foreclosure better options. The HOA has no rights to have the person's Social Security #. So that has to be a different process to report to credit than using social security #. Even worse idea is to sue the person. It has no teeth on it.

So make a policy like 6 months you lien, 1 year CONSIDER foreclosure. (Whatever works for your HOA). Having a policy in place so people know when they are subject to lien or foreclosure makes it much easier to enforce actions.

Former HOA President
MelissaP1
(Alabama)

Posts:8180


04/05/2019 4:54 AM  
Additionally.... Hiring one of those companies is more costly for your HOA in the end. Some debts they may not be able to collect. Make sure the kind of debt collection is legally allowed to be collected by other agencies/companies. You may be surprised to find that some type of debts are not quite collectable.

Plus your paying a company to collect. They make it so your HOA signs over that debt to them. Basically offering to "Buy out" the lien/collection in order for them to collect. This is also a bad idea. The HOA isn't going to collect anymore money after that or have the right to pursue this debt. It's a slick business need to really go beyond the surface.

Former HOA President
TimB4
(Virginia)

Posts:16355


04/05/2019 6:12 AM  
Posted By MelissaP1 on 04/05/2019 4:11 AM

Even worse idea is to sue the person. It has no teeth on it.




Legal judgements have teeth.
Therefore, not having teeth must be an issue in some States, but not all.

Additionally, in some States, you need to go to court to foreclose.


TomE8
(North Carolina)

Posts:10


04/05/2019 6:58 AM  
Thanks much for the replies folks. Just to clarify - am not asking about hiring a collection agency. Just about hiring a company that specifically works with HOAs to automatically report if someone is 30/60/90 days or late - or alternatively to also report **everyone** including people who are 0 days late to help build credit ratings. Have found several companies that do this via software installed with HOA's management company. They claim that HOAs that use their services dramatically improve collection rates and their service more than pays for itself. Was just hoping to get REAL input and not just trust the sales people.
GeorgeS21
(Florida)

Posts:1227


04/05/2019 7:33 AM  
May need a cost analysis.

If your HOA always gets the dues, either on time, late, or via lien at closing, then it may not make sense to pay an entity to enter the owed amounts.

Now, if you have found that legal expenses of liening and follow up on closings is expensive, this might be an interesting way to offset.

This does beg the question: What would HOA debts be different than any other kind of debt?

Then, back to the what is it worth?

Or, what happens when the HOA screws up and misreports something and it affects someone's credit rating, and that someone takes the HOA to court? Or, simply shows the HOA screwing up ...?
TimM11


Posts:258


04/05/2019 9:35 AM  
I agree with the other Tim here -- if they're willing to let it get right up to the foreclosure stage, I don't see how the credit reporting would be any kind of deterrent. I suspect that you wouldn't see much difference from using this service.
TomE8
(North Carolina)

Posts:10


04/05/2019 11:55 AM  
We also have a lot of people who are 2,3,4,5,6,7 months late. The theory is that if you nip it in the bud and don't let people get very far behind, many will never get so delinquent.
BrettH3
(South Carolina)

Posts:12


04/05/2019 10:32 PM  
Yes, it has worked well for our community. We file liens, report to the credit agency, and most people pay as soon as they realize their credit report will be adversely impacted.
BrettH3
(South Carolina)

Posts:12


04/05/2019 10:32 PM  
Yes, it has worked well for our community. We file liens, report to the credit agency, and most people pay as soon as they realize their credit report will be adversely impacted.
TomE8
(North Carolina)

Posts:10


04/06/2019 4:09 AM  
BrettH3 thanks much! Could I ask a couple more questions via direct email including the name of the company you use? My email address is [email protected] - or PM me if there is a way to do that from this forum (I could not figure out a way).
MelissaP1
(Alabama)

Posts:8180


04/06/2019 5:14 AM  
I really don't believe reporting to the credit bureau has much or even the desired effect. If you actually do your research and not fed a sales pitch from a company, you may find that out. Considering the HOA isn't allowed access to one's social security number, it makes it much different route to follow filing. Plus how many points would it actually damage on one's report? Enough they can't buy a car or get a second mortgage? It may not be a lot of points. Plus what if they decide to file bankruptcy? Pretty much can wipe what is owed the HOA legally off the map...


Just saying you do NOT need a special company to collect the money. You may need a Management company to help with finances. However, even with filing a lien you just may need a lawyer or legal service. Do your research a bit more than jumping into the "easiest" surface solution. Which I believe this to be in the long run.

Former HOA President
TimB4
(Virginia)

Posts:16355


04/06/2019 6:38 AM  
Let me add one thing that may be helpful that an owner of several businesses told me.

They added one line to their invoices:

"Failure to may on time may impact your credit rating"


I was told that the business owner had zero inclination to file anything with the credit bureaus (as this was costly and an additional hassle). However, that one line had many who paid late start to pay on time.

The key word to use is may.

You might simply want to try this and see what, if anything, changes.
GeorgeS21
(Florida)

Posts:1227


04/06/2019 6:45 AM  
Sounds like the simple statement on the billing notice might be helpful.

Brett - can you give us a rough order cost estimate per filing each time with the credit agency?
JohnC46
(South Carolina)

Posts:8334


04/06/2019 11:05 AM  
Our HOA Attorney's practice has a department whose speciality is past dues collection. After past due for 3 months (and having gotten one polite letter from the BOD), we turn it over to them. The offender gets a letter from the attorney threatening a lien and "Failure to may on time may impact your credit rating" if not paid in 30 days. The attorney charges us $100.00 to write this letter.

If no response within 30 days, the attorney takes over. He liens, adds $400.00 for expenses, and threatens Foreclosure. We have never gone to Foreclosure.

So a 4 step procedure:
1. 60 day overdue: Polite letter/invoice from the HOA.
2. 90 days overdue: Letter from Attorney threatening lien and credit report. $100 cost to the HOA.
3. 120 days overdue: Lien filed, legal costs added, and foreclosure threatened. No cost to the HOA
4. Foreclosure commences but we have never gone to this step.

My experience says that until a letter comes from the attorney, people ignore anything else especially letters from the HOA or MC.


GeorgeS21
(Florida)

Posts:1227


04/06/2019 12:38 PM  
John,

Good points.

An interesting no-cost approach might indeed include a warning wrt credit agency reporting ... perhaps it would help encourage some percentage at no cost to the HOA - and, be no different than any other corporation.
MarkM19
(Texas)

Posts:330


04/07/2019 3:13 PM  
Tom E,
My first suggestion is never believe what a Sales person tells you. I would ask for references of other HOAs and call every one of them. What is this going to cost? How much total debt is on your books currently?

We have so many different HOA representatives on this site. So far only Brett has said he uses a similar service. I think the rest of us would love to hear about it success, but doubt many would go that far.

Tim B4,
I love your idea and will be asking our PM to add it to the next billing. There are still people in this world that care about their Credit Score and the fear of it being effected for what in most cases is a small HOA fee may do the job at no extra cost to the Association.
RoyalP
(South Carolina)

Posts:770


04/07/2019 7:36 PM  


Murrells Inlet, SC 29576

Collection Policy & Procedure

1. Annual assessments are due on January 1st. Our documents state they are payable in 12 equal payments, due on the first of each month.

2. Failure to make the monthly payment within 30 days will result in a late fee of $15 being added to the account for each 30 days of delinquency as per our AMMENDED DECLARATION OF RESTRICTIONS AND COVENANTS FOR xxxxxx xxxxxx, Article V, Section 6: Paragraph (b).

3. A ‘courtesy contact’ will be attempted, but not guaranteed, before imposing a late fee.

4. Failure to remit payment for 90 days will result in the lien being recorded against the property with the Register of Deeds Office, located in Conway, SC.

5. Failure to remit payment for 180 days will result in the account being “sent to collections” through Spring Forest’s attorney at YOUR eventual expense.

6. Failure to collect by 360 days will result in Foreclosure on the Lien.

PLEASE DO NOT LET YOUR ACCOUNT BECOME DELINQUENT
By unanimous affirmation 4/12/2017,
Board of Directors, , Inc.
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > Reporting to credit bureau - has it worked for your HOA?



Get 2 months of free community web site hosting from Community123.com!



News Articles Provided by: Community Associations Network
News, articles and blogs about condos/HOA's

Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
HindmanSanchez Legal Notice:  (For messages posted by HindmanSanchez) This message has been prepared by HindmanSanchez for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Members of HOATalk.com should not act on this information without seeking professional counsel. Please do not send us confidential information unless you speak with one of our attorneys and get authorization to send that information to us. If you wish to initiate possible representation, please contact an attorney in our firm. Our attorneys are licensed to practice law in the state of Colorado only.

Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement