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Subject: Notice to Association of Mortgage
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ScottF3
(Michigan)

Posts:9


08/29/2019 12:32 PM  
OK. I've got a tricky one here, and I'm looking for help on figuring out how to enforce it, and get the other co-owners to provide the information. Here's the wording from our bylaws:

"7.1 Notice to Association - Any Co-owner who mortgages his Unit will notify the Association of the name and address of the mortgagee, and the Association will maintain such information in a book entitled 'Mortgages of Units.' The Association may, at the written request of a mortgagee of any such Unit, report any unpaid assessments due from the Co-owner of such Unit. The Association may give to the holder of any mortgage covering any Unit in the project written notification of any default in the performance of the obligations of the Co-owner of such Unit."

This is a small 39 home development in Michigan that was given the HOA from the developer about five years ago. No book was handed down from the developer, and no prior board took it upon themselves to collect this information. It seems that it is there to help collect if there is any default from any co-owners. I've talked to my other board members, and they say to just ignore this bylaw. My question is two-fold.

Does anyone have any ideas on how to collect and maintain this information since mortgagees may change when the mortgage is sold? I know I could ask, but the push back would be great.

Anyone have any idea the implications if we don't follow this bylaw as a board? There is nothing in our bylaws about punishment for not following the bylaws, and the state statutes allow for HOA members to call for action from the board if they are not following the bylaws. Thanks for any help on this.
SheliaH
(Indiana)

Posts:2665


08/29/2019 1:31 PM  
Governing documents are always written to favor the developer at first, and while some of the information is useful, some of it becomes outdated or unnecessary once the homeowners take over. The problem is the developers rarely review the documents with the soon to be HOA board members as to what’s in them, the new board members aren’t educated on why this could be critical if a homeowner falls behind in paying assessments and of course NO ONE reads all those papers shoved in your face at closing (admit it, you didn’t either). Instead they sign and initial, and then move in.

What happens if the bylaws aren’t followed? That may depend on which one it is and what’s at stake. You said you might get pushback if the board asked for this information, but try asking for it anyway, citing the bylaw and explaining how it would be used. You don’t need to know the amount of the mortgage or what they pay every month, just the name and address of the bank. If there’s enough howling, the homeowners can always vote to amend that part of the bylaws – keep reading them to see how that’s done and then talk to your association attorney about the pros and cons before you proceed.

Do you know if the developer is still around? If so, you might want to start there, although the information has probably changed, with mortgages being bundled up and sold in one shot to this or that bank. That was part of the drama from the 2008 housing crisis – no one knew who actually owned the house.


There are some property managers on this website who might know the answer (RichardP13, I’m looking at you!) but in the meantime, the only thing I can think of is checking the addresses against the database of your county recorder’s office. The mortgage company or bank should be listed there (at least the name of the original) and then you can recheck it every year to see if something’s change. I’d also go ahead and ask the homeowners – you don’t need to know the amount of the mortgage or what they pay every month, but a name and address would be a start. There may also be information in the county tax assessor’s office.
JohnC46
(South Carolina)

Posts:8647


08/29/2019 2:10 PM  
Our Covenants call for our HOA to be named as Co-payee on ones home insurance and send proof of this to the HOA. The reason for this is two fold. An owner cannot collect for a burned down home and run with the money and to assure the home gets rebuild to look like the rest of our homes.

We have never kept track of this nor have most replied. We occasionally get an owner saying their insurance agent says this is illegal/improper. Our MC sends a letter highlighting what the Covenants say and they go away.

Were we to have a fire that destroyed a home we would have our lawyer jump on the issue immediately to protect us.


RichardP13


Posts:0


08/29/2019 3:11 PM  
Posted By JohnC46 on 08/29/2019 2:10 PM
Our Covenants call for our HOA to be named as Co-payee on ones home insurance and send proof of this to the HOA. The reason for this is two fold. An owner cannot collect for a burned down home and run with the money and to assure the home gets rebuild to look like the rest of our homes.

We have never kept track of this nor have most replied. We occasionally get an owner saying their insurance agent says this is illegal/improper. Our MC sends a letter highlighting what the Covenants say and they go away.

Were we to have a fire that destroyed a home we would have our lawyer jump on the issue immediately to protect us.





If the home is a single family detached unit and the owner pays the insurance, not the HOA, the insurance company could care less about the HOA. If Board members don't take the time to read their covenants, why should anyone expect the owner to?
RichardP13


Posts:0


08/29/2019 3:44 PM  
I would be curious as to the age of the CCRs for the complex the OP is referring to. Now days you have a company you pay your mortgage premium to called the "servicer" and the company or institution who actually holds the promissory note. All mortgages are tracked by a MIN, similar to a VIN for an automobile. You would need access to MERS, which was developed by Countrywide for the lending institution to track who is servicing the loan and who holds the note. Loans will generally change hands every two-three years. Normally it's the Note holder changing, sometimes it is the servicer.

Would you be held accountable if you didn't track the name and addresses, no. First, you have to know how to do it and have access to the system and second, who else does it?

I will access the system when I need to locate a lender for whom a owner has followed behind on their HOA dues.
LetA
(Nevada)

Posts:771


08/29/2019 6:47 PM  
What business is it of the association who does their business with what bank? BTW this information may be listed on the county recorders page. The only time you would need this information is if you were intending to foreclose. Some jurisdictions, even though HOA's in some instances are super priority must notify the bank first.
RichardP13


Posts:0


08/29/2019 8:15 PM  
Posted By LetA on 08/29/2019 6:47 PM
What business is it of the association who does their business with what bank? BTW this information may be listed on the county recorders page. The only time you would need this information is if you were intending to foreclose. Some jurisdictions, even though HOA's in some instances are super priority must notify the bank first.



Not true, there are times when certain provisions of the CCRs, if changed, either need approval of the mortgagee, or they need to be notified.
NpS
(Pennsylvania)

Posts:3655


08/30/2019 9:19 AM  
Richard is correct on this one.

You don't have access to MERS. A mortgagee isn't coming to you for information that is only accessible via MERS.

In it's heyday, MERS mortgages accounted to more than half the US mortgages issued. MERS was popular because it offered cheaper registration costs than normal registrations in county Registries of Deeds throughout the country. In my state, several counties sued MERS for violating public registration requirements (and undercutting county revenues). The counties won. A few years later, those cases were overturned by an appellate court. Hmm, wonder who made big bucks on that one. Anyway ...

Today, MERS is owned by the same holding company that owns the New York Stock Exchange. So like Richard said, no mortgagee is coming to you when the best and often only source is MERS.

As far as the specific language in your docs is concerned, I don't see any real obligation on the BOD. If the HOA had such records, providing them to the mortgagee appears to be optional. (The word "may" is used twice.) While there is an obligation on the owner to provide the information to you, that's on the owner, not the BOD. Your BOD has an obligation to maintain a book of all mortgage information provided by the owners. If your owners don't provide that info to the BOD, then I see nothing wrong with a book that's blank. There's nothing in your wording that says your book can't be blank.

So - from both a practical standpoint and a technical standpoint, you can probably ignore this issue.

Sikubali jukumu. Read all posts at your own risk.
RichardP13


Posts:0


08/30/2019 10:04 AM  
To be clear, MERS is the same as one's state DMV who keep track of mortgages by using a MIN.

For the OP, don't worry about keeping track of who has who's mortgage. no one can hold you to that.

What everyone should know is that anyone has access to MERS, you just need certain information. It can be useful when tracking a deadbeat homeowner who is seriously delinquent on dues. They may help and they may not, but they won't do anything unless you ask and it doesn't cost the association a dime.

Not all mortgages will be in the system. If the loan was not assigned a MIN, it won't be. If the home has been paid off or if the home never had a mortgage, it won't be in there either.
NpS
(Pennsylvania)

Posts:3655


08/30/2019 10:25 AM  
Posted By RichardP13 on 08/30/2019 10:04 AM
To be clear, MERS is the same as one's state DMV who keep track of mortgages by using a MIN.

For the OP, don't worry about keeping track of who has who's mortgage. no one can hold you to that.

What everyone should know is that anyone has access to MERS, you just need certain information. It can be useful when tracking a deadbeat homeowner who is seriously delinquent on dues. They may help and they may not, but they won't do anything unless you ask and it doesn't cost the association a dime.

Not all mortgages will be in the system. If the loan was not assigned a MIN, it won't be. If the home has been paid off or if the home never had a mortgage, it won't be in there either.



Differences: MERS is a private entity with no responsibility to the public. DMV is a government entity.

Thanks for info re access to MERS. Just checked it out. Identifies the holder but not the dollars. So not sure how that could be valuable to an HOA. Even when we reached out to a mortgage holder via our attorney, they weren't resonsive.

Sikubali jukumu. Read all posts at your own risk.
RichardP13


Posts:0


08/30/2019 10:55 AM  
WOW, you want everything on a silver platter served up to you.

As far as finding dollars amounts, those can be found via title reports, ooops you have to pay for those. They can also be found on credit reports, and again, you have to pay for them too. Don't you just love capitalism?

In a PUD or Condo Rider, under Remedy, it says May, not Shall. If not satisfactory, get the language changed.

Good Luck
NpS
(Pennsylvania)

Posts:3655


08/31/2019 7:04 AM  
Posted By RichardP13 on 08/30/2019 10:55 AM
WOW, you want everything on a silver platter served up to you.

As far as finding dollars amounts, those can be found via title reports, ooops you have to pay for those. They can also be found on credit reports, and again, you have to pay for them too. Don't you just love capitalism?

In a PUD or Condo Rider, under Remedy, it says May, not Shall. If not satisfactory, get the language changed.

Good Luck



Thanks for proving my point. If registration was with a government agency - the Registry of Deeds - the amount of the mortgage would be publicly recorded and available to anyone. It's only been that way for hundreds of years.

So when you said that MERS was accessible, what you meant is that it is accessible - not to the public - but to people who work within the industry and have paid access. Big WOW back to ya.

Closed world. Closed mind.



Sikubali jukumu. Read all posts at your own risk.
RichardP13


Posts:0


08/31/2019 8:59 AM  
Please tell the audience exactly why an HOA needs to know the amount of the mortgage?

Security Instruments, Deeds of Trust are recorded and they have a dollar amount of the mortgage recorded. It does not update when it goes up of down. Reports can be obtained from title company in many different forms and with various types of information related to the property. Credit reports will update the dollar amount and payment history of individual borrowers.

MERS registers mortgages and tracks them as they change hands. If I want to contact a lender to inquire about a owner not paying their HOA dues, this is where I start. I have many other tools available after that and I use them.

Sorry, MERS isn't what you had hoped it would be. Nothing in life is.
NpS
(Pennsylvania)

Posts:3655


09/02/2019 5:37 AM  
Hi Richard.

As I said earlier, I use sale prices and mortgage amounts as part of a spreadsheet analysis on the vulnerability of my HOA to another RE market drop. You challenged me on that. Then you challenged me on a 2011 report from CAI that I attached about the effect of the mortgage meltdown on HOAs. Then you said that you used MERS which you said was accessible to the public. I thought - great - if Richard has a better approach, I'm interested. So I looked at MERS, but didn't get past the opening screen because I don't have a MERS account. So you challenged me on being to cheap to pay for the service. That's an awful lot of challenges Richard without ever demonstrating that you've got something better.

I'm sure that you know how to dig deep into the status of an individual account. That's fine. You use your skills when you're trying to collect from an individual account.

But it has nothing to do with the analysis I do for my HOA. I don't look at one account. I look at vulnerabilities across the board, which takes every unit into consideration, but doesn't dig deep into the detail of any one account. It would be a waste of time considering my objective. If we had current collections issue - maybe what you do would be valuable - but we don't.

As far as MERS is concerned, I've had only one experience. We paid a lawyer hundreds of dollars to reach out to the owner of a MERS mortgage in order to get some action on a house that sat unoccupied for 6 years. Working on it. Working on it. But just as we thought we had a deal put together, the bank that held the mortgage sold the paper. We decided not to waste any more money chasing the new owner - who would probably do the same to us.

Closed world. Closed mind.

I'm done with this topic.

Sikubali jukumu. Read all posts at your own risk.
RichardP13


Posts:0


09/02/2019 10:10 AM  
For the record, there is no such thing as a MERS mortgage.

I gave the OP information on how to help satisfy their "requirement" to maintain a list of mortgage holders for their units. What they do with it is solely up to them.

My contract or agreement with a HOA doesn't say I will analyze their complex to foresee another mortgage meltdown. My agreement states I will do my very best to help collect on delinquent assessment. I use my skills and the tools I have or develop to do just that. Each owner of property residing within an HOA should have signed a PUD/Condo Rider. That document provides a remedy. IF, I don't do anything, I haven't honored my agreement.

Happy Labor Day or whatever holiday it is today.
NpS
(Pennsylvania)

Posts:3655


09/02/2019 5:30 PM  
Posted By RichardP13 on 09/02/2019 10:10 AM
For the record, there is no such thing as a MERS mortgage.


Back in the MERS heyday of mortgage generation, any yahoo from a Bank could become an officer of MERS for a few bucks - and then - as a MERS "officer" - could generate a mortgage in the name of MERS. The only name visible to the public was MERS. If you went to a county recorder of deeds, the name on the mortgage was MERS. If you say that's not a "MERS mortgage" - ok - you can call it whatever you want.

Posted By RichardP13 on 09/02/2019 10:10 AM
My contract or agreement with a HOA doesn't say I will analyze their complex to foresee another mortgage meltdown. My agreement states I will do my very best to help collect on delinquent assessment. I use my skills and the tools I have or develop to do just that. Each owner of property residing within an HOA should have signed a PUD/Condo Rider. That document provides a remedy. IF, I don't do anything, I haven't honored my agreement.


I figured that's what you were doing and I acknowledged it in my last post. You help collect. Got it. I'm sure you do a great job for your clients. Then again, just because you don't do predictive analysis as part of your job, that's not a reason to find fault with what I do.

Best.

Sikubali jukumu. Read all posts at your own risk.
RichardP13


Posts:0


09/02/2019 6:08 PM  
I have no idea what predictive analysis is to HOA's, but hell, if that keeps you busy, more power to you.

MERS tracks ownership and servicing rights that are originated in the United States. I have no idea where you came up with the other garbage. I really don't think you have a grasp on how the mortgage industry really works.
NpS
(Pennsylvania)

Posts:3655


09/02/2019 7:01 PM  
The following is an excerpt from the KY attorney general's office website page on MERS. KY was the first state to come up on my google search, but it wouldn't be difficult to find others.

As KY says: 1. MERS is the nominee (named party) on the mortgage; and 2. MERS used "Signing Officers" who are not actually officers of MERS, but are instead "designated officers" who really work

Best.for independent MERS members or some 3rd party agent of a MERS member.

If you compare this to what I wrote - surprise, surprise - it matches up.

In other words, calling what I wrote "garbage" doesn't make it untrue.


Statement Regarding Mortgage Electronic Registration Systems, Inc. (“MERS”)
There are certain instruments, including Mortgages, which are recorded in the public land records identifying Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee of the lender and the lender’s successors and assigns. MERS is the lienholder of record and holds legal title to the lien granted by the borrower in the Mortgage (“MERS Mortgage”) as the nominee (agent) of the lender and the lender’s successors and assigns who are members of the MERS® System.
As the mortgagee, MERS performs many of its actions, such as assignments of your mortgage, through individuals who are known as MERS Signing Officers and who may be designated as an officer of MERS on mortgage documents. Despite this designation, MERS Signing Officers are typically employees of the lenders, servicers, or other companies that are members of MERS, or employees of third-party agents of the members.

Sikubali jukumu. Read all posts at your own risk.
NpS
(Pennsylvania)

Posts:3655


09/02/2019 7:04 PM  
CORRECTED:

The following is an excerpt from the KY attorney general's office website page on MERS. KY was the first state to come up on my google search, but it wouldn't be difficult to find others.

As KY says: 1. MERS is the nominee (named party) on the mortgage; and 2. MERS used "Signing Officers" who are not actually officers of MERS, but are instead "designated officers" who really work for independent MERS members or some 3rd party agent of a MERS member.

If you compare this to what I wrote - surprise, surprise - it matches up.

In other words, calling what I wrote "garbage" doesn't make it untrue.

Best.

Statement Regarding Mortgage Electronic Registration Systems, Inc. (“MERS”)
There are certain instruments, including Mortgages, which are recorded in the public land records identifying Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee of the lender and the lender’s successors and assigns. MERS is the lienholder of record and holds legal title to the lien granted by the borrower in the Mortgage (“MERS Mortgage”) as the nominee (agent) of the lender and the lender’s successors and assigns who are members of the MERS® System.
As the mortgagee, MERS performs many of its actions, such as assignments of your mortgage, through individuals who are known as MERS Signing Officers and who may be designated as an officer of MERS on mortgage documents. Despite this designation, MERS Signing Officers are typically employees of the lenders, servicers, or other companies that are members of MERS, or employees of third-party agents of the members.

Sikubali jukumu. Read all posts at your own risk.
RichardP13


Posts:0


09/02/2019 7:23 PM  
Holy Sh$t is all I can say. I supposed having the ability to do a search on a topic you have no knowledge makes you a world expert. Kinda like the bozo occupying 1600 Pennsylvania Ave, when he's not out playing golf.
NpS
(Pennsylvania)

Posts:3655


09/02/2019 7:29 PM  
Best of luck to you Richard.

Sikubali jukumu. Read all posts at your own risk.
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