Posts Tagged ‘mortgage’

Limited Lien Priority for Community Associations

Tuesday, July 12, 2016 posted by Mindy Knudsen 1:37 PM

Article by LAC member and manager at CCMC/Coral Canyon, David Houston.

Does the Home  Owners Association (HOA) really want to take your home away from you? Empathically the answer is NO! Does the HOA have a fiduciary responsibility to protect the common assets of the association? Absolutely! This is where the “limited priority lien” comes into play. It is intended to give the HOA the tools/leverage to protect the HOA assets. This financial stability helps ensure each member pays their fair share and not put the burden onto others in the association.

The Community Association Institute (CAI) policy is simple and straight forward:

1. CAI believes community associations should be provided with six-month assessment lien priority over the lien of first mortgage or deed of trust.

2. This should apply only to monthly or periodic common expense assessments made by an association pursuant to an annual operating budget that would have become due in the absence of acceleration together with reasonable attorneys’ fees to collect this amount, and not to fines, penalties, late charges or special assessments imposed by the association.

3. CAI also supports modification of any law or secondary mortgage market guidelines restricting or discouraging lending institutions from making loans that are subject to the community association lien priority.

There are currently 22 States that have adopted a limited lien priority statute that provides financial protection for the HOA’s. Unfortunately, Utah is not one of those states. As you can imagine this is a battle between lending institutions, banks, mortgage companies and HOA’s. This tug of war has pushed itself to federal officials being lobbied by the lending institutions to restrict or discourage lending to states (HOA’s) that have priority lien status. This attempt to protect their investment could have devastating consequences to the balance sheet of HOA’s and shift the cost to other homeowners within those communities.

So, what can we do to keep the playing field level? Let me offer a few suggestions:

1. Be informed and involved in your community association.

2. Seek information from a variety of resources within our state: Utah Chapter Community Association Institute (UCCAI), Utah Legislative Action Committee (ULAC), your association attorney, managers, etc.

3. Contact your state and federal legislators indicating your support for “Limited Priority Liens” for HOA’s.

4. Be pro-active. There isn’t any pending legislation on priority liens in our state yet but with your support and help that can change.

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Monthly Mortgage Articles, February 2013

Friday, February 22, 2013 posted by Mindy Knudsen 4:33 PM

After a brief break, monthly mortgage articles are back for 2013.

The lastest update from CAI National’s Mortgage Matters Program is in. View past installments of national mortgage and community association information by clicking the above “Articles” tab, or go straight to February’s article by clicking here.

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Monthly Mortgage Articles, August 2012

Tuesday, August 21, 2012 posted by Mindy Knudsen 3:25 PM

The lastest update from CAI National’s Mortgage Matters Program is in. View past installments of national mortgage and community association information by clicking the above “Articles” tab, or go straight to August’s article by clicking here.

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Monthly Mortgage Articles, July 2012

Thursday, July 26, 2012 posted by Mindy Knudsen 2:24 PM

The lastest update from CAI National’s Mortgage Matters Program is in. View past installments of national mortgage and community association information by clicking the above “Articles” tab, or go straight to July’s article by clicking here.

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Monthly Mortgage Articles, June 2012

Thursday, July 26, 2012 posted by Mindy Knudsen 2:21 PM

The lastest update from CAI National’s Mortgage Matters Program is in. View past installments of national mortgage and community association information by clicking the above “Articles” tab, or go straight to June’s article by clicking here.

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