Mortgage Market Update - HOA's On Who's List?

Delays in closings are the number one cause for a client to be disappointed with the process of purchasing a home. This year with all the foreclosures, shorts sales and changes in the industry we now have another item to pay attention to that now can be added to your already long list of things to do. Home owners associations are a part of many communities and are now may be creating delays as the owners of foreclosed properties may not be current on association dues or having a property with a subdivision violation that need to be corrected before a closing can occur.

This is not surprising to me as many times, we(Lenders) receive realestate contracts are lucky to have any disclosure notifying anyone that there is a Home Owners Association(HOA). It is great for a lender to know up front so we can quote accurate closing costs and payments. Home owner associations have initiation fees that can affect the buyers funds for closing or monthly fees that affect payments. Upfront disclosure is always the remedy for all parties to facilitate a smooth closing.

To miss closing dates or have delays caused by no one obtaining the HOA info or being able to clear any conditions in a 30 day period is unacceptable. This is not meant to point fingers but there has to be a better way. I believe the first line of defense against this is a listing agent providing information on the HOA and to properly disclose in the initial contracts. This will greatly assist all so that by the time it reaches the closing attorney they are alerted to contact the HOA and can now get any information pertaining to the home. Lets not wait for the title report to come back. Buyers agents also need to ask when making offers - may be helpful to provide in the listing information. Once this is identified up front this should allow for more time for the title agent to obtain the info. Again lets not wait for the closing agent to find out there is a HOA and then start the process. I find it hard to belive that a listing agent would not have this info and or a buyers agent would not do any due diligence when receiving or making offers just seems like common sense. Yes common sense however, this does not have much to do with what we are dealing with today. Dont kill the messenger I was told to say this. By the way dealing with foreclosure attorneys is never a winning experience when issues arise that are time sensitive. This is not the hard stuff and should be a simple fix. Us survivors need to stick together.

Any insight/feedback is greatly appreciated.

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