HOA Foreclosure: Does the Punishment Fit the Offense?

"HOA Foreclosure: Does the Punishment Fit the Offense?" (a background study prepared by staff to the Senate Housing Committee hearings on association foreclosure convened by Senator Denise Ducheny, Chair, February 17, 2004.)

HOMEOWNER ASSOCIATION FORECLOSURE:

DOES THE PUNISHMENT FIT THE OFFENSE?

 

 

An informational hearing

 

February 17, 2004

State Capitol, Room 112

 

 

BACKGROUND PAPER

 

 

Purpose

 

For many households, the home is not only the center of family life but also the family's major financial asset.  In recognition of these facts, public policy has long encouraged and protected homeownership.  Homeowners are given tax deductions for mortgage interest payments.  In addition, certain amounts of home equity are exempt from collection from most money judgements under the homestead exemption. 

 

Yet in the context of a common interest development, one's home can be at risk.   Homeowner associations can and do foreclose upon the homes of members, often for small amounts of past due assessments.  In one recent example, a family lost its home to foreclosure after failing to pay $120 in assessments.   Moreover, homeowner associations are not subject to many of the limitations imposed o

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