Texas. Homeowners living in HOA’s have been depicted as irresponsible individuals who feel no guilt about not paying their fair share of the community’s assessment fees and therefore cause other homeowners to have to pick up their slack. While there may be homeowners that do not take paying assessment fees seriously until faced with the painful consequence of foreclosure, they do not reflect the true story of what homeowners want while living in an HOA community.
When a fair and just system encourages the opportunity to pay, 99% of the homeowners will pay their assessments. What has caused the turmoil and problems we have seen over the past several years in HOA communities is the aggressive (and at times even predatory) collection practices some HOA’s agents (management companies and attorneys) have used. These traditional tactics have caused much alienation between the homeowner and their HOA board.
Whereas Texas currently uses a two-step process, with the second step being the threat of foreclosure, we have found an alternative for HOA debt collection. This intermediary step is most effective, but does not have the potential to remove homeowners from their home or to drain their bank account as the current HOA collection system does.
The results of the lien and foreclosure method of HOA collection have not yielded the return HOA’s desire. However at times it has caused dire consequences for homeowners, by removing them from their homes because they were willing, but temporarily unable to pay their assessment fees, due to various reasons (loss of job, health problems, the economy mainly). The goal to remove the homeowner from their house via foreclosure and replace them with a paying resident has not necessarily worked out either. Selling a house plagued with a clouded title, coupled with below-market valuations from auction sales and title flipping, can turn into a messy legal transaction. Such complications from these transactions can result in these communities having to pass on increased assessments to all their members. The legal morass, expense, and negative publicity can spill over and affect the HOA’s ability to sell the rest of their spec homes and lots, or to generally attract new homeowners to energize the community.
If the collection road is forever laden with the same cycle of alienation between the homeowner and the association, due mainly to the potholes of its collection practices, perhaps now is the time to utilize a collection system that paves a more fair, just, and effective resolution. We’ve found just such an option with a company that is in every state in the United States and has a proven record of success with HOA’s.
Ladies and gentlemen, board members and other interested parties, The National Homeowners Advocate Group is proud to introduce to you a “New Type of Collection Service on the Block”. This service utilizes a type of collection process known as a “dunning service”. While other companies may exist, we are endorsing this new alternative dunning service and recommending you draw on these resources by contacting Richard Slater, National Account Executive with NCSPlus Asset Recovery System. Mr. Slater has fifteen (15) years’ experience in the fields of Finance and Asset Recovery. You may contact Richard at firstname.lastname@example.org with any questions. The website is www.NCSPinc.com.
This dunning method is exclusively endorsed by the Florida Association of Counties due to its ability to recover assets without alienating their citizenry. As many of you are aware, Florida is also heavily populated with homeowner associations and has been plagued with HOA horror stories just like Texas, Arizona and California. This HOA collection problem has spread to places like Nevada as well and is spreading across the country.
We are not endorsing any other company at this time to perform this new type of collection service because Mr. Slater was the advocate who petitioned his firm to allow their dunning service, which is usually only accessible to governments, universities, and large enterprises, to be made available to even the smallest of HOA communities in order to provide the solution they so desperately need. As he has effectively implemented this solution for several communities throughout the country, we recommend that he would certainly be the best person to contact regarding properly initiating this process for your community.
The dunning service can be utilized by communities that are self managed or communities with management companies who have a collection problem and are looking for alternative methods other than those which drive up the cost with lien filings and subsequent foreclosures.
At the end of the “dunning” collection process, instead of being faced with a foreclosure (which is an option in the state of Texas as in “may foreclose” and not “must foreclose”), the consequence Mr. Slater’s firm uses is that of reporting delinquent dues on the homeowner’s credit. This intermediate consequence is effective in resolving approximately half of the cases Mr. Slater handles.
The dunning service approach never leads to foreclosure on the home. Its goal is to recover delinquent dues quickly, inexpensively and without alienation. And since homeowners always pay their HOA (or its management company) directly, HOA’s can rest assure they are getting all the funds they should as quickly as possible.
Homeowners and their boards have been at war long enough. It is time to come together for the benefit of your community, and allow for unpaid assessment fees to be collected in a fair and civilized manner. Inserting this dunning step recovers delinquencies without traumatizing the entire community. It helps eliminate increased assessment fees, collections that get out of hand, and the potential for injustice or abuse.
The cost per delinquent account is under $40.00 maximum. This avoids exorbitant attorney fees from accruing when the debt is resolved by the dunning service prior to legal action. Turning the debt over to a dunning service is faster, less expensive, and far less painful for all parties concerned than going through legal channels.
The heart behind this dunning service approach is to facilitate communication between the homeowner and their board, so they can make an equitable and timely reconciliation, and the homeowner can maintain their good standing with their community. Once communication is restored the parties can reconcile the amount owed and bring about an amicable recovery.
We encourage those who utilize this service to place your slow paying accounts into this service early in the delinquency cycle, before heavy attorney fees are added on top of the dues or woven into the payment plans, which happens when you pursue accounts legally. Instead turn the slow pay accounts over to the dunning service early for lower overhead. This also helps keep your assessment fees low.
Of course, any alternative business option is generally going to be met with resistance from those entities whose business model thrives by continuing to foster an unsuccessful, traditional, and expensive method. This is no exception. We ask the boards, who are the decision makers in our HOA communities, to take into account what is best for the homeowners that have voted them into office and what is best for the community at large. This National group welcomes hearing about your results with this alternative recovery method, which is currently successful in Texas and many other states, and will share your stories with others.
However beware of idea killers, the haters, and the many attempts to discourage you that you will receive from those profiting from the poorly functioning routine that now exists. Educate yourself as to what this simple dunning approach is all about, and learn how effective this option is, so you will not be deterred from its usage by those benefiting from the current dysfunctional system.
This dunning process complies with all Federal Fair Debt Collection Practices Act and Fair Credit Reporting Act requirements, and has been in use by Richard’s firm for over 27 years. The Florida Association of Counties vetted this firm in an 18-month process and selected his firm over every other option in the Nation. Mr. Slater’s firm is also in complete compliance with the new Texas HOA Law (HB 1228), because accounts are not ‘pledged or assigned’ and there is no ‘transfer of interest’ with this dunning service — so HOA’s retain all rights and ownership of their accounts at all times.
The National Homeowners Advocate group is 100% against any type of HOA foreclosure; therefore, we would never endorse any collection/dunning service that would lead to putting a homeowner out of their home. We reiterate, while we overwhelmingly support this type of alternative, we also wholeheartedly support Mr. Slater as the advocate to see to it that this healing process flourishes in Texas as he has made it flourish throughout various states.
We are certain there will now be vendors masquerading as dunning service providers – so be careful and compare what you learn from this article and from Mr. Slater with what you may be hearing from lesser copy cats. We want this dunning process to honorably help Texas homeowners just as it is helping homeowners and HOA’s throughout the Nation. Since we are a National Organization, if you are reading this article and not in Texas, please feel free to contact Mr. Slater, as mentioned earlier in this article, because his division makes this dunning service solution available nationally to HOA’s of all sizes.
Texas has an HOA collection problem and a high HOA foreclosure rate, much of which is the result of using outdated, ineffective, and hostile ways of collecting — which frankly aren’t working. The decision is in the hands of the boards across this state to elect to employ this dunning solution. The National Homeowners Advocate Group gets no commission from our endorsement of this dunning service or from Mr. Slater now or ever. And Mr. Slater’s firm works on a small flat fee basis. Their system is a uniform, unwavering process with a specific timeline; so there is no incentive for his firm to drag out anyone’s account to yield fees, because they have no additional fees.
Homeowner Advocates have testified for more than a decade to the legislative body seeking alternative collection methods, and placing a homeowner’s delinquent dues on their credit report instead of removing them from their home has been one of the primary alternatives we’ve promoted as late as this session. The adoption of this alternative collection practice is currently being used already in Texas, and in no way are HOA’s impeded from using this type of service as reported earlier in this article. In fact, this service creates a more livable atmosphere in your community for all concerned -— as also reported earlier in this article.
In closing, a professional dunning service allows mercy to be shown to those who deserve it, time to facilitate payments for those who need it, and a fair justice for those who warrant it. This system motivates those with the ability to pay who are unwilling, while affording flexibility for those willing to pay, but temporarily unable. All efforts direct homeowners back to making restitution directly with their association, with all services performed uniformly and for a low flat fee. The board need only make sure they have in place a management firm, or board member, or someone reliable to take calls from homeowners seeking to pay their assessment fees.
Let us all come together – community by community — across the state of Texas and finally get this nagging HOA debt collection issue healed through this new dunning service. We will help spread the word by our success to other states that as we reverse our assessment fee losses and lower our HOA foreclosure rate, so can they. Let’s make Texas the Poster Child of this dunning service solution. Please do not be shy about circulating this article to your various lists. Let us all participate in spreading the word regarding this HOA alternative collection method. Thank you.
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