HOA Property managers holding refi hostage? UPDATE

[bozo_casanova]

So I'm in the process of refinancing my house, and my homeowners' association told UFCU they wanted $104 to "certify" that I was current on the HOA dues.

That's $75 fee for them, and another 29.99 for an online outfit who actually produces the certification.

UFCU called me and told me that I could just produce a canceled check or something, and that this seemed weird and high cost just to show that I'm current.

Then I call the property manager to get a statement, and he even refers me to the same website, and when I object he says- get this - that if the loan officer thinks a canceled check is all they need, that's "naive", and "maybe they don't do this a lot".

So I ask the realtors, etc- is this common? Do property managers usually get to dip their beak in a refi and skim ~$100 extra off their homeowners on top of their dues? Or am I the naive one?

 

[JohnnyM]

That's absurd that they charge any kind of fee. You don't need a fancy certificate for this.

If your bank will go for a canceled check, just do that. The bank only wants it so that any future lien created by non-payment of dues will be behind their mortgage. If they will accept a canceled check as proof that you're current and there are no unpaid dues which may become a superior lien, go for it.

 

[chango]

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[bozo_casanova]

Is it common to charge any fee for this? Seriously- if my dues don't already cover such a basic service of demonstrating account status, what do they cover?

 

[chango]

Its been a requirement in every townhome/condo I've been the loan officer for. It used to just be taken from the borrower's proceeds or added to the loan on the settlement statement but in the last year or so it seems the companies are requiring credit card payment upfront.

 

[zzzz]

My understanding is many homeowners associations have outsourced due collection to outside firms -- many times lawyers who immediately file a lien against a home when dues go unpaid. So this is likely some third party milking the relationship for $$$.

 

[bozo_casanova]

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[chango]

In my experience, I've never seen a neighborhood HOA charge to certify that dues are current-its always been the condo/townhome associations. I don't know, bro...

 

[mishatx]

I remember paying some fee to my HOA when I got my original mortgage, and again a couple years later when I refied. I tried to fight it, but to no avail.

 

[madscientist]

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[Ignatius]

Yet another advantage to living in the City of Austin....

 

[bozo_casanova]

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[Seattle Husker]

I own a condo in a 58 unit building in Seattle and they have a similar charge. You must have one seriously strong HOA in your subdivision if they are trying to do this also.

 

[bozo_casanova]

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[NoleHorn]

my HOA charged a $75 fee for refinancing

 

[JohnnyM]

chango is right that you have to clear underwriting. what i was saying was do the absolute minimum that the bank requires, since they are only requiring this for their benefit. your HOA cannot stop you from getting your refinance even if you don't get this certificate.

 

[bozo_casanova]

Like I said, my HOA doesn't care if I refinance. My property managers just want to get a taste of the transaction.

 

[ninerhorn]

Is this to verify you are in good standing with your HOA?

Do you pay your HOA fee with your escrow? Straight to the property management company?

Maybe a statement showing your payment history would be enough to get an underwriter to sign off on this?

What about a letter from your HOA to the property manager threatening to end the business relationship?

 

[Gardner Barnes]

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[Summerof79]

can't you simply request a current statment of your account from the HOA? I would imainge it would be illegal to charge a fee for that.

Sounds like a real pisser to me

 

[madscientist]

it gets worse. since texas only allowed cash out refinances in 1999, some HOAs have it expressly written on schedule B of title that they do not subordinate to equity refinances. If an underwriter sees that on title, they will ask for a 90 day letter from the HOA that says they will notify the lender of their intention to foreclose on a property for dues at least 90 days before they do so, so the lender can pay them and raise their payment accordingly instead of have the HOA take the house from under them. Some HOAs will refuse to do this, and it has cost my former company loans as the transaction could not be completed without it.

HOAs in texas have entirely too much power. especially in houston, where zoning laws are lacking so the HOA is used to regulate property usage.

 

[bozo_casanova]

I produced my payment history for the HOA. Underwriting accepted, problem solved. My next step is to get these property managers dumped. They are terrible.

 

[chango]

Nice! Glad you avoid the bs fee...

 

[Sangre Naranjada]

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