Aggressive HOAs are running out of money and foreclosing on more residents than ever before

America’s homeowners associations are running out of money — and patience.Amid rising insurance premiums, drained reserve funds and increased safety measures in the wake of the Surfside condominium collapse, the country’s hundreds of thousands of homeowners associations are cracking down on delinquent residents.HOAs are skipping grace periods and handing delinquent accounts over to attorneys.HOA foreclosures spiked nearly 40% in two years to 6,376 properties in the first quarter, according to real estate analytics firm Attom, as reported by the Wall Street Journal, putting its pace ahead of overall mortgage foreclosure rates.These foreclosure sales are “like most foreclosures in that they are typically an auction,” attorney Kirk Pearson, who represents homeowners in HOA disputes, told The Post.“If the property is sold at auction, the homeowner has a 90-day right to redemption where they can buy the property back by paying any delinquent amounts plus any collection fees and costs.

If there are no bidders at the foreclosure sale, then the HOA takes ownership of the property.The HOA can then keep the property, sell it, transfer it to the bank where there is a senior lien holder, or allow bank foreclosure.”From there, if a homeowner can’t clear their delinquent dues, fees and legal costs during the redemption period following a foreclosure sale, they lose their home and are forced to start over elsewhere.

But the missed dues are often only a fraction of the bill — the real burden comes from ballooning collection costs, Pearson said.HOAs frequently outsource delinquencies to specialized collection firms that profit by tacking heavy fees onto outstanding balances.

Worse, these firms are often owned by the same corporate attorneys advising the HOA, the California attorney noted.That gives the HOA’s legal team a lucrative financial reason to aggressively pursue foreclosures instead of helping residents resolve their debt.Millions of Americans are pa...