When an expensive payment plan deal becomes a foreclosure
Senator West’s HOA Reform SB 142 contains a flawed “Priority of Payments” section that will dictate how homeowner HOA payments must be applied.  SB 142 has a “Payment Plan” section as well that will officially dictate that HOAs must offer a payment plan under state law, to homeowners who are delinquent on their dues. Senator West has added both requirements to Rep. Dutton’s HB 1228.  The problem is that the Priority of Payment as it is currently written has the (b) exception that would allow current abusive practices of applying all payments to attorney fees under a payment plan, so that business will continue as usual.

Beware of HOA Payment Plan
When an expensive payment plan deal becomes a foreclosure

Senator West’s SB 142 HOA Reform contains a flawed “Priority of Payments” section that will dictate how homeowner HOA payments must be applied.  SB 142 has a “Payment Plan” section as well that will officially dictate that HOAs must offer a payment plan under state law, to homeowners who are delinquent on their dues. Senator West has added both requirements to Rep. Dutton’s HB 1228.  The problem is that the Priority of Payment as it is currently written has the (b) exception that would allow current abusive practices of applying all payments to attorney fees under a payment plan, so that business will continue as usual.

See Dutton’s HB1228 as substituted by West:
http://www.capitol.state.tx.us/tlodocs/82R/billtext/doc/HB01228S.doc
Senator West has attached the following Exception to Sec. 209.0063 page 3. 
(b) If, at the time the property owners' association receives a payment from a property owner,
the owner is in default under a payment plan entered into with the association: (1)  the association
is not required to apply the payment in the order of priority specified by Subsection (a); and
(2)  in applying the payment, a fine assessed by the association may not be given priority over
any other amount owed to the association.

 Current payment plan industry practices: 

1.    Payment plans have become a prerequisite to foreclosure.  See HOBB Report:
      1,425%    Markup - Big Corporate Business for HOA Non-Judicial Foreclosures

2.    An elite group of industry attorneys/debt collectors have captured the market of
      no- win homeowner’s payment plans as the option for HOA foreclosure on homesteads.

3.   The HOAs attorney business plan objectives of payment plans: 

a)  Is to derive a steady stream of income for themselves as the debt collector; while the debt continues to mount under the payment plan  

b)  When a payment is missed under the plan (anticipated), the HOA attorney posts notice for a “NON–Juridical” foreclosure again, adding more fees and offers another payment plan or face foreclosure.  Additionally, homeowners may be required to sign an Agreed Judgment 

c)  With 2 to as many as 5 times of payment plan extensions and notice postings, the attorney submits the Agreed Judgment for a default before the judge under a Judicial Foreclosure 

Foreclosed – THE END