SAN ANTONIO - You may not know this, but thousands of people in our community are struggling just to feed their family and pay their mortgage.
Even worse, some of those struggling homeowners are now facing foreclosure and it has nothing to do with paying a mortgage. The News 4 WOAI Trouble Shooter uncovered more and more families are actually losing their homes because they cannot afford to pay the homeowners association fees. The number of foreclosures by HOA's is skyrocketing.
We spoke with Tony Goodman, a man who’s losing his home right now because of problems with his homeowners association.
“I'm legally being robbed,” said Goodman.
Like a lot of people these days, Tony was out of work for ten months and struggling to pay his bills. The Lookout Canyon Creek HOA foreclosed on his $165,000 home because he owes the HOA $769. They auctioned off his house on the court house steps this past April because he had not paid them.
When you add in the late fees and attorney fees the total amount he now owes is just over $2,000.
“Although I know it's not really my fault, I feel like I'm failing my wife and my kids and that hurts,” said Goodman.
What’s worse is that Tony is not alone. The number of HOA's seizing homes for late payments is going through the roof. According to Bexar County foreclosure sales records, supplied by rexreport.com, the number of HOA foreclosures has jumped 78% in Bexar County, when you compare 2008 to 2009.
Lawyer Tom Newton is the man behind almost all of San Antonio's HOA foreclosures. News 4 WOAI Trouble Shooter Brian Collister spoke with Newton back in 2007 when he foreclosed on a disabled couple’s home.
Back then, Collister asked the attorney, "You feel comfortable kicking a disabled family out of their home for a few hundred dollars in HOA fees?”
"I feel comfortable in taking those steps necessary to enforce my clients’ legal rights,” Newton answered.
This time around Tom Newton refused to speak with us on camera. However, he did send News 4 WOAI an e-mail about the current spike in HOA foreclosures. Part of that email reads:
"I would point out that HOA’s have bills to pay and obligations to meet during these times, too. People who get foreclosed on by their HOA’s have been given ample written notice and payment plan opportunities, if I have been involved."
Tony tells us Newton did offer him a payment plan but the HOA board refused to accept what he told them he could pay.
“I tried to do the right thing. I tried to enter into a payment plan. It was rejected twice,” Tony explained.
We tried to get Tony's neighbors, who sit on the HOA board, to explain why they wouldn't work with him. But after leaving messages for the HOA president and talking to the management company, we got no response from the board.
So that’s when News 4 WOAI’s Brian Collister showed up to one of the HOA meetings to get an answer. Within minutes of walking in, the HOA’s Vice President, Keith Lindsey, asked Collister to leave. Then he called police. After the police came and explained to the HOA board that it’s not a crime to ask questions, we took this problem to State Representative David Leibowitz.
Leibowitz has filed bills in the past to stop this type of practice, but hasn’t been that successful. But he says he’ll keep trying and plans to take another bill to the legislature next term. He also plans to use Tony’s story, and others, as an example of why there needs to be laws against this.
“I want to change it because I don't think it was ever intended for someone to lose their home over a few hundred dollars in homeowners dues owed as a result of losing their job,” said Leibowitz.
When the legislature meets next year, News 4 WOAI plans to follow the fight to outlaw HOA's from taking your home and let you know what happens.
Update: After getting word that our story would soon be airing, Tony Goodman got some good news. Because of our investigation, Goodman got a letter from his HOA offering to let him make payments to stay in his home.
** A personal note from Brian: I joined my subdivisions HOA board last year. At my first meeting I proposed we never foreclose on any resident for any reason (especially in light of the bad economy) and that we no longer use attorney Tom Newton. None of the other HOA board members would agree to either suggestion.
**The following emails are from Attorney Tom Newton in response to a request for an interview and information about HOA foreclosures:
Thanks, but I decline the interview.
I would point out that HOAs have bills to pay and obligations to meet during these times too. If everyone does not pay their fair share, then the whole
community may suffer, and the HOAs will have to default on their payments to their creditors and vendors. Most HOAs need to collect assessments
in order to meet budget, as their assessments are often just enough to cover their expenses. Also, there is a four year statute of limitations on debt collection lawsuits and lien foreclosures, so the HOAs are legally required to take action before they lose their rights.
People who get foreclosed on by their HOAs have been given ample written notice and payment plan opportunities, if I have been involved.
Tom L. Newton, Jr.
Attorney at Law
ALLEN, STEIN & DURBIN, P.C.
Brian-
A few points, in general:
1. Section 209.008(f), Texas Property Code, imposes a cap on legal fees for non-judicial foreclosures at the greater of one-third of the amount of all actual costs and assessments, excluding legal fees, plus interest and costs, or $2,500. The Texas Legislature has decided that fees of up to those amounts are proper and allowed. We always charge far less than the law allows on non-judicial foreclosures.
2. The same amount of legal work is required to collect when the amount owed is $500 as $50,000. The amount owed is just a number, which does not mean less work or fewer hoops for the HOA to jump through when the amount owed is smaller.
3. Why do people not get excited when a multi-billion dollar, taxpayer-bailed out bank like JP Morgan Chase or Bank of America forecloses on six months of unpaid mortgage payments, but they think it is wrong for a non-profit HOA, which is usually funded solely by members' dues, to foreclose on two or three years of assessments? This thought process is not fair, objective or reasonable.
4. Every payment plan proposed to my office is presented to the Board of Directors of each Association for a decision. Please don't give your viewers the false impression that the heartless lawyer makes these decisions. It's their neighbors, who pay their own bills, who get to decide.
Tom L. Newton, Jr.
Attorney at Law
ALLEN, STEIN & DURBIN, P.C.
