LRES White Paper Offers Advice for Mortgage Servicers on HOA Liens

LRES, Orange, Calif., issued a free white paper, What Mortgage Servicers Need to Know to Prevent Liens from Destroying Investor Profits.

The paper discusses confusion over the lien position of HOA properties in relation to investors and mortgage holders, as well as provides guidance for loan servicers on how to protect the lien rights of their investors where conflicts arise between the various lienholders of a property residing in one of these communities.

“One recurring challenge occurs when an HOA forecloses on a property for unpaid association fees, and the servicer then faces significant risk of increased loss and even of losing its investor’s stake in the property,” the paper said. “Since no investor would consider this acceptable, servicers are left in need of a better method of managing the HOA lien process.”

Homeowner associations are very important to the housing industry as a whole, which is why it is extremely important for servicers to have a good understanding of the risks to be mitigated and the requirements for doing so,” said Roger Beane, LRES founder and CEO.

The paper can be accessed at http://info.lres.com/what-mortgage-servicers-need-to-know-to-prevent-hoa-liens-from-destroying-investor-profits.