Seventy homeowners in Mint Hill’s Versage subdivision recently avoided potential foreclosure through one simple process: paying overdue homeowner’s association fees via a new online system.
The website, www.recoverhoadues.com, uses potential credit reporting instead of legal action to motivate residents to pay their HOA dues, which Versage Homeowner’s Association board member Shelton Lee said saves both the homeowner and the HOA a lot of money and hassle. The HOA pays the New York-based company $20 per delinquent account it handles.
Versage was approved for 288 homes in July 2002 and three additional homes in 2007, with the vast majority of the neighborhood being built before the recession hit in 2008, according to Mint Hill Town Planner John Hoard.
Lee said all 291 homes have been completed. He said the homeowner’s association provides a pool, common areas and trails, among other services.
Throughout the history of the subdivision, there have been 21 foreclosures, one of which is active. There also have been 12 short sales, all of which were sold or expired, according to online real estate records.
After 30 days, homeowners’ accounts are considered delinquent if HOA fees haven’t been paid. Lee said the Versage’s HOA continues to send out letters and phone calls to remind the homeowners to pay.
“We constantly remind them that it’s crucial that every homeowner pay their dues,” Lee said.
Before using the online system, if an account remained delinquent the property manager would place a lien on the house, which would add a fee of $200 to $300 to the account.
“When you’re billing homeowners for a lien that’s $200 to $300 per house, that’s hard on the homeowner. It’s very costly for the homeowner,” Lee said.
If a homeowner was unable to pay the Versage HOA dues – $186 twice a year – plus the amount to cover the lien on the house, they’d eventually be forced to foreclose.
But Lee and the rest of the Versage HOA board want to avoid more of these cases by helping families before they reach such a pitfall. Recoverhoadues.com allows homeowners with delinquent accounts to pay their HOA dues online directly to the HOA, with just a $20 processing fee. The process advocates communication between the residents and their HOA board, allowing each case to receive individual attention, Lee said.
“Through communication, through actively collecting on the bill, we have so many things we can do in addition (to) the $20 collection process,” he said.
The process also holds homeowners accountable through potential credit reporting. Instead of taking legal action, this system reports the delinquent accounts to credit agencies, affecting the resident’s credit score.
Although Lee said property management companies tried to talk the Versage HOA out of using the online method, he and his fellow board members felt it was in the best interest of the homeowners to pursue this softer approach.
“I’m not interested in making additional money for property managers and lawyers when there’s actually a more cost-effective way to do this,” he said. “They’re there to make money. As a citizen, I’m paying for this. I have a duty to look out for what’s in (fellow citizens’) best interest.”
Lee also said recoverhoadues.com, which is endorsed by the National Homeowners Association Group and has reportedly prevented 781 foreclosures in 241 communities across 14 states, has been extremely effective. Since the HOA began using the system three months ago, 70 out of 80 delinquent accounts have been paid, Lee said.
“It’s a great way to recover money from people who walk away from a home; when you send (their account) to collection, the debt follows them,” he said. “It’s been very successful for us (as the HOA) because we never lose control of the account; it stays with the HOA. For us, it’s been very effective, and it saves homeowners a lot of money.”