Services to help with origination, servicing and default on properties in homeowners and condo owners associations
The number of properties within Homeowners Associations (HOA) and Condominium Owners Associations (COA) is high and growing, with 80 percent of new home construction taking place within that market.
To reduce or remove impediments to the seamless transition of properties under the jurisdiction of HOAs and COAs, wherever it falls in the mortgage lifecycle, Covius offers affordable, efficient, and compliant services. These services can determine a property’s HOA account status – including the amount and frequency of any outstanding dues – and uncover any adverse actions that were filed against the property – including liens and Notices of Default or Sale.
Asset owners, investors, and servicers also benefit, getting the HOA perspective they need to understand the overall health of their portfolio and manage the financial risk that HOAs and COAs may pose for liability, valuation, ability to convey, and preservation of lien position.
HOA Origination Services
Condo Package Retrieval™ (CPR)
Obtaining mortgage loan approval for condos is a lengthy, resource draining process. One of the most stubborn challenges in resolving COA or HOA liens is the lack of a central repository of the contact information for them and the property/unit addresses within those associations. Therefore, discovering a lien, then tracing the key data to cure it can slow down the loan origination process and also result in considerable expense.
Covius uses a robust and proprietary database unlike any other in combination with an impactful process to ensure your transaction will stay on course. Condo Package Retrieval™ (CPR) provides underwriters with a single, consistent, verified package to review. It reduces review turn times and speeds condo approval decisions for more loan originations.
Through our limited or full review condo packages, Covious delivers all of the documentation needed to ensure lender and investor guidelines are met in an easy-to-read format, ensuring that your project or property approval process progresses quickly and efficiently. The first of its kind, our national Community Association database enables you to capture association contact information, management company information and addresses it all from a single source. With a simple address Covius can identify the association(s) affiliated with a particular property, accelerating documentation retrieval, facilitating better decision making and streamlining the approval process.
- Centralizes and prioritizes approval process
- Increases underwriting efficiencies and reduces cycle time
- Eliminates variable origination costs
- Reduces repurchase risks
CPR Limited Review Package
- Completed Condo Questionnaire
- Insurance Declarations
- Flood (if applicable)
CPR Full Review Package
All Items in Limited Review Package PLUS
- COA Budget
- COA Bylaws
- COA CC&Rs
- Project Approval Review
- Initial Eligibility Assessment with Summary Findings
HOA Identification and Outreach
Covius’ HOA service will identify the presence of HOAs, the amount and frequency of dues, and any outstanding balances from previous owners that may derail or delay closings.
When purchasing a condominium, it is critical to review the resale certificate to understand the structure, rules and operation of the condo association. It is also a source of information for determining if the association has legal, financial or maintenance issues that need to be addressed. Covius will retrieve these documents and disclosures from the condo homeowners association on behalf of the lender and their borrower.
HOA Services for Loan Servicing and Default Management
Mortgage servicers often struggle to locate the corresponding HOA for properties in their servicing or REO portfolios. Often, a delinquent HOA account goes unnoticed. The result can be accrued fees and penalties that quickly evolve into significant HOA-related risk against the preservation of the 1st mortgage lien position.
Covius’ HOA services supply residential mortgage servicers with an HOA compliance solution that meets the HOA servicing requirements in the Fannie Mae and HUD Servicing Guidelines and may be an investor reimbursable item for the servicer.
Our HOA services allow mortgage servicers to bridge the communication and technology gap between themselves and the homeowner by facilitating dialog through the following services:
Community Association LocatorSM (CAL) – Proprietary HOA search technology identifies all community associations attached to a property and provides investors, servicers, and lenders with information needed to make delinquent HOA accounts current or settle outstanding claims.
Delinquency CheckSM (DC) – Facilitates retrieval and analysis of account documents – account statements, demand letters, Estoppel letters – from community associations on behalf of investors and servicers:
- Pertinent HOA Association Management Company contact information
- HOA account details such as assessment amount and frequency, current account balance, fees, penalties, and interest
- Payoff request, compared to statutory limits, reasonableness test, and customized client tolerances
- Payoff amount requested versus final negotiated amount, if negotiation services are requested
Retrieve documents and negotiate – At the request of an investor or servicer, Covius will assess the fees and charges billed by an association and determine if the account ledger or payoff demand is reasonable, is within state statutes, or is within customized client designated tolerances.
Covius also performs notice of default searches and will file a Request for Notice in applicable counties.
Our HOA Solutions toolkit provides HOA Risk Mitigation Solutions to expedite the default process when an HOA or COA is involved. They can identify and manage potential HOA obstacles and provide a central repository for references and contact information.
Request for Notice (RFN)
The complex foreclosure and repossession process gets more complicated when the asset in question has an HOA lien attached due to the owner’s failure to pay HOA assessments. More obstacles arise in “super lien” states, where an HOA super priority lien can extinguish the lender’s ﬁrst deed of trust.
Covius’ RFN service ensures you focus on the details, exercise your rights regarding HOA foreclosure, and protect your interests. Filed on behalf of a lender or servicer, the RFN puts the HOA on notice of the lender’s intent to protect its security interest. This document demands that the HOA provide a Notice of Default to the lender/servicer in the event the HOA intends to foreclose on a lien.
The Notice of Default (NOD) is prepared on behalf of the HOA. It is served by certiﬁed mail to the lender/servicer, who is given 30 days to bring the HOA account current in order to clear the HOA default.
- Both performing and non-performing loans can be foreclosed on by an HOA lien that has super priority
- An RFN protects your security interest in the event of an HOA NOD by providing lenders and servicers with time to act
- On average, more than 1% of portfolio loans result in NOD within 120 days of RFN ﬁling
- Risk of NOD ﬁling increases over time
- Stay abreast of potential HOA foreclosure before it happens
- RFNs can be provided upon receipt of data for each loan
- 30-60 day turnaround, depending on volume
- Covius prepares, executes and records RFNs with limited power of attorney or direct signature from your company
Let Covius help you track your requirements and defend your interests with RFN.
Other HOA Solutions for Default
- HOA notice of default status (HNS)
- HOA Lien Search (HLS)
- Reconciliation and Negotiation (RN) services to make necessary Payments that bring the property’s HOA accounts current and keep them current through disposition
- Monitor your entire portfolio for adverse action filings
- HOA Due Diligence
- HOA Curative to negotiate on your behalf a reduction in overall debt and risk
- Lien and Notice Monitoring