Foreclosure Notice Didn't Come From Bank. Their HOA Sent It

"At first it was denial, like, 'Oh, that’s just a threat. They can’t take away your home.' And then, as things progressed, [we realized], 'Yes, they can take away your home.'" The "they" in this case wasn't the Colorado townhouse-owner's mortgage lender. It was her HOA. A joint Rocky Mountain PBS/ProPublica report takes a deep dive into the ability of homeowners associations in Colorado to foreclose on homeowners who fall behind on the monthly fees they pay to cover common expenses that can range from landscaping and repairs to a neighborhood pool and trash collection. The state is home to more than 10,000 HOAs—almost half the state's residents live in property governed by one—and the report finds they wield "enormous power" over homeowners.

Under Colorado law, HOAs can file liens against the properties of delinquent homeowners; once a homeowner falls the equivalent of six months behind, the HOA can seek foreclosure on the lien. Rocky Mountain PBS and ProPublica's analysis found 2,400 foreclosures were filed by HOAs between January 2018 and February 2022, with nearly 10% resulting in a sheriff's sale of the property. And while most Colorado HOAs don't engage in the practice, some of the ones that employ it do so frequently: For example, the Timbers has about 400 units and has filed 41 foreclosure cases involving 31 homeowners since 2018. Crazier still, in many HOA foreclosure cases, much of the money the HOA is seeking isn't for assessments but for attorney's fees. For instance, one Timbers' resident owed $5,311, but only $480 of it was for unpaid assessments. (Read the full story here.)