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Rising Foreclosure Rates Cause HOAs To Fall Into Bankruptcy

Posted: 11:21 pm EDT March 13, 2008Updated: 2:10 pm EDT March 14, 2008

The Avalon Lakes Homeowners Association was on the brink of bankruptcy. At one time, it had a $140,000 deficit. The subdivision said people who fell into foreclosure stopped paying their HOA FEES.

“The people that weren’t paying, still aren’t paying and we’re basically paying for them,” said Cynthia Weclew, a homeowner.

There are concerns about what will happen to the communal areas of the subdivisions if the HOAs can’t afford the upkeep.

Lavon Williams with Orange County’s Neighborhood Services said her office is collecting data to see how the amount of forecloures in the county are affecting HOAs.

“We certainly don’t want to cry that the sky is falling, but we do want to be proactive,” said Williams.

There are more than 1,000 registered Homeowner’s Associations in Orange County. There are 4,000 and 5,000 subdivisions.

Right now there are more than 2,300 active home foreclosures in Orange County. That’s the third highest number in the state.
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