The number of Texas foreclosure homes dropped by 7 percent last month from July but still 4 percent higher compared to August the previous year. The figures showed that one out of 838 houses in Texas was in some stage of foreclosure process, earning the state the 27th position nationwide in terms of foreclosure rate.
The growing foreclosure problem in the state has severely affected homeowners' associations in Dallas-Fort Worth area. Adding to the associations' problems are the recession, unemployment and rising number of abandoned and vacant houses.
All these problems resulted to slow collection of association dues. To boost their collections and their coffers, many homeowners' association in Texas have increased their dues, imposed emergency fees and forced foreclosures.
Furthermore, some associations save money by delaying capital improvements and maintenance, reviewing service bids and even requesting residents to volunteer for projects. In some communities, the associations have put up their own parks and amenities to compensate for the lack of city facilities.
Industry experts said that homeowners' associations have been severely hurting from the large volume of Texas foreclosure homes. Residents in Park View hills have been opposing a special assessment that doubled their annual association dues, in addition that it should be paid within a month.
Frustrated homeowners crowded into association meetings, complaining about the special assessment and accusing the association of incompetence for neglecting maintenance. Their complaints prompted the homeowners' association to extend for a month the deadline to pay the special assessment and to start cutting the waist-high grasses in the park and cleaning the flower beds.
Meanwhile, in Woodland Springs, the homeowners' association also boosted the community's water-well production in order to reduce water costs, reviewed its contract for property management services and landscaping and invested in cash reserves. Some homeowners' association members said that they need to do something in order to survive.
On the other hand, condominium communities are also reeling from the effects of foreclosures. According to industry experts, condominium owners are facing a difficult situation because their monthly dues are almost equal to yearly assessments in neighborhoods with single-family houses.
Experts said that homeowners' associations used to keep their assessments low during economic downturns. But this left many of them short of funds when the foreclosure problem hit and collections declined.
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