She owed her Mesquite HOA $3,500. Now, she’s losing the home she owned for 18 years

Mesquite resident Finda Koroma risks losing her home. In Texas, homeowners associations can foreclose on residents to recoup any amount of debt.

By Christopher Connelly, KERA NewsNovember 22, 2023 9:00 am, ,

Finda Koroma has lived in her spacious brick four-bedroom home in Mesquite since 2005. She bought one of the first homes built in The Hills at Tealwood neighborhood.

The 68-year-old home health nurse from Sierra Leone has been renovating the house, bit by bit, every time she’s scraped together enough money to pay the contractor. Her plan was to sell the house to fund her retirement.

Instead, she’s facing eviction after her homeowner’s association board — some of her neighbors — voted to foreclose on her house and sold it to recoup a $3,542.64 debt.

“I’ve been here all these years, worked my butt off…and then all of a sudden somebody can just come overnight and take everything away from you? Just like that?” Koroma said.

Jason Reed, a lawyer for The Hills at Tealwood HOA, said that was the remedy the association had available to them.

“Unfortunately, from time to time, they have to utilize that remedy in order to recover funds that are that are owed to the association that haven’t been paid,” Reed said.

When residents don’t pay the HOA fees that cover the costs of operating the association and maintaining shared amenities, Reed said, “the other people in the community are effectively carrying the burden of that person not paying.”

Now, Koroma said she barely sleeps because she’s so stressed out. She doesn’t know where she’ll go if she’s forced to leave her home. She vacillates between outrage and despair at the thought of losing her home, which Zillow estimates is worth about $340,000.

“This is a daylight robbery,” Koroma said.

Foreclosure rules

It’s not clear how often HOAs foreclose on their residents. Texas does not track these cases.

According to the Community Association Institute, an industry organization, 1 in 3 owner-occupied homes in Texas are governed by the 21,000 associations operating in the state. These nonprofit associations have broad powers to set and enforce their own rules beyond local laws and ordinances. An HOA’s terms are typically set by a subdivision’s developer long before anyone even buys a home.

“Those rules run with the land. You buy the land, and you’re subject to those HOA rules,” said Nick Veach, an attorney specializing in HOA lawsuits. “And all HOAs give a right to foreclose”

Under Texas law, an HOA has to follow a handful of steps before it can get a court’s approval to foreclose on a homeowner. In many cases, HOA rules authorize an expedited approach that avoids a full lawsuit.

“Once they convince a judge that [the resident] is properly served with a citation, which means she’s been notified she’s been sued, and she doesn’t appear in court or file any type of answer, the lawyer just sends an order and the judge signs it,” Veach said.

At that point, the HOA has the right to sell the home.

Yfat Yossifor / KERA News

Finda Koroma says she was not notified that the HOA foreclosed her Mesquite home, only finding out when she received an eviction notice.

In Koroma’s case, that court order was signed in the summer of 2021, about a year and a half before the home was actually sold. In its application, the HOA submitted documents stating that she’d been properly notified, both by mail and by a private process server.

Koroma said the first she learned of the foreclosure came two years later, when she received the eviction notice. She said she never saw the HOA’s correspondence.

Koroma knew she’d missed payments to the HOA, especially during the pandemic. As a home health nurse who mostly cares for elderly people, she said she lost work when COVID-19 hit. Many of her patients died, she said.

“I didn’t have clients, so there was nothing coming in. I was even behind on my mortgage,” she said.

She tried unsuccessfully to declare bankruptcy to get her finances in order. But by this year, she thought she’d largely righted the ship. She modified her loan in 2022 to get her mortgage under control. And she began investing in the house — upgrading the bathrooms, building a covered patio, painting every room and replacing flooring — when she had the cash to pay for the work.

“The little savings that I have, that’s what I used to renovate the house. If I knew that the house would be going, I wouldn’t have put that money into the house. Because that’s all I have,” Koroma said.

She said she’s also been sending checks to the HOA in excess of the quarterly assessment fee, thinking she’d be able to get square with the association, even after the home was no longer hers.

KERA News contacted people identified as members of The Hills at Tealwood HOA board as well as its management company. Reed indicated he was speaking on behalf of the board and the management company.

Reed said Koroma would be refunded for the payments sent after the foreclosure.

Where the money goes

Once a homeowner gets behind on payments to the HOA, many find their debt balloons, said Nancy Kozanecki, who heads the HOA Reform Coalition, an advocacy group made up of volunteers. Management companies typically tack on late fees and interest, Kozanecki said, and charge residents for the cost of having an attorney send them a letter demanding payment.

“It just continues to snowball. It is one of the saddest things I have ever seen. And how the state of Texas allows a nonprofit corporation to steal people’s houses like this is ridiculous,” Kozanecki said.

An account summary submitted by the HOA shows that much of the debt Koroma owed didn’t come from missed payments, but from penalties for missing and late payments. That includes interest on the debt, about $400 in late fees, and another $1,900 for legal and other costs, including the costs of filing the application to foreclose on her.

“The HOA itself is nonprofit. The attorneys and the management companies and everything else that supports that nonprofit are for-profit organizations. And they’re trying to find ways to make money off the HOA,” Kozanecki said.

When an HOA forecloses on a resident’s home, it doesn’t make a profit. The home is sold to the highest bidder at a county-run auction. The association takes the resident’s debt out of the proceeds, as well as attorney fees and other costs the association incurred in the process. Any money left over after the HOA recoups its debt and pays its legal fees goes to the resident who lost their home.

From the sale of Koroma’s home for $82,000, the HOA deducted $3,500 debt and took out nearly $4,500 for legal and other expenses. That leaves an overage of just under $74,000 that will go to Koroma. That’s about a quarter of the estimated value on real estate sites like Zillow and Redfin, and less than half of what she paid for the home in 2005.

“The law needs to change,” Koroma said. “They cannot just deprive [people like me]. We are helpless, we don’t have a voice, we need somebody to help us to fight the HOA.”

Kozanecki said the coalition wants Texas lawmakers to end an HOA’s right to foreclose entirely. They’ve tried to find legislative support for increasing protections for homeowners. But the group of volunteer activists have been largely unsuccessful, she said.

Eviction fight

In August, Koroma said she received a notice that Summit Residential Services had begun the process of evicting her. It was almost eight months after the company bought the property at the foreclosure sale, well after a window where Koroma could have reversed the sale by paying the debt to the HOA.

Koroma said she went into overdrive trying to figure out how this was happening. She lost her case in a justice of the peace court, where evictions typically are heard, and was given just a handful of days to either appeal the ruling or move out.

With the help of Legal Aid of Northwest Texas, she appealed the ruling. That case will be heard at the end of the month.

Korsays she feels she was targeted – maybe because her home has a lot of equity, maybe because of who she is.

“They just want to seize advantage because, looking at me, I’m Black and African, a foreigner in this country,” she said.

Yfat Yossifor / KERA News

Finda Koroma wipes away tears as she talks about the eviction notice she received after her HOA foreclosed her home Monday Oct. 30, 2023, in Mesquite.

Drew Siegel, a lawyer who represents Summit Residential Services, said his client bought the house at auction knowing nothing about her, and that his client has a right to force her to leave.

“Now, Summit owns the house. And I know she’s upset about it, but my guy is just an innocent purchaser at the foreclosure sale and owns the house and needs to get her out so he can sell it or lease it,” said Siegel.

After Koroma appealed the eviction, Summit Residential Services filed a second lawsuit. The company is suing Koroma for over $25,000 in rent for the months she’s been living in the house after it was sold. In an interview, Merrill said case law clearly entitles his client to the money.

Veach, the independent attorney, said he doesn’t think Summit has such a slam-dunk argument for back-rent. But, unless Koroma finds a legal basis to overturn the court order giving the HOA permission to foreclose on her house, he said she is likely to lose the home.

In legal filings for Koroma, Legal Aid attorney Natalie Ramm rebutted the rent claim as well. She also argued that the title for the property was clouded. Ramm said they’re still considering options.

“I’m not going to give up with a fight,” Koroma said.

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