LERETA and Sperlonga Data and Analytics Systems have debuted a solution for homeowner association (HOA) reporting and payments, whereby mortgage servicers can automatically monitor payments for properties in HOA and condominium associations.
Using the new solution, LERETA will track and report delinquencies to servicers before missed payments become liens and/or accrue heavy penalties. Many times, these payments and penalties are not reimbursable to the servicer. Early action on identified delinquencies reduces overall penalties by 300%, if they occur before a lien is filed.
The company will also offer an HOA escrow service, similar to tax escrow accounts – a first of its kind for the servicing industry, the company says.
“Every year, HOAs nationwide collect more than $100 billion in assessments and dues, and at any given time an estimated 10 percent of these fees are delinquent,” says John Walsh, CEO of LERETA. “In more than 20 super lien states, unpaid HOA fees – like taxes – can take priority over a mortgage and result in the loss of a property. This creates significant risk for servicers and investors.”
Sperlonga, a data aggregator to property managers and HOAs, and can currently access automated payment information for more than 80% of properties in these communities.
“The combination of their real-time data and LERETA’s deep experience in escrow payment technology and delinquency management is a first-of-its-kind solution to a real and growing problem for the servicing industry,” Walsh says.
The LERETA solution provides life of loan coverage and can be set up during the origination process, as part of escrow setup.