How Supposedly Loyal Americans Steal from Fellow Americans

January 29, 2003

By Gerald Ainsley
Copyright ahrc.com

The United States seems to be going through a particularly virulent enronitis epidemic these days.

"Enronitis" is the disease where a flag waving American swears eternal allegiance to his country, while simultaneously ripping off thousands of his fellow Americans, and pocketing millions for himself in the process. There is a known cure but few seem willing to take it.

For those who have been around awhile or know their history, this disease is not unfamiliar. However, recent years seem to have witnessed more and more outbreaks of it. One area of our national life, however, has largely escaped scrutiny for this disease - homeowner associations.

Homeowner associations according to the glossy brochures put out by the industry are those pretty little homes where neatly dressed people stroll past neatly mowed lawns on their way to neat little swimming pools. The reality is not so idyllic - in fact, in many cases around the country - it is downright nasty.

Take, for example, Winona Blevins, a widow in her 70's who was ill. She was sitting at home one day in Texas, when the sheriff knocked on her door and told her that she was going to be evicted. Winona was unceremoniously escorted out of the house and onto what used to be her driveway.

Marie Brown, a 77 year old lady in Arizona, was likewise dumped out of her house because of a dispute with her association over trimming some bushes.

One couple in Virginia is making preparations to have their two children cared for, when they go to jail because they have been flying the American flag in their association. The husband is a disabled veteran. Apparently, you can die for your flag, but not fly it. He says that he held many of his comrades in his arms while they died. He made a vow to always fly the flag for which they died.

Now what is behind these situations - and the thousands of others around the country? Two words - money and lawyers. The homeowner cannot pay the exorbitant fees of the association lawyer, and hey presto - they are out on the street.

In Arizona, a state representative, Eddie Farnsworth, saw the picture of Marie Brown being wheeled out strapped to a gurney and decided to introduce a bill that would ban the foreclosing of homes for homeowner association assessments and fees, HB 2307. As expected, the Enrons have roused themselves to defeat the bill.

Scott Carpenter is one of the leading Enrons. A homeowner association lawyer and head of the Arizona Legislative Action Committee - the lobbying arm of the nationwide homeowner association industry group, Community Association Institute (CAI) - he is gearing up for a major battle against the bill, as it would put a big dent in his business. His main argument is that it would allow deadbeats to live in homeowner associations for years, creating financial hardship for other members.

His critics reply that deadbeats are the exception, and that existing remedies in the law will handle most of them without resorting to throwing somebody out on the street - for example, garnishing wages or attaching bank accounts. For the very few for whom these remedies do not work, the critics say it will not be such a hardship for an association to wait until the property is sold.

Big money is also lining up against the bill. One bank, 1st National Bank of Arizona and its subsidiary Community Associations Banc, which admits that lending to homeowner associations for common area improvements is a very profitable part of its business, is clearly against the bill. The head of that division, Craig Huntington, the treasurer on the CAI Board of Directors, stated that the ability to foreclose on a homeowner association home is critical, because its loans are secured by that member's home.

Another strong opponent of the bill is Curtis Ekmark. He is the lawyer who had Marie Brown evicted from her home because she did not pay his $27,000 lawyer's fees. He is also the lawyer in another bush trimming dispute with an owner for which he wanted $7,000 in fees. The victim Mr. Glassel, snapped and killed two association board members.

California is in worse shape because the CAI lawyers who wrote the legislation ( the Davis Stirling Act ) made sure that a home in an association could be foreclosed on without going through a court proceeding. (Arizona does not have non-judicial foreclosure.)

This is very lucrative for those California lawyers who handle homeowner associations and the politicians whose offices they finance. Even if a home is never foreclosed on, the lawyer gets his very generous fees because many homeowners are intimidated by the threat of foreclosure.

In Texas, when George Bush was governor, he passed HB2152 . The bill passed by a voice vote in the waning seconds of a legislative session and allowed non-judicial foreclosure in homeowner associations. Foreclosures mushroomed into the thousands as a result. CAI lawyer, Michael Gainer, wrote the bill. William Gammon, another CAI lobbyist and well known to lawmakers and judges, has filed 1562 foreclosures through 2001. Click here to view their foreclosures

Behind all this is out and out greed. But it is worse than simple greed, because it has been enshrined into a system of laws that strangle a person's home like an octopus. Greed has been systematized, made part of the legal,economic and political system, enforced by the mighty power of the state. And it is the homeowner association lawyers and the politicians and judges they finance who have done this.

Like a swarm of locusts, they descend on legislatures around the country, using every trick in the book to cajole, bribe, deceive legislators into passing laws that profoundly touch the very essence of a society - its homes. Americans, blindly and blithely are being trapped into massive regulatory schemes, that some day can, and do, come to haunt them.

That an American can heartlessly cause a fellow citizen to become homeless, is, in the abstract, unthinkable. But happen it does, and it happens often.

What Ken Lay and others at Enron did to thousands of hard working fellow citizens, shocks the very conscience of the nation. What homeowner association lawyers are doing to fellow Americans is no different. Because homeowner associations are so diffuse throughout the country - an estimated 50 million Americans now live in them - the cumulative impact is not as easy to see as that at Enron.

But the cumulative impact is, in fact, immense. Every day at AHRC, stories flood in of one abuse or another. These lawyers and their lawmakers are the Ken Lays of homeowner associations.

Of equal significance is the almost total silence of government officials. In state after state, attorney generals refuse to do anything. In California, attorney general Lockyer, repeatedly states that he can do nothing for "budgetary reasons" In many cases, government officials are virtually in the pay of these powerful interests.

So enronitis is alive and well in the land. But the daily corrosion of one of the fundamental institutions of a nation - the home - can only end with the same result as happened to Enron - its total collapse.

History has shown that greed is one of the major causes of any nation's decline. How much longer do we have?


© AHRC News Services 2003.
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