By: Luke S Carlson

For decades, homeowners associations (HOAs) were sold as a safety net—entities that would preserve property value, ensure neighborhood cohesion, and protect the aesthetic of American suburbia. But in 2024, that promise is cracking.

Across the United States, homeowners are finding themselves in bitter disputes not with neighbors or the market—but with their own associations. From unfair fines to blocked home sales due to litigation or poor reserves, the very organizations meant to protect homeowners are now becoming their greatest obstacle.

The Rise of the Mortgage Blacklist

One of the most alarming developments in this space is the emergence of the so-called mortgage “blacklist.” These are communities flagged by lenders as too risky to finance.

Why? The reasons vary:

• Active litigation involving the HOA
• Insufficient reserves or deferred maintenance
• Structural issues or failed inspections
• Unstable insurance coverage

When flagged, these properties become toxic in the lending world. Traditional buyers disappear, and homeowners are left with unsellable properties.

How Did We Get Here?

Much of the issue stems from a lack of oversight. HOAs operate with significant autonomy. Many boards are made up of volunteers with no formal training, little financial acumen, and varying degrees of bias or personal agendas.

When these boards are left unchecked, the result is predictable: questionable contracts, underfunded accounts, rule-making by fiat, and poor risk management. And it’s homeowners who pay the price.

Property Rights in Jeopardy

What makes this issue especially urgent is that it’s fundamentally about rights. The right to sell your home. The right to dispute unfair treatment. The right to due process when assessed or fined.

As associations grow in power, those rights often shrink—not through formal legal change, but through a lack of homeowner education and the intimidation many feel when confronting their HOA.

A Legal Counterbalance

There are legal options available. Homeowners can:

• Demand access to records and financial disclosures
• Challenge violations of their governing documents
• Petition to recall board members or amend bylaws
• Enforce your rights for breaches of fiduciary duty, abuse of power, and board malfeasance

But these options only work if people know they exist—and act on them early.

Conclusion

America doesn’t just face a housing affordability problem. It faces a housing governance problem. The rules that control how communities are run have become tangled, and many homeowners are suffering for it.

It’s time to bring more attention, more legal clarity, and more accountability to the HOA system. Because no one should lose their equity, mobility, or peace of mind to a board that was never meant to control them.

Disclaimer: The information provided is intended for general informational purposes only and should not be construed as legal or financial advice. Readers are encouraged to seek professional guidance regarding their individual circumstances.

Published by Stephanie M.