What’s happening?  A mortgage company has been telling lenders that, in order to meet FHA and VA lending requirements, Colorado community associations must waive their priority assessment lien rights (often called “super lien” rights) in order for units in their communities to obtain federally-insured mortgages.

Altitude Community Law does not believe there is any basis for this statement in current Federal regulations.

What is the industry doing to protect super lien rights?  Community Association Institute’s (CAI) Government and Public Affairs Committee, which has been working closely with the FHA and VA on their community association lending regulations, has reviewed the FHA’s regulations  (HUD Handbook 4150.1, Chapter 11).  CAI’s Vice President of Government and Public Affairs, Andrew Fortin, issued a statement Tuesday saying the mortgage company’s position is not, in fact, required by federal regulations, and appears to be simply a pretext for abrogating Colorado’s superlien rights.  Read more at  Colorado Lender Plays Fast with Priority Lien Requirements.

Colorado’s CAI Legislative Action Committee will be working with CAI’s Government and Public Affairs Committee to bring this issue to the attention of lawmakers and other regulators.  In addition, Loura Sanchez has been very active in advocating for the community association industry on FHA regulatory issues and was part of the CAI team that met recently with the FHA to discuss its new regulations.  Loura will continue to stay engaged on this issue and bring you updates on the latest developments.

What should your association do if your community is asked to waive its super lien rights? 

  • Contact your primary attorney at Altitude Community Law before signing anything
  • Demand that the lender provide a citation to any legal or regulatory requirement that supports it’s claim of a waiver of super lien rights
  • Report the claim to CAI’s Government Affairs Department via e-mail at [email protected] with “Colorado Priority Lien” in the subject line

We’ll keep you posted as this issue evolves.

4 responses to “IMPORTANT: Stay Alert to Protect Your Association’s Super Lien Rights in Colorado
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