Written by Dennis Gassoway, as originally published in The Reverse Review.

Losing a lien position to HOAs? Think it couldn’t happen to your servicing operation? Think again. Many reverse mortgage seniors who belong to homeowners associations do not understand just how much power these groups have over them – until they miss a payment or otherwise run afoul of the board. Fall a single day behind in paying your monthly dues, for instance, and the association may slap you with a fine.

Fall 90 days behind and it may place a lien on your home and threaten to foreclose unless you pay up immediately. And because you often hand over the right of property trustee to the association when you agree to the bylaws, in some cases you don’t even get to go to court. This ability to foreclose by HOAs should be taken very seriously by reverse mortgage servicers to protect their first lien rights.

Your best defense, if you can afford it: Pay what the association says you owe, then argue. Most associations work on a “balance forward” accounting system, in which your payments go toward the outstanding balance. By delaying, you’ll just accumulate more late fees and risk potential foreclosure.