By The Briefcase Team | Tuesday, August 7, 2026 | 5 min read

Good morning. If you have ever received a letter from your Homeowners Association that begins with "Dear Homeowner" and ends with a lien, we have some news.

The HOAs are also having a rough time.

Not "rough" the way you, the individual homeowner, might define rough. Not "the roof is leaking" rough. Not "I found something ambiguous in the walls" rough. HOAs are experiencing a specific kind of financial pain: the kind that ends with them foreclosing on their own residents to make payroll. Which is, as far as we can tell, a business model previously exclusive to the mafia.

The New York Post reported yesterday, citing a fresh Wall Street Journal investigation and Attom data, that HOA foreclosures are up nearly 40% over the past two years. Filings hit 6,376 properties in Q1 alone. Per Benutech, there were more than 285,000 HOA lien filings in 2025, an 8.8% increase over 2024.

This is what happens when your neighborhood governance structure decides it's a hedge fund.

Let us start with Magnolia Cove, an 80-home community near Charlotte, North Carolina. Last year, monthly HOA fees at Magnolia Cove were $350. This year, they are $1,250. Also there is a $10,000 special assessment. If you are keeping score at home, that is a 257% increase in monthly dues, plus a one-time charge equivalent to eight months of the new dues, in twelve months, in a community whose distinguishing feature appears to be its name.

We tried to imagine what services could possibly justify a 3.5x fee hike in one year. We got as far as "concierge lawn service performed by a Michelin-starred chef" before running out of ideas. Magnolia Cove homeowners were presumably told the increase covers "reserve requirements" and "insurance," which is what HOAs always say the money is for right up until you ask to see the reserves.

Then there is the Long Island HOA whose annual insurance premium went from $60,000 to $360,000 in a single renewal. Six times. Same building. Same insurance market that apparently discovered, overnight, that the building was located on Long Island, which, for those unfamiliar with basic geography, has been there since the last ice age.

There is also Atview Con 1 in Middle Island, New York, a 202-unit condo where 15 owners are behind on their $595 monthly dues, creating a $8,900 monthly deficit. Of those 15, 10 are already in foreclosure. The board's response has been to raise assessments on the remaining owners and defer maintenance, which is the HOA equivalent of bailing out a leaking boat by drilling additional holes and asking the surviving passengers to swim harder.

Here is the mechanic. In many states, HOAs have "super priority" on unpaid dues, a legal doctrine that lets a homeowners' association jump in front of your first-mortgage lender in the foreclosure line for a few months of missed $595 dues. A bank has to wait its turn. Your HOA does not.

This is why HOA foreclosures are outpacing mortgage foreclosures. Not because HOAs are owed more. Because they get to go first, and because they, unlike banks, do not have public affairs departments, quarterly earnings calls, or Congressional hearings to worry about.

Per the Wall Street Journal investigation, the numbers are being driven by three things at once:

The Post buried the sharpest part of the WSJ investigation halfway down. When an HOA has delinquent accounts, it hires a specialized collection firm. These firms are frequently the same firms or affiliates of the firms that advise the HOA board on governance. The lawyers who told the board "yes, you can foreclose on the Hendersons over $2,400 in dues" are the same lawyers who then collect a percentage of what they recover from the Hendersons.

This is what economists politely call a "principal-agent problem." It is what everyone else calls "marking your own homework." The board has a lawyer. The lawyer has a collection arm. The collection arm gets paid more when it forecloses than when it settles. The board's decision on whether to foreclose is advised by, well, that same lawyer.

We would like to know how many of these firms disclose the arrangement at the closing table. The number we suspect is: none.

If you needed a final sign that HOA collection has become an actual asset class, here it is:

Floyd Mayweather Jr. was recently threatened with foreclosure by his HOA in Summerlin, the Las Vegas suburb, over $25,000 in unpaid dues and legal fees.

Floyd Mayweather is a boxer with a career purse north of $1 billion, a nickname ("Money") literally derived from his ability to accumulate the stuff, and an Instagram grid that consists entirely of him standing next to piles of cash. He was reportedly ninety days from losing his Summerlin home because someone at the HOA's law firm mailed a lien to the wrong address and the boxer's accountant did not open it.

Mayweather's attorney called it an "accounting error" resolved after a "restructuring of the boxer's financial management team," which is one of the great Monday morning euphemisms of 2026. Somewhere in Las Vegas, a former financial manager is updating their LinkedIn to say "seeking new opportunities."

If the HOA collection machinery can get within reach of foreclosing on Floyd Mayweather, it can, we promise, get to your Aunt Linda in Boca.

We are not against HOAs. In theory, a well-run HOA is a modest, useful thing. It mows the common lawn, chases the raccoons out of the pool skimmer, and prevents your neighbor from painting his fence in what one Nellie Gail resident recently described in court filings as "eight distinct shades of beige simultaneously."

In practice, the HOA industry has become a quasi-governmental taxing authority with less accountability than a municipal government, wielding a legal super-priority most creditors would kill for, feeding a litigation ecosystem that profits from foreclosure. The residents on the other end: roughly 75 million Americans, or one in four housing units. The largest form of private government in American life is currently solving a small liquidity crisis by taking people's houses.

To be fair, some boards are genuinely stuck. Insurance markets really have gone haywire. Reserve requirements really are stricter now, with good reason. A board that fails to raise dues to fund reserves faces personal liability if a balcony detaches. Nobody wants to be that board.

But there is a difference between "the board must raise dues to fund a legally required reserve" and "the board must foreclose on ten of 202 units and defer maintenance to cover the difference." That second thing is the death spiral. Once foreclosures pass a certain share of units, financing dries up (Fannie's Non-Warrantable list), values drop, more units default. It ends the way you'd expect.

The actionable question for anyone reading this who sits on a board (and given our subscriber list, several of you do) is:

The next twelve months will produce a lot of HOA-versus-homeowner litigation, in a lot of courts. Some of it will get televised because it will involve people like Mayweather, or the Magnolia Cove homeowners staring at $1,250 a month, or the ten Middle Island families being foreclosed on to cover a shortfall caused largely by their neighbors moving out.

HOA reform is one of the last housing issues that unites the political left (consumer protection, elder abuse) and the political right (property rights, private tyranny). Nine states already limit or ban HOA foreclosure over de minimis amounts. Expect that list to grow.

In the meantime, if your HOA sends you a letter with "Notice of Delinquency" in bold, read it the same day. And if you sit on an HOA board, we would gently suggest reading the last six months of your board minutes with fresh eyes. Somewhere in there is a decision that is going to end up in front of a judge, and possibly a WSJ reporter.