'Foreclosures Are Profitable': Controversial Colorado HOA Has More Than $1 Million In The Bank

(CBS4) - The Master Homeowners Association For Green Valley Ranch, which initiated more HOA foreclosures in 2021 than any other Denver HOA, has taken in more than $600,000 in one year from fines levied against its homeowners and the HOA has more than $1 million dollars on hand in checking accounts, CDs, saving accounts and cash, and the HOA lists its total assets at more than $2.2 million dollars, according to a CBS4 review of its financial reports covering the last four years.

"Foreclosures are profitable," said Eric Gravenson, who lives in Green Valley Ranch and was previously on the HOA Board.

"When you have a profit and loss sheet that shows significant profits from foreclosures, that seems inconsistent with the mission of an HOA," said Gravenson.

"I think additional questions need to be asked of the HOA," added Gravenson.

CBS4 repeatedly emailed current HOA board members, but none responded. During an in-person visit to the home of board member and treasurer Alvina Ferguson, she declined to discuss the HOA's finances, but said, "That's all fake. It is all fake." She declined to participate in any further conversation.

Between 2021 and 2022, the Green Valley Ranch HOA filed foreclosures on nearly 60 homes.

-In 2018, the HOA, which oversees about 4,600 homes, took in $461,000 in covenant violations, fines and fees according to its financial statements. It took in another $12,000 in lien fees and netted $247, 158 for the year according to its financial statement.
-In 2019, the HOA took in $613,422 in covenant violations, fines and fees according to its financial statement. It cleared $305, 883. in revenue after paying expenses.
-For 2020, the HOA listed $331, 650 in rule violation fines and in an unaudited financial statement, said it had $170, 193. in net income for the year
-For 2021, the HOA listed $303,900 in rule violation fines and listed $132,028. in net income for the year.

By the end of last month, the HOA reported having $1,090,074 in its checking accounts, saving accounts and CDs and the HOA listed total assets of $2,255,680.

"Two million dollars is a serious amount of money in the coffers of a non-profit," said Gravenson.

"They could be helping the people who are approaching the point where they are losing their homes," Gravenson said.

Gravenson was referring to people like Michael and Patricia Washington. Their Green Valley Ranch home is in foreclosure after they apparently failed to pay fines for broken blinds, weeds and an unsightly lawn in a timely manner. Washington's home is a rental property they have owned since 1996.

"It's messed up, put it like that," said Michael Washington during an interview with CBS4.

Records obtained during the CBS4 investigation show that Washington's troubles began in 2020 when they received notices from the HOA that the rental property had broken blinds that needed to be fixed.

When the Washingtons didn't take action quickly enough, the HOA levied a $200 fine. Although the Washingtons later fixed the broken blinds, which the HOA acknowledged in writing, the Washingtons apparently failed to pay the fines.

They were then cited by the HOA for having weeds. Again, when they failed to address the weeds quickly enough, the HOA again levied a $200 fine. The Washingtons corrected the problem according to correspondence from the HOA, but again apparently failed to pay the fines.

Lastly, the couple was cited for having an unhealthy lawn that needed to be watered and improved. Same story. When they failed to address the problem or respond to the HOA in a timely manner, a $200 fine was imposed.

The Washingtons ultimately fixed the bare spots on their lawn, but apparently failed to pay the fine.

Michael and Patricia Washington apparently believed addressing their properties' issues was sufficient. Unbeknownst to them, since they had not paid their fines, they were also being assessed late fees, lien fees, attorney fees and interest. It appears the HOA even garnished Patricia Washington's wages.

A court filing obtained by CBS4 indicates the HOA's lawyers got a judgment against the couple for $7,098.64 and their home is scheduled to be sold by the HOA at a sheriffs auction on June 2nd. The HOA board voted 5-0 to foreclose on the Washingtons.

"It's ridiculous, makes no sense," said Michael Washington,

Washington said the HOA's judgment against the couple has now increased to about $9,600 dollars.

"Just upsetting me, depressing me, it's crazy," said Washington.

He said the couple is trying to get help to avoid having the HOA foreclose on their property.

Gravenson, the former HOA board member told CBS4, "Is it right to lose your home over an oil stain in the driveway? I think most reasonable people would say no, that's not reasonable and not right. There's right and wrong and that's as wrong as it could be."

Gravenson, who said he too has been cited for issues with his GVR home, suggested the HOA should use some of the money it has amassed to help homeowners who are having trouble keeping their property up to the HOA's standards.

"It seems to me that should be the function of the HOA, to help the community, not to apply sanctions or punish homeowners for having a couple of slats in their blinds missing from their homes," said Gravenson.

He suggested the HOA should use its cash surplus to assist the Washingtons and other homeowners who may need help maintaining their properties.

Although the HOA board would not discuss its financial situation or the Washington's case, the board issued the following statement in late March:

"The South GVR Board is made up of volunteers legally required to uphold the covenants of our community. The South GVR HOA is one of the largest in Denver with over 4600 homes. The number of foreclosure filings is less than 1% which is similar to or below other HOAs in Colorado. The fact of a foreclosure filing does not mean someone loses their home. A majority of the cases are in active payment plans or closed without further legal action. Less than half of the filings reported are currently going through the Court process to determine next steps, which could also resolve in payment plans, not a judgment of foreclosure."

The HOA went on to state it sends written notifications to homeowners about their property deficiencies, allows additional time to resolve issues and allows fines to be reduced up to 90%. The HOA also said during the pandemic it voluntarily suspended its collection and foreclosure of liens.

"The Board has always and continues to remain open to resolution of these cases in an amicable manner," the statement read.

When Michael Washington saw the HOA's financial statements, he exclaimed, "Good Lord, they are getting rich over there."