The meltdown in the subprime mortgage market has caused a large number of Montgomery County homeowners associations to face unprecedented difficulties collecting residents’ dues while triggering an increase in fees for other members, according to experts.

Ira Rheingold, executive director of the District-based National Association of Consumer Advocates, said the trouble is that people use loans to buy homes far out of their affordability range.

“Now you have people whose mortgage is worth more than their property,” Rheingold told The Examiner. “You can’t sell the condo or house, so where does that lead? If you’re not going to pay your mortgage, you’re not going to pay your assessments.”

Homeowners associations have the legal authority to place liens on residents’ properties for payment failures or to take the guilty party to court, both of which are being done much more than ever before, according to Peter Drymalski, from the county’s Commission on Common Ownership Communities.

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But neither tactic works very well when there are no funds to go after, he added.

Vicki Satern-Vergagni, president of the board of directors of Glenway Gardens in Wheaton, said foreclosures are emerging as a huge problem for her 214-unit condominium community — as it is across Montgomery.

Often, families don’t adequately budget for both their mortgages and association dues. And some who go to credit counselors are told to pay the mortgage first if they can’t foot the bill for both, she said.

The worst part of the equation, according to Satern-Vergagni, is that residents diligent about paying fees have to make up the monetary difference.

Only about a dozen Glenway Garden families are failing to pay. But considering monthly dues are $400 to $600 — for the community’s utilities and maintenance for furnaces and air conditioners — other residents could pay close to $100 extra a month.

“We’re not a co-op, so residents don’t get a vote on who buys here,” she said. “But they’re the ones who suffer.”

Lawyer Kim O’Halloran-Cordray, who handles a number of collections cases in Montgomery County, said a big obstacle is that homeowners associations have no power under Maryland law to get their money back for essential services.

Unlike D.C. and other jurisdictions, the state doesn’t have a priority lien law, something Montgomery’s Common Ownership Commission and other groups are working to change.

“Homeowners associations are left to collect behind whoever else needs to be paid,” she said. “When the property goes to foreclosure, the association’s liens aren’t paid, and there’s no means to recover the money.”

dlevitz@dcexaminer.com