THE ADAC "ORGANIC" COLLECTION PROGRAM - a 2nd Service:

ADAC offers the ADAC Organic Collection Program to Property Managers, Associations and Attorneys to optimize collections in this difficult and turbulent time in the U.S. and Canadian economies. ADAC offers the Information Technology (Title Company type) "paper-push" documents necessary to get the Collection job done.

While ADAC offers Delinquent Association Dues Collection Services as a primary function, ADAC also offers a 2nd Service, which is designed for continuous improvement of Association Collection response time, and over time reduces Delinquent Association Dues Delinquency Ratios, to comply with Fannie Mae, Freddie Mac, and HUD requirements of not over 15% Association Delinquency Ratio over 30 days.

This Organic Collection Program starts with a computer-generated $5.00 'Reminder' (after the 1st month, charged to the Delinquent) that Association Dues are due when invoiced, and are 'late' at 10, or 15, or 20, or such number of days as are determined by the Association Board of Directors. The Foreclosure Process pursuant to Statute moves at a snail's pace, so it is important to get a saddle on the snail, and keep the Collection process moving without exception. If a Delinquent Association Member asks that the collection process be interrupted, best practice is to offer a Register of Deeds Recordable Installment Purchase Document from the Association back to the Delinquent Owner of the Sheriff's Deed. That way the snail's pace can continue, the Delinquent Owner has absolute assurance that with continued payments as agreed, the Delinquent Owner will again own the Unit, but no "Statutory Days" time is lost and the Association Dues Balance gets paid. In case of non-payment, the Association timely obtains possession of the Unit. In the event of catastrophic economic events affecting the Delinquent Unit Owner, e.g., death or job-loss, ultimately a Unit Sale will occur, either voluntary by the Delinquent Unit Owner, or by Judicial Sale by the Association or Mortgage Bank.

The 'Reminder' Letter notes that neighbors and other Association members cannot pay the common area real estate taxes, insurance, lawn mowing, and operational maintenance expenses, as well as now Federally - mandated Reserve requirements, if Association Dues are not timely paid, and neighbors who do pay are unenthusiastic about those members who drain Association economic resources and do not pay. Note that the U.S. Statutory time-table is that Dues are payable upon invoice, and 30 or 60 days later, the Dues are 30 or 60 days Delinquent out of the 180 day partially protected time period. If it takes approximately 120 to 150 days to obtain a Sheriff's Deed, it is not possible to complete the Sheriff's Deed process within the partially protected 180 time period if Association Board failure to recognize that Dues are due when invoiced does not result in timely collection procedures, which can be one-by-one collection of identified late balances, or the Organic ADAC Collection Program including all Association members who historically do not pay promptly. Economic times have changed, and it is important to re-calibrate Dues receivable collections, to not let Board failure to act result in unnecessary delinquencies, to not impose Federal Mortgage repurchase ratio restriction on Unit Owners who pay their Dues timely, to not leave those who timely pay to seek only cash purchasers for their units.

It is most important for Association Officers, Board Members, and Property Managers to recognize that in some circumstances Delinquencies will never be collected. There is an enduring myth that those who owe will pay. The "Obligation" elicits thoughts of payment. The reality is that payment depends on cash, or availability of cash, to the Delinquent. If the Delinquent has no cash, no payment will occur. Board failure to address non-payment, leads to uncollectable Dues Receivable. It is time to re-calibrate, and recognize that only speed works to the advantage of collection. Trillions of dollars of Judgments and Financial Obligations are unpaid. Only prompt Board Action corrects Delinquency.

An important recognition is that each Delinquent Unit needs to get back into Dues Paying status ADAC will almost always collect Delinquencies within 70 day of zero balance, and on a contingent basis.

But beyond 70 day balances where the Delinquency in Statutory concept becomes an antique Delinquency Balance, ADAC will still contingently work with the Association to be certain a Foreclosure happens, by either the Association or by the Senior Lien-holder (e.g., Mortgage Bank). If the Bank Senior Lien forecloses over the Association Junior Lien, the Association Delinquency is lost (assuming no equity in the Delinquent Unit, an issue always considered by ADAC). If the Association fronts the average $425 of Legal News insertion money for +70 day Delinquency ($250 average in Missouri), ADAC will proceed with the Association "antique claim" foreclosure (Plus $100 for the Michigan Foreclosure Prevention Law now required Legal News Insertion). That $425 is 1st repayment money from Delinquent proceeds money paid, along with Delinquent Dues, for the Association. If neither the Mortgage Bank nor Association foreclose, the Delinquent Unit does not get back into monthly Dues paying status. ADAC returns 70+ day files/cases to the Association if:

• the ADAC letters and Lien, and
• Mortgage Bank contacts (the ADAC offer to foreclose for the Mortgage Bank by Assigning the Association Sheriff's Deed to the Bank), and
• payment negotiations with the Delinquent, and
• Association decline of $425 Legal News Insertion out-of-pocket cost 'front money', and decline to rent the repossessed Unit for the Association,

do not result in payment to the Association. In summary, ADAC is always moving the file forward at computer speed, or in the event no positive outcome can occur due to unusual (but increasingly prevalent) circumstances, ADAC timely returns the file to the Association. If 6 months of Receivable Delinquency is lost, which may occur, the key is to stop the bleeding, to limit the loss to 6 months if possible, and move the Unit back into monthly Dues paying status. That's what ADAC does!