Final Crowdfunding Rules Not Likely Until Late 2014

Seal of the U.S. Securities and Exchange Commi...
Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

Final crowdfunding rules are not likely to be in place until late 2014 because the Financial Industry Regulatory Authority and the Securities and Exchange Commission need to take more action, according to a blog on corporate and securities regulation. blog said today that Finra still needs to create a regulatory system for funding portals and the SEC is still developing rules.

“As a result, the ability to do exempt crowdfunding offerings remains limited, except that many are anticipating the ability to do more accredited investor-only crowdfunding offerings once general solicitation is permitted under Rule 506 after the September 23, 2013, effective date of those JOBS Act mandated rule changes,” the authors noted. added the SEC’s proposed amendments to Regulation D and Form D to have investor safeguards when the general solicitation ban is lifted is drawing fire as not being faithful to the JOBS act’s goal of promoting capital formation.

The SEC’s crowdfunding rules will set the standards for exempt crowdfunding offerings to non-accredited investors, subject to a $1 million cap over a rolling 12-month period and dollar limits on an investor’s financial position. is an educational service that provides guidance on legal issues involving corporate and securities regulation and corporate governance practices.

Source: – Ted Knutson


Direct Public Offerings & Crowdfunding

A photo of the Bulgarian First Investment Bank...
A photo of the Bulgarian First Investment Bank from Sofia, 2006. (Photo credit: Wikipedia)

Obviously this is not our standard review style post, we believe that in order to keep ahead of the crowdfunding trend we must devote a section of our site to Direct Public Offerings (DPOs). Going forward we will be researching and reaching out to firms that provide services allowing small companies to raise capital form the public without the expense of a Wall St. investment bank.
Over the last 25 years Direct Public Offerings have ebbed and flowed in both quantity of offerings and success with which those offerings have been received. Our belief is that with the growth of social media, crowdfunding coming mainstream and the passing of the JOBs Act, Direct Public Offerings will finally get the recognition they deserve as a cost effective and democratic means of raising capital for small business.
Over the next few weeks we will be providing reviews of various DPO service providers. The combination of Direct Public Offerings and crowdfunding will in our opinion eventually be the “winner” from the JOBs Act by combining the established secondary markets with the cost effective benefits of an equity crowdfunding style platform hosted directly on the issuing companies website.


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Kara Stein Sworn in As SEC Commissioner

Washington, DC – August 9, 2013 SEC Chair Mary Jo White swore in Kara M. Stein today as the newest SEC Commissioner. The US Senate approve Ms. Stein’s appointment to the Securities and Exchange Commission on August 1, 2013.

SEC Commissioner Kara Stein (center).

SEC Commissioner Kara Stein (center).

Ms. Stein previously served as Legal Counsel and Senior Policy Advisor to Sen. Jack Reed.  From 2009 to 2013, she was Staff Director of the Senate Banking, Housing, and Urban Affairs Committee’s Subcommittee on Securities, Insurance, and Investment.  Ms. Stein was Legal Counsel and Senior Policy Advisor to Sen. Reed from 2007 to 2009 and served as both the Majority and Minority Staff Director on the Banking Committee’s Subcommittee on Housing and Transportation from 2001 to 2006.  She served as Legal Counsel to Sen. Reed from 1999 to 2000, following two years as a Legislative Assistant to Sen. Chris Dodd.

“I am very pleased to welcome Kara Stein to the SEC and greatly appreciate her continued commitment to public service,” said Chair White.  “Kara joins an agency comprised of some of the most dedicated professionals in public service today.  She will be a critical partner in our ongoing effort to protect investors and oversee the most dynamic and complex markets in the world, and I am looking forward to working with her.”

Before working on Capitol Hill, Ms. Stein was an associate at the law firm of Wilmer, Cutler & Pickering and an assistant professor with the University of Dayton School of Law.  She was an Advocacy Fellow with the Georgetown University Law Center from 1993 to 1995, and was a Skadden Fellow from 1991 to 1993, and a visiting lecturer with the University of Nigeria Faculty of Law from 1989 to 1990.


The Aria Group, Inc. Launches Real Estate Investment Service

ImageAvailable to Passive Investors Nationwide

Newport Beach, California (PRWEB) August 13, 2013— THE ARIA GROUP has served Real Estate Investor clients for many years and the addition of the CROWDpad LLC Real Estate Investment Program is a natural progression.  Now, in addition to offering superior Real Estate legal, transaction and compliance services, THE ARIA GROUP will also provide clients with Passive Real Estate Investment Opportunities nationwide.


“Our vision of making real estate investing simple, providing investors with more transparent access to passive investments, and reducing check sizes way below

$50k or $100k for a single investment has become a reality.”-Paulina Ghaneian, CEO, The Aria Group LLC.


Passive real estate investing can be incredibly quick. Investors perform due diligence, sign legal paperwork online and transfer funds almost immediately. THE ARIA GROUP has properties secured with existing tenants where there is existing cash-flow. Investors begin receiving dividends month one.

THE ARIA GROUP is the premier full-service, mortgage investigation and discovery firm in the United   States specializing exclusively in mortgage origination, securitization and assignment compliance and offering a full suite of services to support Realtors, Law Firms and Real Estate Investors. Our professionals have years of experience in finance and mortgage banking, consisting of subject matter experts, attorneys with considerable compliance experience, former regulators and former S.E.C. compliance executives who have created comprehensive auditing, discovery and document systems designed to yield the quickest  and most favorable results to our Investor clients and the Realtors and Law Firms that represent them.

In the past, HOA foreclosures were relatively rare since the property being foreclosed upon by the HOA usually had equity and an owner would cure the default of the lien prior to letting the home go to foreclosure by the HOA.

Since the housing crisis began, HOAs have found themselves in a difficult situation in regards to foreclosures because most of the homes where the owner let the HOA foreclose didn’t have any equity in them because the owner owed more money on the home than it was worth. So if the HOA foreclosed they would be the owner (in most cases) of a property subject to a first deed of trust that owed more money than the HOA could sell the property for leaving the HOA now upside down in the property with no way to recoup their losses.

However, THE ARIA GROUP has recently found that purchasing HOA past due amounts (arrearages) directly from the Associations, even if there is more money owed on the property than it is worth is a good investment since the lenders who are owed the money on the first do not value time. Therefore, ARIA investors, or potential owner/occupants, can buy occupancy or control of a property and either rent the property out or live in the property while the lender goes through the extremely slow process of a bank foreclosure.

Many times, ARIA will work with lenders to come to some sort of an agreement for a purchase and even if they cannot come to an agreement the investor recoups their money plus a large profit waiting for the bank to finish their foreclosure process. THE ARIA GROUP has been successful in delaying foreclosure for clients for years in most cases.

Remember, ARIA is not obligated to pay the loan that is owed against the property nor is there any negative ramifications to our investor’s credit.

Can HOA Foreclose Your Condo?

Homeowner associations, or HOAs, have the legal right to foreclose on a condominium unit in California. These associations are generally composed of a board of members that oversee all the matters affecting the condominiums and surrounding property. An HOA can only foreclose, or use legal proceedings and regulations, to take back ownership of the unit if the unit owner is delinquent on any fees or assessments the association is allowed to charge according to the governing documents the HOA is using.

General Notice to Owners

All HOAs in California are required to provide the owners of each unit in the condominium documentation, annually, of operating, maintenance and repair expenses, according to section 1365 of the California code. These reports must also include a summary of the procedures the association uses when collecting past due assessments or fees. If the HOA does use foreclosure proceedings in cases of overdue payments, the policies the association uses for informing the condominium owner of the impending legal action and a general outline of the foreclosure process has to be noted within these papers.

Fees and Assessments

HOAs are allowed to collect maintenance fees and special assessments for services used to maintain the condominium buildings and common elements, or areas that all unit owners are allowed to use, such as a recreation center. Per 1366(a) of the California code, these assessments cannot be changed after the beginning of the fiscal year without the approval of at least 50 percent of the members of the condominium. The assessments cannot increase more than 20 percent each fiscal year. Assessments and fees are considered delinquent when more than 15 days past due under section 2924b of the California code, unless the written policies of the HOA allow for more time. Once the assessments are delinquent, the association can start foreclosure proceedings.


According to section 1367.4(b) of the California code, HOAs can use either judicial or non judicial foreclosure in California. Judicial foreclosure involves the associations taking the unit owner to court and obtaining a judgment of foreclosure, which can result in the public auction of the unit. Non judicial foreclosures are done without court action. The association must mail notice to the unit owner and follow all state laws. Once the period for the unit owner to object to the action has passed, which must be a minimum of three months from the date of the notice, the HOA can sell the unit at auction.

Requirements and Limitations

HOAs can only initiate foreclosure proceedings if the past-due assessments total at least $1,800 before any interest, late penalties or attorney fees are included, or if the fees are more than 12 months overdue under 1367.4 (b) of the California code. The association cannot levy any assessment that is more than the amount necessary for the service to which the fee applies. Thirty days prior to starting the foreclosure process, the HOA must send the unit owner an itemized statement of the past-due fees, the method of calculation used to determine the unit owners charges and an overview of the lien enforcement process by certified mail.

Rights of the Owner

The unit owner has the right to request and receive a meeting with the board of individuals who govern the association upon notice of the action to foreclose per section 1367.4(b)(1) of the California code. The unit owner can also dispute the assessments. This process is initiated when the owner sends a written letter to the HOA, indicating that he is disputing the amount being collected. If HOA will not lessen the amount of money owed after meeting, the unit owner can request that a third party review the matter, and the association is required to participate in this mediation under California law. The unit owner can also request that the HOA consider a repayment plan to satisfy outstanding assessments.

Does an HOA Foreclosure Deed Supersede a First Mortgage Deed?

A community establishes a homeowners association (HOA) to govern what can and can’t be done in the community. In addition, an HOA determines the rules for community use of commonly shared or owned property. If you have an HOA and fail to keep up with dues you owe to it, the HOA can foreclose on your property. When an HOA successfully forecloses your property, it becomes the new owner responsible for any mortgage payments.

HOA Dues

If you belong to a homeowners association, you have a duty to pay your HOA dues. In turn, homeowners associations have a duty to collect member dues. HOAs are accountable to all members of the community served by the HOA. Homeowners association dues go to pay for things like grounds upkeep and community pools. In certain cases, HOAs are also very quick to take action if even one payment is missed.

HOA Foreclosure

Where allowed, homeowners associations typically seek foreclosure through non-judicial means. California,  for example, allows HOAs to foreclosure non-judicially, or without the courts, for unpaid dues. However, California HOAs can’t foreclose until the debt for the dues reaches $1,800 or the debt is at least 12 months old. In most states, including California, when an HOA forecloses a property, it becomes the new property owner. Because the HOA is the legal property owner, it’s also responsible for any mortgage payments.

HOA Deeds

When a homeowners association successfully forecloses a property, it receives a deed that still contains all other liens. In order for an HOA to sell off a property it foreclosed, it would have to satisfy all senior liens on the deed. Senior liens on a deed include mortgages (first, second and so forth). HOAs often foreclose a property and try to sell it quickly, settling any deed liens in the process.

Foreclosures and Redemptions

Foreclosures by homeowners associations for small amounts of unpaid dues do occur. Also, mortgage lenders have been known to foreclose against an HOA that’s foreclosed and taken a property for unpaid dues. You can stop your HOA from foreclosing on your property for unpaid dues by paying them at any time. Lastly, certain states like California feature HOA foreclosure redemption periods. California’s HOA foreclosure redemption period for homeowners is 90 days.

The FHA Guidelines for HOA Liens

The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development, writes mortgage insurance policies on home loans in the United States, giving lenders protection in the case of homeowners defaulting on their loans. Lenders must meet FHA requirements to be eligible for the mortgage insurance program. They also must follow FHA policy on condominium title transfers that occur after a condo Homeowner Association (HOA) puts a lien on a property for non payment of HOA fees.

HUD Mortgage Letter

HUD set out new FHA guidelines for HOA liens in a June 2012 mortgage letter to lenders issuing FHA approved mortgages. The letter referred to changes in policy regarding title transfers on condo properties that have HOA lien. It was the first such policy change from HUD since 2002.

Borrower Responsibility

HOA fees are not items that are paid from an escrow account for FHA insured mortgages. The FHA considers payment of HOA fees the sole responsibility of the borrower.

Default Scenario

In case of borrower default and subsequent foreclosure proceedings on an FHA insured mortgage, the FHA requires lenders to name and serve the HOA as part of foreclosure proceedings to dismiss or reduce HUD’s liability for overdue HOA fees. The lender pays any outstanding HOA fees upon completion of a foreclosure sale. Lenders must protect HUD’s interests in the case of any condo HOA bringing foreclosure proceedings where a mortgage backed by FHA insurance is involved. HUD requires all HOA liens to be removed before it takes over title on foreclosed condos, effectively leaving the lender to either negotiate removal of fees or pay them.

Lender Fee Recovery

HUD repays lenders for HOA fees occurring between the foreclosure date and the date of title transfer to HUD, as well as interest and penalties run up by the former condo mortgage holder.

Effects on Condo Owners

For condo owners being foreclosed upon, the HOA has a legal right to attempt collection of unpaid fees from you. They may bring legal action or refer the matter to a collection agency. For buyers of foreclosed condos, the issue of unpaid HOA fees is settled prior to purchase. Buyers should investigate the financial state of the HOA before buying a condo.

If you would like more information about the CROWDpad LLC Real Estate Investment Program, please contact THE ARIA GROUP at 949-264-2022 or email at info@CROWDpad.coImage


Join us for massolution NYC 2013: Crowd Powered Business. The first-ever exclusively enterprise, buy-side industry conference.
Learn how major enterprises are designing and deploying crowd-based strategies to foster innovation, fuel growth, drive sales and connect and engage with customers
massolution NYC 2013 is divided into the following four themes:
INNOVATION: The Crowd As The Engine For Enterprise Innovation
GROWTH: How Crowd Is A Growth & Cost Game Change
SALES: How Crowdthinking & Crowdfunding Drive Sales & Open Markets
CUSTOMERS: Customer Powered Crowds: Co-Investors In The Future
Conference Details:

Exclusive to large enterprises, institutions and goverments
Intimate environment, single track sessions and limited to 150 attendees
Sessions delivered in 18 minute “Ted Style” presentations together with panel discussions and interviews
Senior level executives (C “Suite”, Heads of Strategy, Heads of Function, etc.)
Price includes breakfast, lunch & cocktail party
Why you should attend:

Understand how large companies and organizations are building crowd-based models to perform work, solve problems, innovate and connect and engage with customers
Learn how to design and deploy disruptive “crowd-based” business strategies
Discover what other enterprises are crowdsourcing and why enterprise crowdfunding is more than just “capital”
Hear experts talk about innovative business models, use cases, share insights and discuss practical implementation approaches
DAY 1: Wednesday, September 18th, 2013, 1:00PM-5:30PM & Cocktail Reception 6:00-8:00PM. FOR ENTERPRISE BUYERS ONLY

Inaugural Enterprise Crowdsourcing Special Interest Group Meeting. A forum to discuss and explore enterprise crowdsourcing strategies, implementations, providers and best practices. Marking the launch of an annual Crowdsourcing Interest Group (CIG) membership program to network, learn and practice enterprise crowdsourcing; followed by a VIP Evening cocktail reception. 25 tickets available.

Facilitated by massolution CEO Carl Esposti and David Alan Grier President of the IEEE Computer Society.

DAY 2: Thursday, September 19th, 2013; 8AM-5:30PM & Cocktail Reception 6:00-8:30PM. MAIN CONFERENCE & COCKTAIL PARTY

Full day conference including keynote, speakers, panels and on-stage interviews. Breakfast, lunch & cocktail reception. 100 tickets available.

Early Bird Special: Purchase by August 1st and recipient will receive the 2012CS Enterprise Crowdsourcing Industry Report or the 2013CF Crowdfunding Market Analysis Report (value $245)

Please contact us about sponsorship and speaking opportunities

Spike Lee’s Case For Crowdfunding

Spike Lee Makes His Case For Crowdfunding (via

“The idea that a film is not worthy because it can’t get financing is ludicrous!” Spike Lee said that to professional asshole, Simon Hobbs, during a recent CNBC interview.  The quote sums up Lee’s approach to movie making—art has to be made…

Continue reading “Spike Lee’s Case For Crowdfunding”