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Residents in a Kettering community are outraged after their homeowners association board of directors invested and lost nearly $14,000 of residents' money in the stock market during the last two years, against association bylaws.

Residents say they learned of the investment through word-of-mouth as recently as July and say they want the board to take the money from homeowner fees out of an uninsured account and find a way to replace the lost money, or else they will consider suing.

According to the community's HOA bylaws, the money should be put into an insured account to pay for maintenance of the common areas.

A September letter from HOA property manager Nicki Williams to homeowner Jennifer Lowery-Bell states the board opened an account with Ameriprise and made the initial one-time investment in September 2007 of more than $80,000. As of July 2009, less than $77,000 was in the account, posting a more than $14,000 loss as of July 31.

Lowery-Bell said she learned about the investment in late July from board member David Bosworth, a Campus Way South homeowner who joined the board in September 2007. Bell then wrote two letters to Williams in August and September 2009 inquiring how the losses will be refunded and if any other investments have been made.

"They said they would assess the situation and get back with us, and it was never done," Lowery-Bell said of the board's comment at a September meeting about the situation.

The 321 homes in the community each pay $76 per month in homeowner fees, a total of $292,752 per year, said Lowery-Bell, who also is founder and coordinator of Campus Way South Homeowners Neighborhood Watch Program.

Williams, who collects the HOA fees and provides financial management to the board of directors, said she believes the board is acting in the best interest of the homeowners and that the board decided to invest the money in the Ameriprise account because interest rates at the time were low.

"$14,000 isn't a loss unless you want to retrieve your money today. I can't say it's right or wrong [to invest the money]," Williams said. "There was never any real thought that what they were doing was wrong."

William McCreary, president of the Campus Way South Home Owners Association Board of Directors, did not return calls for comment by press time.

The residents' questions about the legitimacy of the stock market investment were confirmed after Campus Way South treasurer Ezra Moore asked the Baltimore-based law firm Kaplan and Kaplan, P.A., to review the investment.

In a response letter in October to Moore, the firm states the board violated the association's bylaws by putting the money in an uninsured account rather than one insured by the Federal Deposit Insurance Corporation. The firm recommended the association's board of directors move the money invested into an insured account.

Moore could not be reached for comment.

Lowery-Bell said she wants the board to first send a letter to all homeowners informing them about the situation and repay the money, either out of their own pockets or by reducing HOA fees.

Lowery-Bell said she considers what the association's board of directors has done to be "gambling."

"If the goal is to try to make more money, that's risky. Use your own personal money," she said. "If you want to improve Campus Way South, get at least an ‘OK' from two-thirds of the [households] — it's not their money, it's our money."

David Bosworth, a 20-year resident of Campus Way South, is not pleased with the board's decision.

"It's like taking grandma's money to the racetrack and losing it. I would say it's very tricky ground in terms of a board to behave," Bosworth said.

Regina Rodgers, 56, said she is angered by the board's investment decision.

"They put that money in in 2007 and here it is, 2009," she said. "They truly did something wrong."

Barbara Filmore, a resident of Campus Way South for 20 years who declined to give her age, said she is disappointed the board hasn't formally disclosed the loss to homeowners.

"In this day and time, that's too much money to lose," Filmore said.

E-mail Liz Skalski at eskalski@gazette.net.