FORECLOSURES and HOMEOWNER ASSOCIATIONS
I recently was representing a buyer for a condominium .
because of the short sale situation , there were over $7000 in unpaid association dues .
there has been a new law passed in Florida which is to aid the
HOA's in trying to collect more money from absentee owner's
and collect money directly from tenant's too . One of the more
important points is that usually after a foreclosure when the bank
becomes the owner , the bank was protected as to how much they
would owe the association . The cap has been riaised from 6 months dues to 12 months dues OR one percent of the mortgage balance
being foreclosed on .
So for instance if a homeowner pays
3200 in maintainance fees per year and they have not paid
in two years they would owe 6400 in maintenaince fees plus late charges lawyers fees etc . if you sell your home on a normal sale
the HOA would have to be paid in full (or settled with ) .
If a Bank gets the home in foreclosure or a Deed in Lieu of Foreclosure , the bank is only liable for one year of assessments
BUT if they foreclosed on a 100000 mortgage loan
the cap would be 1 % or equal $1000 for the association .
This is another example of the favorable treatment Banks are getting
Unfortunately , your Condo Association representatives are just as
mislead on their views and understanding of viable solutions .
BUYERS are being charged non refundable upfront fees of as much as $350 just to be able to find out from Attorneys representing associations how much is owed.
If policies were in place to be buyer friendly perhaps many of these
properties would not go to foreclosure . Perhaps more units would
be a revenue producing units for the association and the rest of the
homeowners. remember the shortfall of income must be a shared burden by the remaining paying residents.
talk to your association representatives about what policies are in place in order to gain maximum revenue for the association .
The quick highering of a condo attorney (and their fees) may become more of a burden when a condo goes into foreclosure and
outstanding balances are reduced by the (new) Law
Posted by Mortgage Larry
at 9:52 AM EDT
Updated: Wednesday, 15 September 2010 10:15 AM EDT