Reverse Foreclosures – Are Associations the Victims Here?
Real Estate

Reverse Foreclosures – Are Associations the Victims Here?

According to the sentinel of the sun As of August 11, 2010, homeowners associations are fighting foreclosures more aggressively and repossessing units through a process called “reverse foreclosure.”

Basically, the association forecloses on the property and during the process asks the court to assign a certificate of title to the bank. This triggers the payment of overdue installments of up to one year.

Another bill that came into force on July 1 authorizes the bank to demand payment from the tenant. If you don’t pay, the tenant is evicted by the association.

If the owner is 90 days or more delinquent, they will no longer have access to common areas such as the gym, pools, and clubhouses. This will also apply to the tenants of him. Finally, HOAs can prevent delinquent homeowners from taking advantage of them, however, HOAs now appear to be the ones abusing these new rights and spreading misinformation.

One law firm, now specializing in this action on behalf of associations, blames the need for such a legal strategy on “blatant lenders’ gridlock.” However, Alex Sanchez, president of the Florida Bankers Association, is quoted as saying that it is not the stalling of the banks that is causing the delay, but the banks trying to make deals with the sellers.

In my experience working in short sales, I find that the most difficult parts to deal with are the Associations themselves. We don’t find banks getting stuck just because they are condos or because they will be responsible for monthly fees. This argument makes no sense because if a bank has to repossess a property, it is limited to only 12 months past due, so there is no point in stopping. They can go ahead and list the property with an REO agent for a quick sale, limiting your wait time.

Associations have no choice but to agree to the 12 month delinquency, however when it comes to short sales they want every penny owed, which most of the time is more than 12 months when the bank has decided to deny a loan modification or accept a short sale offer.

In addition to back fees, association attorneys add outrageous fees for their services once the association has delivered them to you. Right now I am trying to work on a short sale where the past due debt has increased to $16,500. The apartment has mold and plumbing issues. The bank knows that if they foreclose they would only have to pay a fraction of this amount, but they have been willing to pay up to $14,000. The association, however, is not willing to discount the amount by even one dollar. Many real estate agents and buyers are not interested in listing or buying short sales that are in HOAs as a result, leading to more bank-owned properties, driving down values ​​further.

This is not the only example. I have many cases where the association has simply refused to discount the arrears in order to short sale, and their “associate attorneys” add hefty fees and are using the new law to rent the units. The rents go directly into their pockets and when we have obtained certificates of legal impediment they have not applied any of the rent payments to the balance!

Of course, it is more mediatic to make the banks the bad guys and the associations the victims, but it seems that there is a lot of corruption, abuse of the system? unfair practices. HOA practices should be questioned, especially the association’s relationships with law firms.

Leave a Reply

Your email address will not be published. Required fields are marked *