Payback time: Florida homeowners foreclosing on banks

[avaistheone1]

Source: CNN Money

Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they've repossessed.

When banks foreclose on a home they become responsible for paying fees to the homeowners association -- both any unpaid fees going back as far as 12 months and all expenses going forward.

In many cases, however, banks are failing to pay, leaving these associations short on cash, according to Miami-based attorney Ben Solomon.

But now, homeowners groups are putting liens on the properties until banks pay up and foreclosing on them if they don't.



Read more: http://money.cnn.com/2012/12/26/real_estate/bank-foreclosure/index.html?iid=s_mpm

[mrmpa]

1. Glad to hear this.............

Our Condo Association is very stupid. Recently we had two properties go into foreclosure, however our attorney did not put a lien on the properties, so when it got into court, we were not a creditor. We lost about $10,000 in unpaid fees. I know banks own 3 properties in our condominium property & I do not see us getting any fees from the bank.

I am forwarding the link to 2 board members who understand the real world.

[Angry Dragon]

2. should sue the attorney

[Starfury]

5. Is there a management company respresentative advising the board?

If your board has a management company to help with legal/maintenance/budgetary issues, they should have advised your board on when to consider placing a lien on the foreclosed properties. If they didn't do so, I'd seriously ask them why. And by "ask", I mean "threaten to fire them if they don't have a good explanation..."

For our association, we have a couple foreclosed units, and when they get around $1000 in arrears, that's usually when we send a formal notice to get the bank's attention, warning of a pending lien if they fail to pay their dues. That's been enough so far, and we've avoided having to actually spend the money to place the lien.

Never had a problem with any owners paying their dues on time. Only banks routinely avoid paying their dues. Big surprise...

[mrmpa]

24. Yes, we have a half-assed management company in regard to these.....

issues. However the board is very "hands off" overseers. I am running for the Board in February. This issue will be brought up. His failure to advise to put a lien on the property is enough to fire him & negate his contract.

[DirkGently]

3. Headline kind of makes up its own story.

Banks often take title at foreclosure. When they do, they have to pay HOA and condo dues going forward like any other owner. If they don't, they can theoretically be foreclosed, if the association wants to go through the hassle of a lawsuit and sell the entire property to collect a few thousand in fees. Not really any kind of "payback" happening there though. The bigger issue, maybe, is that all these properties are languishing, unused, because banks don't seem to be selling off the properties right away.

Empty residential units screw things up for everyone. A/c isn't run, which in Florida means moisture and mold. Upkeep is minimum or nil. The property may be vandalized. The associations are mad because the banks aren't getting new owners in there quickly enough to get the maintenance fees paid.

What we maybe ought to talk about more is why, if the banks are sitting on all these properties that they don't want to or can't maintain, they are foreclosing in the first place, instead of working better with the borrowers. They're in such a snit to kick people out, but once they have, they let the places fall apart, which further damages everyone's property values. If the property has sat long enough, it could be rendered essentially worthless.

[davsand]

7. Lenders only make money when they service those loans.

I have wondered for a while now how many banks are sitting on these foreclosures because they don't want bank examiners and stockholders realizing just how many bad loans they made and just how over exposed they were on those same loans.

As an added twist to all this, the banks don't especially want to release all those foreclosures at one time--it'd be like a store holding a fire sale. Rock bottom prices just to divest of the properties they should not have loaned on to begin with will further devalue that real estate.

I've been worried about this shadow inventory for a while now, and hearing that homeowners are putting pressure on those lenders only heightens my concern. The real estate market CAN, go lower, and this scares hell outta me. There is a huge mess sitting there waiting to come to light, and when it hits we may see even more declines in real estate values.



Laura

[Vincardog]

17. If the lenders were to "Mark to Market" all the properties they hold they would be exposed

as the Bankrupt criminal enterprises they are.
That is why they won't come clean.
They want to continue their ongoing criminal enterprises.

[Shadowflash]

4. The concept of a HOA is moronic, anyway.

Why would I pay someone thousands of dollars a year so they can tell me when to mow the lawn, what colors I can paint my house and how many toys my kids can have out on the lawn?

I's SO glad I don't have one of those where I live.

[ChairmanAgnostic]

6. Stepford communities, indeed.

scary places.

[JusticeForAll]

8. Not so moronic

especially when you have shared walls and shared rooftops.

Associations can have a good purpose of protecting the collective when lazy, neglectful or willfully destructive individuals harm their own property affecting others' properties.

In a shared condo situation if I kept my roof in sparkling condition but my neighbor was neglectful and did not - I would have to pay for his or her neglect eventually.

Associations are notoriously awful - but there are some benefits to them if they do not overstep certain boundaries.

[rox63]

9. My HOA takes care of things so we don't have to

I live in a condo building. The HOA takes care of all exterior and common-space maintenance, including landscaping, snow-removal, painting, roof, windows, etc. The condo fees are reasonable and well worth the money to me.

[YvonneCa]

10. That's because they actually own the physical...

...structures and the land. Condo owners own the 'airspace' within the walls of their own unit and a divided interest in all common areas...subject to MANY restrictions.

[PasadenaTrudy]

11. Exactly..

I would never buy a condo. You don't really own your structure. I'm sticking to my apt.

[rox63]

14. I'm fine with that

I wouldn't have bought a condo if I wasn't. If I ever get tired of this, I can sell it if I want to. I don't have to worry about a lot of things that owners of houses are responsible for, and that works for me.

[YvonneCa]

19. It worked well for me, too...

...after my marriage went south several years ago. I didn't have to worry about the outside, insurance, or even water use at all. It was a very secure and comfortable way to live. Everyone's circumstances are different, though. And sometimes things change...

[Sekhmets Daughter]

16. I have lived in Palm Beach County, FL

for over 25 years and in several HOA communities. Only one was ever a pain in the neck and they were temporary quarters so for a year we tolerated them. When we were looking to move here from NJ we found that as long ago as 1985 you could buy a house for $300,000 and end up with a neighbor who kept an old rusted out truck up on blocks in his front yard as zoning restrictions are very lax here. I kid you not. If you are going to invest that amount of money you want to know that the vacant lot next to you is going to end up with a structure comparable to yours in value. We finally decided we would have to take our chances with an HOA and were never sorry.

[gtar100]

12. They also fail to simply care for the property.

I've seen many properties turn from beautiful homes to houses and yards completely neglected. If they wanted the property so badly, they should take *full* responsibility.

[dixiegrrrrl]

18. Plus, are the banks paying the property taxes????

Would love to know if counties are getting the money they are owed.

[LeftyMom]

21. Here the city/county are having to fine the banks to get the properties maintained.

Or they go in and mow/drain pools/whatever and send them the bill. Pools in foreclosures turning into mosquito breeding pits have been a real problem.

[krakfiend]

13. not enough

funny, ironic tactic forclosing on banks, don't know how far that will actually go. what we need to do is bring criminal charges against those that help push this great nation into the problems we have now. put the ceos, wall street, and the "to big to fail" corporations in jail that started this mess of ours. next time they'll think twice before instituting some scheme where they profit millions while americans go bankrupt.

[FrodosPet]

22. People need to make criminal complaints to appropriate law enforcement

Fortunately we live in a country where people are not supposed to go to jail simply because we want them to.

They need specific names and charges and solid evidence of those charges. Unfortunately, financial crimes are often extremely complex and require intelligent and motivated investigators.

Which brings up the point: How do you get more progressives who have the training and ability to properly investigate into LEO positions?

[Supersedeas]

15. for regular homeowners, a foreclosure proceeding is devastating to your credit rating

Too bad, lenders can so easily dismiss and marginalize the legal contacts that so many of the rest of us are bound by.

Another example of the malliable rule of law is the two (2) Americas that we live in.

[aquart]

20. Tee hee.

[JNelson6563]

23. Sweet irony.