There is a new mortgage terminator strategy, which is a legal tactic that forces lenders (e.g., banks) to come current with homeowner association dues on distressed homes. The action is a "quiet title action" that requires a lender to prove it owns a property free and clear by foreclosing or giving up its lien.
According to the Community Associations Institute, more than 70% of bank owned houses and apartments are not making regular assessment payments to the boards that operate the properties.
Why would a lender not take title on a foreclosed home and leave it in a "short sale" situation? The answer is in many situations it makes more financial sense for the banks to let things lie. The new strategy will force banks to make a decision as to whether or not it makes sense to hand over title to the homeowners association or come current on fees. The new strategy has been sanctioned by three courts in Florida recently.
Non-payment of association dues puts a financial strain on the community. When not enough funds are collected to pay the bills related to the community, either residents take up the slack or the association reduces the amount of services it provides.
HOA assessment delinquencies doubled since 2005 from 19% of associations reporting delinquency rates of 5% or above, to 65% in 2010. In 2010, 30% of associations have delinquent assessments exceeding 10%. Moreover, 10% or almost 30,000 associations in the US have rates above 20% delinqencies in 2010.
With the new legal tactic in place, associations can take title and force the primary lien holder to initiate it own foreclosure proceeding or release its mortgage so the association can sell the unit to cover the fees owed. This will allow for better upkeep of the communities, help to stave off falling home prices and not place a bigger burden on homeowners who are current with association dues.
I think it is very important for buyers and sellers to understand what is happening in the local markets. As this post discussed, it is important to understand what is happening in individual communities.
As a local Relator, I am aware of what is happening in many of the communities. If you are thinking of selling or buying a home, please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Showing posts with label Bank. Show all posts
Showing posts with label Bank. Show all posts
Subscribe to:
Posts (Atom)