Bank owned homes in an HOA

Started by HeatherB4 • 4 replies • 3167 views

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HeatherB4 (Florida)
Posts: 51

Posted:

Here's the problem, 20% of the homes in our community are bank owned but not up for sale. They are NOT being foreclosed on, they have already been. These homes are not being taken care of... grass, hoa dues, kids breaking into those houses and running a muck, and so forth.

These homes are behind 1 plus years in back dues. If the HOA puts a lien and forecloses on these homes and the deed is handed over what could go wrong?

Their are other homes in our community that have not paid there dues and the HOA has put a lien on these homes but is not wanting to go ahead with the foreclosures because they do not want to hold the deed to the home and have to deal with the Mortgage company on a later date. Also, holding a on to a home with a mortgage you still have to pay insurance, taxes and so fourth and will not be able to rent it out or sale it. They cant rent it out because the HOA allows only 12 month leases and knowing that the bank can foreclose on the house, they can’t ethically rent the house out knowing the bank can throw them out at any time. The reason the HOA can’t hold a sale on these homes is because they have a $400,000 plus mortgage and right now the market is showing about $150,000 for the value. So, we are stuck with the houses holding a mortgage, but cant the HOA foreclose on homes that are owned by the bank? Would the HOA still be responsible for the mortgage?

My guess witch could be completely wrong, but if the bank owns the home, and are not keeping the proberty up, and the HOA puts a lien on the house and forecloses on it, wouldn’t the HOA now own that house Free and Clear because at that point their would be no mortgage on the home… any thoughts?

JohnB26 (South Carolina)
Posts: 1,569

Posted:

attorney required

unless you enjoy russian roulette

HeatherB4 (Florida)
Posts: 51

Posted:

Sorry what do you mean?

I am not talking about homes that have a mortgage and are currently under forecloser, I am talking about the homes that are OWNED BY THE BANK.

The Bank is not taking care of these homes and have been empty for some time.

We have an HOA attorney, however they work at the direction of the BOD. The BOD does not want to proceed with forecloser on the BANK OWNED homes because they are scared to be left with a mortgage... but if their is no mortgage? If the HOA forecloses on these BANK OWNED homes after refuseing to pay, wouldn't the HOA have the house FREEE AND CLEAR and would be able to sale or rent the home out to make up for lost profits?

WilliamS1 (South Carolina)
Posts: 113

Posted:

Wow -

If the bank has forclosed on the home, they are responsible for taking care of the homes including the HOA fees. I do understand that the bank are not taking real good care of the homes lawns and stuff during this crisis.

If the bank are not paying the HOA fees, you can lien them and then they will be responsible when they sell the home.

Regarding the homes that are behind on HOA fees. I would likely go ahead and foreclose on the few worst and see if it sends a message to the rest. As I understand, once you foreclose, you are not responsible for paying the mortgage and can transfer title to the bank.

If you do want to rent them, I understand that you are still not obligated to pay the mortgage but you have to have a special lease that will allow the renter a one year lease.

I am not an attorney but we are approaching similar situations and we have reviewed the completely complicated mess a couple times with out lawyer.

Look forward to hearing back.

JeffP6 (Florida)
Posts: 91

Posted:

Similar issues in our sub - we dont have the issue with the banks not paying the HOA dues though.

One suggestion for maintenance of the property - save the HOA money - call Code Enforcment. THey will send the encessary warning to the owner fo record and give them time to bring the lot into compliance - if the owner doesnt then they begin maintaining the lot. They also place the cost of the maintenance against the owners county taxes

so they are sure to get paid back.

Is the bank renting out any of these homes. If so use every bit of the new Statute 720 to your advantage.

As far as the non payment of dues - you will have to go the legal route. The banks are obligated under FL law to pay either the last 12 months HOA dues or 1% of the mortgage whichever is lower to the HOA.

Also know that in FL when a new owner buys one of these homes the back HOA dues will be due to the association. - Florida Statute 720 to the rescue again

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