Im really confused??? Help

Good Morning ~
Please take a few minutes to read this email: email from owner of forclosed house
Re:
I am going to make this brief, but am happy to answer any of your questions and understand any frustration that may come my way!
We feel in love with the house the minute we saw it...we weren't even REALLY looking to buy....we told our neighbor, who was a realtor and went on to purchase the house. to be honest, we weren't qualified to buy a house of that caliber. The broker and "best friend" to our realtor found us a loan we couldn't refuse. We put $40,000.00 down and had two mortgages, I was explicit with the broker that going over $1,900.00 a month would be impossible for us! We planned to live in the house for 3-5 years and sell it, take the profit and buy a house we could afford. Things went great for awhile. We continued to invest approximately an additional $40,000. in repairs and upgrades-we painted everything, cut down trees, repaired the roof, installed a huge deck, replaced fixtures and gutted the kitchen. I tell you these dollar figures, so that you understand the rest of the story wasn't easy for us. As our mortgage climbed (we were in an adjustable rate mortgage), we were offered a business opportunity that I took to help build our future and make our mortgage payments. about 3-4 weeks into this deal, my partner quit-this business that was located in Tampa and only my name was attached to everything financial-we stayed in that business for an additional 12 months before shutting down. My children were in before and after care at school and were with us most weekends working this business. At the end of this business, which lost us more money and relationships, my husband was becoming increasingly sick. After weeks of testing we got the diagnosis that he and my children shared a genetic disease-which cost more time and money. It was at this point that we were borrowed over our eyeballs from a monthly standpoint to pay the mortgage.....The 1st mortgage went from somewhere around $1750 to $3200. We began the modification process with our bank and were denied several times. When talking to someone at the mortgage company, I was told to stop paying the payment, that the only way to get the modification was to stop payment for at least 90 days. after many tears and phone calls, we did just that. approximately 5 months into non-payment, we were denied modification AGAIN. Our mortgage company sold our loan...and we continue process, only to be denied again...what we didn't know was that the overwhelming majority of people were denied this modification. our mortgage company told us we had to pick a path either try to stay or try to sell...once we understood that we couldn't stay, we began the process to sell.
We had stopped paying our HOA when we could no longer afford it. When the business closed, I contacted Carla, I explained to her our situation and made a payment towards what we owed. I told her that I would be willing to be a liason between homeowners that weren't paying and the HOA, as I understood what could happen in someone's life financially-I even made the suggestion that the HOA come up with a legal document, which would allow homeowners to move ahead with current payments and freeze the prior debt, to keep money flowing. She said that sounded like something to discuss. A few weeks later, I received paperwork that HOA was filing foreclosure on us, I was shocked and upset as I had just reached out and was trying to clean up my mess.
Recently, we had a CASH contract on the house and would have surely closed by now...The contract included a FULL payoff to HOA-including substantial interest fees. We had moved to sell house and never received notice that the how was actually foreclosing on house....Carla decided to negate this contract and Ted has moved into I have been removed from email as I am not a homeowner any longer, so I am not sure what anyone knows about this situation. I have reached out-kindly to Carla and she told me not to contact her as the house no longer belongs to me...I would be happy to forward a transcript of texts and emails to anyone interested, so that you can understand that I have tried so hard to work this out-As you see, we are still tied to this property. we still have two mortgages on this house. My marriage and children have gone through tremendous troubles in the last several years and we just want to move on. We believe it is our calling to foster children and to one day adopt, but cannot as long as this foreclosure is outstanding. We could see the ending of this, but
Carla acting, allegedly on behalf of HOA, is blocking this for personal gain, in my opinion.

Yes, we did the wrong thing by not paying our bills BUT the HOA was to be made whole plus interest and still can be by selling this property....I don't understand why Carla (HOA) is insisting on taking advantage of this opportunity and my family....If there is anyone who is receiving this email that would be willing to stand up and say this is wrong....I beg you to do so. I told these details just so that you understand that we are human...some things have happened and I do NOT excuse our non-payment....but the HOA is representing people who are all neighbors and human, the things that have happened to me could happen to anyone. We just want the HOA to sell this house and allow us to get these mortgages paid off. Brenda Mull was my realtor and I don't want to muddy her in this email, but she has knowledge of the contract and sale that would have placed a new family willing to fall in love with the house and spend money to freshen it up, just as we had done when we purchased.
Call me if you wish to know anything regarding this-
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another email from hoa

The HOA acted on this action with lawyers every step of the way, and under legal advice. It went thru the lien and foreclosure steps as every delinquent account does. When an account is not paid for 5 years and ignores all legal correspondence foreclosure occurs. It is an unfortunate occurrence, but a reality that the HOA cannot control, we process all delinquencies in the same manner.
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another email from resident

Kathryn,
the only thing Carla had to do was sign off on the sales contract for the new buyers...the neighborhood had a full payoff plus interest, which she received by way of the prelim HUD. Carla expressed to my realtor and I that she would make the closing of this house happen, that she just wanted to be paid....which she then chose not to do. Ted showed to the court hearing with Carla and asked, "IF you don't mind my asking, what is the least your mortgage company would take for the house?" It was evident then, that Carla would not stand to her word and simply sign the contract and then sign the check for HOA. The intention was contrary to honoring the buyers, my family, or the realtor in good faith. If ANY of this was about getting the funds that were owed the HOA, this email wouldn't exist; I would be off these bad mortgages and the neighborhood would have new owners.

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another email from owner of forclosed house

Legally...OBVIOUSLY...you are within your right...I am speaking to people morally, ethically, and neighborly....there was NEVER a time where I didn't wave to each and every car as it passed, I bought magazines and candy when kids raised funds, I dropped off meals when someone passed or had a child (if I knew of it), I drove kids to school and I played kickball, I didn't bother anyone with frivolous matters....All that I am asking here is to be financially released from a bad part of my life. You, Carla, are choosing to harm my family for personal gain.
Per the document I viewed online, we owed $5,000.00 + an additional $2,800.00, in interest fees, that the HOA would have received at the CASH CLOSING- Could the neighborhood use $7,800.00 right now? If Ted wants the house, shouldn't he purchase it?? Let's have him buy the house....My last attempt to contact you was asking permission to give your information to my mortgage company, so that you as the "SELLER" could get this process rolling. You simply are not interested in expediting this matter...if you were TRULY acting on behalf of the HOA, you would already have these funds that you claim are the heart of the matter in the HOA account...You would have new owners probably laying sod and planting flowers. I encourage neighbors in Quail Ridge to check for funds in HOA account, accounting for 1st, last and security deposit of going rental rate, which is standard landlording procedures. And check to identify that there is a lease in existence that holds harmless the HOA for home repairs, such as the AC unit or pipes breaking. There should also be some insurance purchased to protect against lawsuits because if you just take a moment to look at my situation-YOU NEVER KNOW WHAT A NEIGHBOR is willing to do.
I am NOT excusing my bad behavior financially, I am just asking this neighborhood to help sell this house.....I can't imagine that the community knows that this is how their HOA is conducting "business" on their behalf. There couldn't possibly be an excuse for you not accepting the money owed plus high interest to settle this debt.....that moves everyone forward. Please don't justify your bad behavior by way of mine-
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Can you help me figure this out for the resident its very confusing something does not sound right about what the hoa did.

The thing I get from all of this is not understanding what a HOA is. It is NOT an entity. It is you and your neighbors. The corporation part of it is to help protect and set you up to be able to collect dues and such. A HOA is ONLY funded by it's owners for it's owners. So if one does not pay, everyone pays. It's not fair that one does not pay and then everyone else has to pay more to cover that. So of course the HOA would want legal means to collect that money. Which is foreclosure or liens.

A foreclosure/lien stops as soon as the debt owed is paid. Not that complicated. I found in your letter a lot of "emotional" issues that had no bearing on the financial brass of the situation. It's not being cold but money is money even if your kid needs it for braces.

So unless your willing to chip in and pay the owner's debt, you have to let the legal process go on. Lesson learned and a hug given.

John

Some tough love here.

Someone is in deep financal and maybe even legal trouble. I do not believe this chat forum is the proper place for this discussion plus free advice is often worth what one paid for it.

I am questionning myself if the mods should remove this as it seems to be far removed from the purpose of this chat board.

How say others?

I agree with you John46. I hope the moderator removes it.

JohnB64 shows 0 posts after his name, but he's become pretty familiar to me--he has lots of complaints. Kind folks here give him advice and he never replies again--not even to thank those who respond. I think he's posted 5-6 times.

I, for one, and going to ignore him in the future.

I've reread the whole posting of John's and from what I gathered the is a summary of the issue:

1) Owner had financial problems causing them to be delinquent in HOA and Mortgage accounts
2) HOA placed lien on property (for approx $8,000)
3) Owner found "cash" buyer for property and informed HOA of this
4) Prior to closing (which would have paid the lien) HOA foreclosed on the lien
5) Individual named "Ted" purchased the property at foreclosure and made a deal with the bank to pay off the mortgage.
6) End result, Because of the foreclosure, Ted purchased the property before the other deal closed.

To put it another way:

Owner and Buyer agree to sell home. During the closing process "Ted" wants the property and discovers the liens on the property. Ted asks the Bank what's the least they would take and they agree on a price. Ted now approaches the HOA (who knows about the closing) and convinces them to foreclose on the property. The HOA agrees and Ted buys the property at foreclosure, pays off the bank and the initial owner loses any equity that might have been in the house.

The question, concern and perception is:

Did Ted and the HOA join forces to purposely derail the cash deal that was in closing?

For the purpose of discussion, lets say they did. Other than the ethical issue - does anyone see any other issues?

I see no ethical issues at all.

The assessments were unpaid and the HOA had the legal right to foreclose. A foreclosure action typically takes at least nine months. There is no indication that the original owner opposed the foreclosure or communicated with either the court or the HOA's attorney that she had a buyer.

My own experience is that closing on a home purchase takes about a month. So, if the original owner had a buyer lined up to close on the sale of the house, and closing takes about one month, there would be no way that the HOA could have messed up the deal by initiating a foreclosure action after learning of the so-called cash offer.

As Melissa pointed out, this "cash offer" was likely a short sale. Short sales are conditional offers with the condition being that the bank agrees to take a whole lot less than what they are owed to remove their lien(s). The bank has no legal obligation to accept such an offer and no legal obligation to even respond to it. It sounds like the original owner and her "cash buyer" simply sat around waiting for the bank to respond and expected the HOA to do the same. The lack of response from the bank was effectively a rejection of the offer.

When house-hunting two years ago my wife and I found many short sales being offered. We found one that had a $250,000 mortgage offered for just $30,000. Another that I was interested in had a $220,000 mortgage but was offered at $55,000. I asked what incentive does a bank have to take losses of 75% or more on a loan? The answer is that they have none and offers for those amounts would be rejected out-of-hand as they were all unrealistically low. I suspect that the cash offer in this case was so unrealistically low that the bank was unwilling to make a counteroffer.

I see nothing wrong with what Ted did. He purchased the home at the HOA's foreclosure auction. The so-called cash buyer could have done the same but chose not to do so. Ted then negotiated a deal with the bank with realistic numbers and settled with them. The cash buyer could have done the same and chose not to.

The error I see here is entirely with the original owner who placed way to much reliance on an unrealistic cash offer that was ultimately not accepted by the bank.

Stop paying the mortgage, use that money to pay the HOA. It will stop the foreclosure. This will buy you time. Next, put the house up for sale. You can't afford it.

Only 4% of people who apply for a loan modification are approved. Your chances of winning the lottery might be better.

If your payments doubled, you obviously bought an adjustable rate mortgage. This should not have been a surprise. Next time read your paperwork before signing it or hire a lawyer to explain this to you. Only buy a fixed rate mortgage next time.

God bless and good luck.

Amen!

We got duped into an adjustable rate mortgage some years ago. They all start off with a very low rate for the first six months. Then the rates are supposed to be controlled by the CPI or some other figure but if you read the fine print you find that there is a range for the interest rate you will pay. So even if the CPI drops to zero, your interest rate never goes below a specified minimum rate usually charged to borrowers with really bad credit. They usually have a clause that prevents the borrower from refinancing during the first two years.

That was a lesson learned the hard way.

I inadvertently got duped into one of those on my second house purchase. They did a 80/20 loan. It was the 20 part they did a variable rate on. Did not know they had even after closing. A few months later that 20 got real high! So had to go refinance that part of it to be stuck at a fixed rate.

I read my paperwork and educated on the loan process. So you could imagine my shock to discover they had slipped this by me. However, I was able to catch it after my payment bill was sent to me. The first few months it had stayed the same but it changed pretty regular and quick after that. So got a taste of what these people are getting on their full loans that have been done this way. It is nearly impossible to keep up with those payments. I was shocked at how fast a mere 20K loan went up nearly $50 a month!

Since then I have been able to refinance and get out of that arrangement altogether. However, I now have a good understanding of what it feels to be in those people's shoes who are suffering from the mortgage industry greed. It's not always their fault for buying into the sales pitch as it is good. It's their default when they can't pay the mortgage...