Association Foreclosures, Anyone??

Everyone: All across the U.S. we are hearing sad stories of homes going to foreclosure due to the greed exhibited by lenders and banks to buyers who thought the "variable interest rate" sounded good. Due to the very low desirable rate at purchase, and then some 2-5 years later the rate rises so substantially the homeowners are forced to walk away from their home due to their inability to pay the mortgage. Banks are now left with empty homes to sell all across the country.

Just wondering if this trend is impacting any community associations with homes left uninhabited due to these walk-away foreclosures.

PaulM - I can't speak to unscrupulous business ethics of some, however I'm well aware of Adjustable Rate Mortgages (ARMs) and their risk of a teaser interest rate and the ability for it to increase. While I am saddened at the crisis, I find it hard to believe that the vast majority of owner's that chose variable interest rate options didn't know what they were getting into.

Be that as it may, some owners were savvy enough to get out before the crisis hit, some by selling, some be refinancing. The impact of those that sold when the market took a plunge but before they went bankrupt I strongly suspect has affected many associations. Reason is that some were scared, got out, and sold at a loss, thus lowering the average in the Realtor comps. In that way, even if there are no uninhabited homes, this crisis effects us all in HOA and COA's. For those of us that are in the associations, we'll pull through but just have to weather the storm and pray we don't loose our initial investment. I think we're in at least a 4-5 year holding period, but that's pure projection.