Banks not Foreclosing

Does anyone else have this problem?

Occationally, the HOA has to foreclose on a property when owners fail to pay their dues. Our lawyer handles all that. Well, normally, the bank will than foreclose on us since they have the first mortage. Once they claim ownership, we can than charge the bank for the on going dues. Well lately, some of the banks are not taking ownership (e.g. not filing papers) to avoid paying the HOA dues. One has changed the lock on the unit but not filed the paperwork so the unit is owned by the HOA but we can not do anything with it. I am guessing that when taxes come due they will make themselves know legally to prevent the town from taking the property but that is five months away. I am guessing banks have a big backlog of foreclosed houses that they are really slow anyway ... and it is a shame because people ask me everyday about how they can buy the property ... finally, I think there is a law whereby the HOA can rent out the unit with the bank in absent but we could give not assurances to the renter how long they coudl stay. Thought?

We checked with our attorney and yes we can rent the units we've foreclosed.
We rent them very cheap and explained that there is no lease and that the unit will eventually be foreclosed on by the bank. We’ve been extremely fortunate, but we only rent to people we know or who have been recommended. We actually have a waiting list. You're right about how long it's taking the banks to foreclose. We've been renting one unit for almost 2 years with no foreclosure date in sight. We did have one bank change the locks and posted a no trespassing sign prior to us renting the unit. I contacted our attorney and he provided us with a certificate of title for the locksmith and we been renting the unit with no problems. Since we began renting our foreclosures, we have received over $16,000. The longer the banks take the more money we make!!

No we don't pay the taxes and the association carrys the property master policy for the association. We just collect the rent. This is working for us because we have great tenants. In fact several renters are even planting flowers, the units have never looked better. But remember to rent from us you have to know someone and be recommended.

Robert I believe I first heard of reverse foreclosures on hoatalk. Just a few weeks ago I sent the article to our attorney and haven't heard back from him.

Thanks

Banks not foreclosing and reverse foreclosures are becoming popular. Banks are not happy.

Glen, I couldn't get your url but I did pull this up with a Google search.

Abandoned Units
Condo Associations Plagued With Abandoned Units Demanding Banks To Foreclose Or Give Up Title
Click Here To Read More In David Sutta's Blog
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David Sutta
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A new tactic in dealing with foreclosed condo units is being used by one attorney in South Florida.

Ana Martinez is slowly watching her apartment building deteriorate with the housing crisis. Standing on her front porch she told CBS4's David Sutta, "We don't even feel safe living here anymore."

With just half the building's unit owners paying their association dues, Ana is left picking up the tab: $417 a month. Martinez said she's "frustrated, I am to the point of giving up."

The association has done just about everything, even foreclosing on units. Banks that own the mortgage on the apartment though take priority, and across South Florida banks are stalling to foreclosure.

Attorney Ben Solomon of the Association Law Group explained, "The bottom line is the banks don't want to assume the liability associated with the unit, including the obligation to pay maintenance assessments to the association."

Solomon is now challenging the banks to foreclose or get out of the way.

"The bank has to make a decision as to if they are going to take title to the financially upside down unit, or release their mortgage," said Solomon.

He calls it a mortgage terminator. He demanded Citibank to foreclose on unit 14 in Martinez's building. Surprisingly, instead of an 18 month legal fight, Citibank wrote off the debt, and handed the title over.

Jason Schoenholtz with Regatta Management took CBS4 inside the unit.

"Yeah it's completely abandoned. It look like somebody just ran out the door and left everything behind," Schoenholtz said, as he walked around the dilapidated apartment. The association now owns this two bedroom apartment. It needs work, but Schoenholtz believes they can sell it.

Schoenholtz said, "You're looking at 20-30,000 boon for the association, which they desperately need."

The association is smug with Citibank's willingness to walk away. One has to wonder if banks forced to foreclose will continue to do this, or was this a fluke?

"Is it a gimmick? Until somebody stops them from doing it. It's reality," said Schoenholtz.

Solomon believes this case will set a precedent for more cases.

"They can't sit on the sidelines anymore. And that's this legal strategy. It's to force them into making a decision," said Solomon.

Either way the association wins collecting dues or now title from the bank. Solomon says he plans to use this tactic on 12 more properties. It's an interesting concept. Forget foreclosure or refinance. Just ask the bank for the title. Who knows, maybe they'll give it to you.

If you are interested in more on this story go to David Sutta's blog on CBS4.com