I was told you can't get a mortgage for a condo these days

[bbronston]

Originally Posted by davery5872

How do HOA's "turn over" units?

I have thought the way out of this mess is for there to be an easier way for the HOA's to take over a unit. Such as, if the HOA fee is over a year past due, the HOA can claim ownership of the unit. Of course this would take changing state law. This would also force banks to keep current on REO's, which is why it wouldn't pass into law. While banks, or lenders, want HOA fees through out the complex to be current (in order to lend on a unit), they on the other hand do not want to pay their HOA fees on units they own. It is a crazy world.

We are talking about condo associations and FL state law does allow condo associations to foreclose on units (subject to the first mortgage). Unfortunately, while this allows the associations to rent the unit and try to recoup some of the lost money until the time that the first mortgage company forecloses and takes back the property, it doesn't do anything to speed up that process.

[joeyddog]

We bought a condo in 9/09. We had excellent credit ratings and had to put down 30%. It's ridiculous.

[KarynO]

Thanks everyone for the info, you have been very helpful.

[davery5872]

Originally Posted by bbronston

We are talking about condo associations and FL state law does allow condo associations to foreclose on units (subject to the first mortgage). Unfortunately, while this allows the associations to rent the unit and try to recoup some of the lost money until the time that the first mortgage company forecloses and takes back the property, it doesn't do anything to speed up that process.

But, why does it have to be subject to the first mortgage?
Anyway, if the mortgage holder is the owner (REO), why can't the HOA take over the unit if the mortgage holder does not pay the HOA fees?

[SoFLGal]

Originally Posted by davery5872

But, why does it have to be subject to the first mortgage?
Anyway, if the mortgage holder is the owner (REO), why can't the HOA take over the unit if the mortgage holder does not pay the HOA fees?

Since we were talking about how HOA's are being effected by foreclosures I thought I'd post this article from the Trib today: Foreclosure fees haunt homeowner associations | HeraldTribune.com

The debt collectors working for these associations are asking the courts to use more extreme measures. In a few cases, they have gotten judges to help them freeze and confiscate the bank account of a former owner.

Florida is gliding quietly into a new and potentially painful part of the boom-bust cycle, where stacked-up "deficiency judgments" for unpaid condo fees and unsatisfied mortgages could come back to haunt past owners. Many of them thought they had escaped further costs when they handed their home over to their lender.

If lawyers plot their course carefully, they can make the deficiency judgment against the former owner part of the original foreclosure proceeding. That way, the firm can go back for a simple hearing before a judge, rather than a whole new court case, to obtain what is known in the legal system as a "writ of garnishment."

With a few exceptions, like personal jewelry, this judge's order can be used to confiscate almost anything of value -- including wages or the cash in a checking account.
For the previous owners, who thought they were done with an "investment property" except for the bad credit rating, the garnishment can come as a rude shock.

[bbronston]

Originally Posted by davery5872

But, why does it have to be subject to the first mortgage?
Anyway, if the mortgage holder is the owner (REO), why can't the HOA take over the unit if the mortgage holder does not pay the HOA fees?

It is still subject to the mortgage because the lender still has a lien on the property that hasn't been paid off. Remember, the property secures the note.

Once the court finally orders the sale and the bank ends up with the property, the bank is required to pay the association the lesser of 1% of the mortgage or one year's worth of condo fees, as I recall. Anyway, once the lender takes it back and it is a REO, they want to get rid of it and the association is up to date as much as it is going to be so it doesn't make much sense to go after the bank after that.

[davery5872]

Originally Posted by bbronston

It is still subject to the mortgage because the lender still has a lien on the property that hasn't been paid off. Remember, the property secures the note.

Once the court finally orders the sale and the bank ends up with the property, the bank is required to pay the association the lesser of 1% of the mortgage or one year's worth of condo fees, as I recall. Anyway, once the lender takes it back and it is a REO, they want to get rid of it and the association is up to date as much as it is going to be so it doesn't make much sense to go after the bank after that.

So what you are saying is the bank can hold on to the condo for years trying to sell it, but is only required to pay for the last 12 months of fees. In this case, I do not see the difference between a condo owned by an individual or a bank. Why should a bank have special privileges?

[bbronston]

Originally Posted by davery5872

So what you are saying is the bank can hold on to the condo for years trying to sell it, but is only required to pay for the last 12 months of fees. In this case, I do not see the difference between a condo owned by an individual or a bank. Why should a bank have special privileges?

They have a very strong lobby.....