Currently in Escrow!! HOA cert doc holding up process..Please HELP!! (Los Angeles: sale, real estate)

[scarling]

I am currently in Escrow on a townhouse property in Los Angeles. My lender requires this HOA Certification Document that needs to be filled out by the Property Management company in order to help process the escrow. This document contains basic yes and no type questions such as number of units in the complex, whether anybody is renting there, Dollar amount in reserves etc... The one item the HOA for whatever reason is leaving blank is item #22 in which it asks "If a unit is taken over in foreclosure or deed in lieu, is the mortgage responsible for deliquent HOA dues? YES or NO"

The HOA insists that it is not as simple as a yes or no answer and attached a seperate letter to the lender explaining that Foreclosure pays nothing & deed in lieu pays all. The lender of course does not accept this.

Anyways so currently the escrow is taking forever and may potentially not go through.... Anybody have any experience with this or advice on how to proceed?

[smokingGun]

You should consult a real estate attorney who can talk with the lender and the HOA attorney. I was under the impression that back HOA dues are like mechanic's liens and have to be adjudicated in court to determine priority for collection.

[pacmanKO24]

I would deal directly with the property management company to see if they can give you a more direct approach as to why the HOA is not cooperating

[curiosa]

Have never heard of an HOA certification letter before. I wonder if that is a new loan requirement that has been put into place for 2010

[Lake Conroe resident]

Originally Posted by curiosa

Have never heard of an HOA certification letter before. I wonder if that is a new loan requirement that has been put into place for 2010

The lender definetely cares about the re sale cert... They want to know how sovent the complex is, what the percentage of owner occs is, and the rules of responsibility should a foreclosure arise, number of units, insurance etc..

I know if I were lending on a condo I would certainly want to know these things. I don't see why the HOA won't answer the question in doubt though; its real simple who is responsible, the owner. If the buyer is the owner then they are responsible; if the bank forecloses, then they are the owner and become responsible for the dues.

Either way when the unit re-sells after a foreclosure the HOA will get theirs as all they have to do is put a lien on the property.

[curiosa]

Originally Posted by Lake Conroe resident

The lender definetely cares about the re sale cert... They want to know how sovent the complex is, what the percentage of owner occs is, and the rules of responsibility should a foreclosure arise, number of units, insurance etc..

I know if I were lending on a condo I would certainly want to know these things. I don't see why the HOA won't answer the question in doubt though; its real simple who is responsible, the owner. If the buyer is the owner then they are responsible; if the bank forecloses, then they are the owner and become responsible for the dues.

Either way when the unit re-sells after a foreclosure the HOA will get theirs as all they have to do is put a lien on the property.

So if the worse case scenario happened being that I lose my job and have to foreclose on the property, are you saying the bank would end up having to pay the HOA dues up until it sells again?

[ferretkona]

Sounds as thou the property was foreclosed on from previous owner. That is when the lien would be paid off. Any purchase from the bank would include any fees already, not added to after the sale.

Or are you saying you will be foreclosed on before your purchase??

In any case it sounds like you are bumping uglies with the two hardest things in a condo, the management company and a previous foreclosure. Talk to a lawyer.

[Lake Conroe resident]

Originally Posted by curiosa

So if the worse case scenario happened being that I lose my job and have to foreclose on the property, are you saying the bank would end up having to pay the HOA dues up until it sells again?

I'm saying that they would be responsible for the time they owned it. Say you bought it in Jan; got foreclosed on in July, then the bank re-sold it in Nov. The bank would be responsible for July to Nov.