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Condo and Homeowner Associations Foreclosing on Property Owners?

Are you working with customers that are looking for foreclosures? Probably.

Well, my customers keep asking me about properties that show something like $25,000 owed from a Homeowner's Association and being foreclosed. They believe they can purchase the property that is valued at least 10 times higher for the amount of money owed to the association. I tell them that the mortgage is still owed unless there isn't a mortgage and if there isn't a mortgage I can't believe a property owner would give up their home and lose all their equity over homeowner dues.

So, I did a little digging and found this Washington Post article:

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/12/AR2009021204268.html?nav=rss_opinion/columns

Today I was going to show a townhome that my buyer saw was being auctioned (foreclosed) until I realized it fell under the category above. When the listing agent asked why I canceled, I told her. She was surprised by this information as she did not realize the property was being scheduled for foreclosure. The property owner had assured her she was current with her mortgage payments.

Have any of you had dealings in this area? Please share.

 

Barbara Jenness takes joy in assisting people in buying or selling their home or land in northeast Florida (St. Augustine, Ponte Vedra,  and Jacksonville). She is a community activist and leader serving as President of Friends of A1A 2008-2010, Past President of Scenic & Historic A1A in St. Johns County for over 10 years, and past vice-president of Vilano Beach Main Street (North Shores Improvement Association). She is a past president for WCR in St. Augustine and a member of South Ponte Vedra Civic Association, Porpoise Point, Serenata Beach Club, and Palencia. She founded and is a Past President of the St. Augustine Regional Council (StAR Council) to promote the St. Augustine area to individuals outside the region.

Awards: REALTOR of the Year, Businesswoman of the Year, SPIRIT Award Passion, Five-Star Best in Client Satisfaction-7 Years Winner

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Comment balloon 4 commentsBarbara Jenness • March 14 2009 01:47PM

Comments

We do quite a bit of plumbing repairs for HOA's and have not encountered this situation. Great to see that you are providing valuable information to consumers.

Posted by Jim & David Schuelke (Schuelke Plumbing) over 9 years ago

Barbara...I got notice about a vacant lot that was being auctioned off by the "homeowners association" yesterday. I pulled title and there is no note or liens for taxes, so it looks like if this doesn't get called off at the last minute someone may own this land for short money (highest bid..takes it).

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) over 9 years ago

I recently heard of a HOA that believed they had bought a condo for what was owed in arrear dues.

However the caveat to the sale was that the mortgage holder would need to be settled before the transfer could be effected.

This made obvious sense to me yet the Board believed they were in line to make a huge profit for the HOA.

Posted by Palm Springs Realtor - Stewart Penn, COMPASS - Broker Associate (COMPASS) over 9 years ago

HOAs, it is a like-dislike attitude I have for them.  On the one hand they can and do help keep property values up.  On the other hand the directors can be little Hitlers.  Did you know that in some states which have a homestead exception which protects homeowners from some foreclosures but it does not protect them from foreclosure by HOAs?  The only way an HOA can foreclose on your property is if your dues are in arrears.  So when a homeowner thinks that they will not pay the fines an HOA imposes on them they should think again.  The HOA just takes the fines out of the dues thereby making the dues in arrears, bingo, foreclosure.

Posted by Ross Westerman over 9 years ago

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