Tags: homeowners | foreclosing | banks | dues

CNNMoney: Homeowners Now Foreclosing on Banks

By    |   Wednesday, 26 December 2012 01:04 PM EST

In an odd kind of role reversal, homeowner and condominium associations are foreclosing on banks that have not paid association dues for properties they own.

Banks are supposed to pay association fees after they foreclose on properties, including unpaid fees going back 12 months in Florida, according to CNNMoney. But sometimes they don't.

And if they don't, the condo association and other homeowners still paying their dues must pick up the slack by paying higher bills or skipping maintenance or services. Hundreds of homeowner associations in Florida are now fighting back by foreclosing on bank-owned properties, CNNMoney reports.

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Working for homeowner groups, Miami attorney Ben Solomon has filed over 1,100 liens against banks and sought 133 foreclosures, according to CNNMoney.

Typically, banks pay up and foreclosure is not completed, he says. So far he's completed foreclosure all the way auction on the property only once.

The Southbridge Homeowners Association in Pembroke Pines, Fla., began foreclosure proceedings against Deutsche Bank last spring after the bank didn't pay fees for over 2 ½ years on a home it owns in the association.

Deutsche Bank and other banks say they are just trustees of the property. Instead, the mortgage servicer administering the mortgage is supposed to pay the dues.

Who has to pay the fees depends on who holds the property's title after foreclosure, attorney Michael Gelfand tells CNNMoney.

What banks have to pay depends on the state's law, says Charlotte, N.C., attorney Michael Hunter in his column in the Charlotte Observer.

Under laws in North Carolina and many other states, banks are only responsible for assessments after the foreclosure deed is recorded and they obtain the property's title, not fees the former owner failed to pay, Hunter explains.

However, some states, such as Florida, he says, have "super lien" laws that require the bank to pay some of the previous unpaid fees, usually capped at six or 12 months or a percentage of the total unpaid debt.

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In an odd kind of role reversal, homeowner and condominium associations are foreclosing on banks that have not paid association dues for properties they own.
homeowners,foreclosing,banks,dues
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2012-04-26
Wednesday, 26 December 2012 01:04 PM
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