Recently in Condo/Homeowners Association Category

July 27, 2012

Will a Second Mortgage and HOA Fees be Discharged after Foreclosure?

Jacksonville Foreclosure Defense TeamIn law school, students learn how the foreclosure process is supposed to work. The key work is "supposed to work" because foreclosure today does not have the intended results of its creators. The original intent of the foreclosure process was to allow mortgage and lien holders to recover the full amount owed if a borrower was no longer able to make the agreed payments. If a borrower defaulted on his or her mortgage, the primary or first mortgage holder would bring a foreclosure action in the Florida court system. Once a foreclosure judgment was entered, the property would be sold at fair market value from the courthouse steps. The first mortgage would be paid off in full, the second mortgage would be paid off second followed by any other liens the property may be burdened with. Any unpaid mortgage or lien would be extinguished from the property, allowing the new owner to take the property free and clear from any obligation.

When this process was established, it was established on the U.S. precedent that borrowers worked hard to pay off their mortgages and to establish equity in their homes. This process was also dependent on a stable and rising housing market. When the borrower defaulted, there would be equity in the home. Therefore, the property would be worth more than what was owed on the primary mortgage; allowing the first mortgage to be paid off in full, either part or all of the second mortgage to be paid off as well as any other liens. However, this is no longer the case in today's housing market.

Today, just about every home is upside down; more is owed on the home than the property is worth. When a home is foreclosed upon today, not even the primary mortgage is satisfied in full. Therefore, 2nd mortgages and other liens generally do not receive any funds from a foreclosure sale.

However, the law has remained unchanged: all junior mortgages and liens are still extinguished when a primary mortgage forecloses on real property. This means that when a primary mortgage forecloses, the new owner still takes the property free and clear of all. The exception is Homeowners Association (HOA) dues in Florida.

If the bank is the highest bidder at the foreclosure sale and takes title to the property, the bank is only responsible for a portion of the past due HOA dues. If any other person or entity obtains the property at the foreclosure sale, the buyer is responsible for all past due HOA dues. This is why it is so important to have a title search completed before purchasing any real property.

Long story short, all junior mortgages and liens are extinguished at a foreclosure sale. HOA dues are NOT. However, the HOA maybe be willing to negotiate a smaller settlement. If you have any questions, please consult a Jacksonville Foreclosure Attorney who may be able to answer your questions or help you negotiated a settlement with the HOA.

June 12, 2012

Should I worry if my HOA files a Foreclosure Action against me in Jacksonville?

Many times if a homeowner defaults on his mortgage and finds himself facing foreclosure in Jacksonville, FL it is also likely that HOA dues are also unable to paid. HOA's can be powerful entities with many rights. Paying your HOA dues is an obligation that runs with the land. If you receive a letter from HOA about any missed payment, charges or fees, it should not be ignored or taken lightly. Even if you make all your mortgage payments, you could still loose your home in foreclosure because of unpaid HOA dues. In many instances, it is very difficult for a homeowner to actually get in contact with their HOA in order to resolve an issue. That is why it is important to speak with an attorney who is experienced with HOA foreclosures if you find yourself in this situation. This is why!

Generally, if the Bank files a foreclosure action because of a default on the mortgage, it is likely (if they are AWARE of HOA dues not being paid and/or a foreclosure lawsuit by the HOA) the Bank will bring the HOA dues current in order to protect their interest. But this is not always the case. Not all Jacksonville Foreclosure Defense Attorneys are experienced in both Foreclosure Defense and HOA Foreclosures.

February 23, 2012

Free Foreclosure Case Review Extended Three Months

Jacksonville Foreclosure Defense TeamHomeowners across the country who want their foreclosures reviewed by a third party secured a victory this week. As part of federal regulator's independent foreclosure review directive, homeowners can have their cases checked but had to adhere to a deadline that was fast approaching April 30. This week, that deadline was extended until July 31, 2012.

The Federal Reserve and the Office of the Comptroller of the Currency announced Wednesday that the deadline was pushed back by three months. This was done in order to give consumers more time to file for a case review for those who believe they were subject of errors in the foreclosure process between 2009 and 2012. The reviews will be mandated and enforced by the above federal regulatory agencies. The review will further only apply to the mortgage servicers and their subsidiaries that were subject to the enforcement actions handed down by the Comptroller of the Currency and Federal Reserve on April 13 last year.

Those companies include: America's Servicing Company, Aurora Loan Servicing, BAC Home Loans Servicing, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage; Countrywide, EMC, Everbank/Everhome Mortgage Company, Financial Freedom, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City Mortgage, PNC Mortgage, Sovereign Bank, U.S. Bank, Wachovia Mortgage, Washington Mutual, Wells Fargo, Wilshire Credit Corporation.

Borrowers are eligible if their loan was serviced by one of the participating companies above, the mortgage loan was subject to foreclosure between January 1, 2009 and December 31, 2010, and the mortgaged property was the borrower's primary residence. Although there are no costs associated with these reviews, it is not recommended that a buyer go into them alone. There are also no costs for scheduling a consultation with href="" target="_blank"> an experienced Florida Foreclosure Defense attorney Contact href="" target="_blank"> a Jacksonville Foreclosure Defense lawyer to schedule a free consultation today.

December 8, 2011

Lender Hires Company to "Secure" a Client's Property...Trespass?

Trespassing.jpgA client came into our office today with an interesting issue. The client purchased a foreclosed property earlier this year and shortly thereafter leased out the property to a tenant to live in. Yesterday, the tenant came home to find the locks drilled and changed and a note on the door stating that the home had been secured by a property preservation company pursuant to an order by the lender. That is the interesting part, our client purchased the home outright with no mortgage!!!!

After doing some digging we were able to find that there was a small second mortgage on the home that had been recently been sold to a new company by the second mortgage holder. The new second mortgage holder was the party which hired the property preservation company to secure the home. The problem was when the bought the second mortgage they didn't realize that the mortgage had been foreclosed and they purchased a worthless mortgage. By hiring the property preservation company to secure the home they trespassed on our clients property.

While we were able to get this issue resolved with relative ease, many homeowners have not been so lucky. There have been numerous news reports over the past several years where banks have hired property preservation companies to secure homes and the companies go into homes, change the locks, remove all of the homeowners belongings and in some cases do damage to the home itself.

If you are a homeowner and have experienced a circumstance where your home or property has been damaged by a "property preservation" company by your lender, contact a Jacksonville Foreclosure Defense Lawyer or a Jacksonville Personal Injury Lawyer today for a complimentary review of your circumstances.

November 10, 2011

Can my Condo or Homeowners Association Make Me Pay Their Attorney's Fee if My Home is in Foreclosure?

Thumbnail image for foreclosure fees.jpgThis is one question that a Jacksonville Foreclosure Lawyer has been hearing much more often lately. There is no direct rule answering this question so the short answer is, it depends.

Typically, when a homeowner is facing a foreclosure from their lender, the lender joins the homeowner's association as a Defendant in the foreclosure suit in order to join all interested parties. The HOA will usually file a brief answer asserting their limited interest in the property. Then, a few weeks later, the homeowner will receive a bill from the HOA for a couple hundred dollars for the money the HOA had to pay an attorney to file that answer.

Florida law allows an HOA to recover for their attorney's fees when they are collecting past due HOA fees and costs, answering a foreclosure lawsuit obviously does not fall within that circumstance. Unless the HOA contemplated the current foreclosure crisis and included a provision in its bylaws allowing for the recovery of attorney's fees, it may not be able to collect for attorney's fees.

If you are facing a Florida Foreclosure Lawsuit, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Defense Lawyer today for a free consultation to determine what foreclosure defense options may be available to you.

September 3, 2011

Can a Second Mortgage Foreclosure Before the First?

home_under_water.jpgIn the great majority of foreclosure cases, the first mortgage holder is usually the one that brings the foreclosure action. But what about when there is a second mortgage involved? The second mortgage may file a foreclosure just to protect interest in the property, but this is a rare occurrence for several reasons.

While a second lien holder can file for foreclosure, due to the dramatic decline in home prices, only the first mortgage holder will usually get paid via any sale or auction that takes place. Since these home sales usually involve interested buyers looking for relatively cheap homes, the house usually sells for much more than is owed on the mortgage. Since there is likely not enough money to even pay off the property taxes, and potential homeowners association arrearages and first mortgage after the sale, it just doesn't usually make financial sense for the second mortgage company to initiate the foreclosure proceeding. But of course, that doesn't mean that second mortgage holders cannot or will not file a Florida Foreclosure Lawsuit.

If you are facing a Florida Foreclosure Lawsuit from the holder of the second mortgage on your home, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today to determine what options are available in your particular case.

August 9, 2011

HOA Foreclosure "Chasers"

Thumbnail image for foreclosure_Street.jpgA startling trend has developed taking advantage of a loophole in the Florida foreclosure laws that investors are salivating over. Florida law allows neighborhood Homeowner's Associations (HOA) to foreclose on properties when their monthly fees are past due. The kicker? The HOA doesn't even have to notify the mortgagee of the foreclosure if it's based on past due HOA fees.

The ability for an HOA to foreclose is understandable; residents in those neighborhoods expect certain services that are difficult to provide without proper funding. If the association doesn't foreclose, they're likely to forfeit their ability to collect on the debt once the bank steps in. Considering the fact that most homeowners owe less than $15,000 in HOA fees, these cases are ripe for trial in county court rather than in the circuit courts where damages have to exceed that amount. With circuit courts backed up due to bank foreclosures (those exceeding $15,000), bringing HOA foreclosures to county court speeds up the process drastically. Since the HOA doesn't have to notify the bank of the foreclosure, the bank doesn't even have the opportunity to protect their stake in the home by paying the arrearages.

Enter the investors who "buy" the property at auction, which effectively pays the HOA past due fees. One associate in the Tampa Bay area was able to secure $8.2 million worth of properties for a little over $200,000 in foreclosure auction bids. What do they do with the homes? Live in them, vacation in them or even rent the property during what is, at the current time, an extremely lengthy bank foreclosure process. Sadly the banks will eventually evict those renters after they are able to foreclose, with no legal basis to go after the HOA hawks.

The question is, how can one prevent an HOA foreclosure? In Florida, where the practice is most prominent, the best thing to do is to stay in touch with the homeowners association in your neighborhood. If you are behind on your HOA dues or even facing a foreclosure lawsuit from your HOA, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Defense Lawyer today to determine what actions can be taken to prevent the HOA foreclosure .

June 18, 2011

Does Florida Have A Foreclosure Redemption Period After a House is Sold?

Auction,jpg.jpgTechnically, no. Florida does not have a specific statutory foreclosure redemption period. In other states, the right of redemption period will state designated number of days to allow a borrower time to prevent a foreclosure sale by paying the entire balance due to the lender. During this period, a homeowner has the right to pay the redemption amount, without danger of being evicted.

While Florida does not have a statutory right of redemption period, there is usually a 20-30 day period between the public sale of a home and when the certificate of title is issued. While the 20-30 day time period is typical, certificate of title can be issued in a shorter period of time. Be aware that once the certificate of title is issued there is usually very little a previous owner can do to stay in their home.

If your home has recently be sold at auction and you would like to exercise your right of redemption prior to certificate of title being issued, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today.

June 14, 2011

Does my Homeowner's Association have the Power to Foreclose on my Home?

Thumbnail image for foreclosure_Street.jpgJacksonville residents living in communities with a homeowners associations (HOA) should be aware that Florida HOAs can foreclose a home for failing to pay dues. Some Florida borrowers are surprised, despite putting every penny towards staying current on their mortgage, when they still lose their home if they do not pay their HOA dues. Many homeowners are surprised when they find out they didn't lose their home to their lender; they lost it to their local HOA.

As Jacksonville Foreclosure Defense Attorney's, we have noticed a recent trend were Jacksonville residents are now foreclosure by their HOA. It is important to note that when you buy a home with a Florida HOA, you are buying into a deed restricted community. The agreement stipulates that you will abide by the HOA's rules. What many homeowners living in a community with an HOA fail to realize is that the remedial action for violation of these rules is sometimes foreclosure. Thus, they are legally entitled to foreclose your home.

If you live in a Florida community with an HOA and are facing the prospect of a foreclosure by your HOA, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Lawyer today to see what options may be available to you..

December 14, 2010

Foreclosure Sales down 25% in NE Florida

Thumbnail image for falling_home_values.jpgDue to the bank ordered freezes of foreclosure sales due to nationwide allegations of foreclosure fraud and robo-signors the year-over-year sales of homes and condominiums fell 25% in November. This stands in contrast to the month-over-month sale in the Jacksonville area, which increased 3%.

Pending sales rose by 22% in November but closings fell by a little over 24%. This trend had little affect on the prices of traditional sales which rose by 8.9%. The prices for non-traditional sales, those sales completed due to foreclosure or short-sale, fell by 3.2% in November.

November 21, 2010

Do I get taxed on any of my mortgage debt that is forgiven?

debtrelief.jpgMany homeowners who use foreclosure alternatives such as short sales or mortgage modifications in order to have a portion of their mortgage debt forgiven face the question "am I going to have to pay taxes on the amount of mortgage debt forgiven." In most instances that answer is no! The Mortgage Debt Relief Act of 2007 was enacted to help homeowners who were trying to escape toxic mortgages and the accompanying debt by not taxing the amounts forgiven as taxable income.

Homeowners who intend to claim the exemption must fill out Form 982 and attach it to their individual tax return in order to be eligible for the relief. Types of eligible debt are debts forgiven in connection with a foreclosure, debt forgiven due to a short sale as well as debt forgiven through a mortgage restructuring such as a HAMP modification. The Act was originally intended to only affect mortgage debt forgiven in 2007, 2008 and 2009 but was recently extended to include all forgiven mortgage debt through 2012!

If you are facing a Florida Foreclosure Lawsuit and want to explore foreclosure alternatives that may reduce your mortgage debt and take advantage of the extension of the Mortgage Debt Relief Act of 2007, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today.

September 3, 2010

Foreclosure Defense and Condo Fees

Thumbnail image for condo2.jpgA client recently came to us after being served with a foreclosure suit by her Condominium Owner's Association. She was $2,200.00 in arrears on her Owner's Association dues and couldn't believe that the Association would pursue such a drastic remedy for such a small amount of money. "Can they do that???" she asked incredulously. "And why would they, since my first and second mortgage holder would get paid first anyway?"

Normally this would be true, as the general rule on lien priority is "first in time, first in right." As it turns out, however, Condominium Owners Associations are an exception to this rule and, in fact, are entitled to a "super priority" status on their liens. Under Florida statute 718.116 ("the Condominium Act"), the Condo Association lien beats all but the purchase money mortgage on the unit. This lien even dates back to the recording date of the original declaration of condominium, regardless of when it is recorded. In plain language, this means that a Condo Association's lien "leapfrogs" second mortgages, construction liens and all other judgment liens. As a whole, Condo Owner's Associations fare far better than Homeowners Associations in terms of getting their liens for dues paid.

Even in the context of a bank foreclosure the Condo Association generally gets paid. If the unit sells at auction, the (possibly unsuspecting) buyer becomes responsible for ALL past due assessments on the unit at the time of purchase. In the event that the unit becomes bank owned, the bank is liable for the unpaid assessments for as long as twelve months back from the date of title transfer (or 1% of the original mortgage debt, whichever figure is lower).

Moral of the story: the Condo Association gets paid, one way or the other! If you are facing a foreclosure in or around Jacksonville, contact a Jacksonville Foreclosure Defense Lawyer to discuss your options.

August 16, 2010

Be Cautious When Purchasing A Home Foreclosed on by Homeowners Association

Thumbnail image for Thumbnail image for foreclosure_sign_home.jpgIn today's real estate market, home buyers are finding deals on homes that have been foreclosed upon by the neighborhood's homeowners association (HOA). HOAs in Florida have the legal right to place a lien on a homeowner's property if the homeowner is delinquent in paying the HOA fees, no matter how small the delinquent amount. This gives the HOA the right to foreclose on the home and sell it at an auction in order to acquire the minimal amounts that the homeowner owes in fees.

The HOAs are selling these properties very cheap at an auction because they usually only need to recoup a few hundred dollars in delinquent fees. But most home buyers do not realize that when a HOA forecloses upon a home it does not extinguish the lien that the lender has on the property. Many of these home buyers are finding out the hard way that even if they buy a home at a foreclosure auction the lender can still foreclose on the home subsequently. In some cases, the lender will not even deal with the new homeowners because they are not the individuals named on the mortgage.

Do not let this happen to you. If you are considering buying a home that has been foreclosed upon by an HOA, contact a Florida Foreclosure Lawyer or Jacksonville Foreclosure Defense Lawyer prior to purchasing the home.

August 15, 2010

Florida Homeowners Associations and Foreclosure

Thumbnail image for foreclosure_next_exit_sign.jpgHomeowners associations (HOA) as we know them developed in the 1960s. The rise of HOAs can be linked to a Federal Housing Authority (FHA) mandate which required residential developments to create a non-profit HOA in order for the development to be eligible for FHA insurance. The FHA also advocated attaching covenants to the property that included giving the HOA a lien on the property if the homeowner did not pay their homeowners fees. Any home buyer that wants to buy property in a neighborhood with an HOA is required to join the HOA and pay its fees.

The housing crisis in Florida has led many HOAs to take drastic measures. When a homeowner is facing the possibility of foreclosure, HOA fees are usually one of the first things that homeowners stop paying. In some neighborhoods in Florida the HOA fee delinquency rate is greater than 15%. This depletes the revenue of the HOAs forcing many of them to foreclose on the homes in their neighborhood in order to recover the delinquent fees.

Most homeowners are not even aware that their HOA can foreclose on their home for failure to pay their HOA dues. But if you are delinquent with your HOA fees, your HOA can and more than likely will foreclose on your home. Florida law is very advantageous to HOAs because there is no minimum amount which must be met prior to the HOA foreclosing on a home, the fees must just be delinquent.

It is very important as a homeowner that you stay current on your HOA fees because if you do not you will probably end up facing a foreclosure. If your HOA has initiated a Florida foreclosure lawsuit against you for delinquent HOA fees, contact a Florida Foreclosure Lawyer or Jacksonville Foreclosure Defense Lawyer . There are defenses to a HOA foreclosure lawsuit and a Foreclosure Defense Lawyer will protect your rights as a homeowner.

July 17, 2010

Can my Condo or Homeowners Association Foreclose on my Home? Part II

condo2.jpgWhile most homeowners believe that it makes no sense for a Condo or Homeowners Association to foreclose on their home, there are several reasons that a Condo or Homeowners Association may choose to do so. One reason associations choose to foreclose on delinquent homeowners is to prove to homeowners that the associations are willing to foreclose so owners considering not paying are persuaded to pay. As many homeowners continue to face financial difficulties, paying their mortgage becomes the primary concern and paying the Condo or Homeowner Association dues becomes secondary.

Another, primary, reason a Condo or Homeowners Association chooses to foreclose is to recoup unpaid dues. Most Condo and Homeowners Association's create their association fee by taking their estimated budget and dividing it equally among the number of associated units. When homeowners do not pay their dues, the associations are faced with a budget shortfall and as more and more homeowners fall behind on their dues the shortfall becomes too much to bear. By foreclosing, the associations gain title and can evict the homeowners and potentially rent out the property in order to recoup those past due association dues.

If you are a homeowner facing financial difficulties and your goal is to stay in your home it is in your best interest to continue to pay your Condo or Homeowners Association dues. If that is not a possibility or if your Condo or Homeowners Association has already begun foreclosure proceedings, contact a Jacksonville Foreclosure Lawyer to defend your foreclosure or to negotiate a workout of the past due amount.