From Realtor Magazine Online, Daily Real Estate News June 18, 2009
Strapped condo boards are foreclosing on units whose owners have failed to pay monthly assessments.
Because banks that hold defaulted mortgages don’t owe condo dues until they actually take title of the property, many condos are facing serious shortfalls and as a result face difficulty paying operating expenses.
Condos and the attorneys who represent them say banks are deliberately slowing foreclosure proceedings to avoid paying monthly assessments.
"It's become common practice to delay foreclosure," says Eric Glazer, a condo-association lawyer in Hallandale Beach, Fla., which is between Fort Lauderdale and Miami. "Banks are forcing the associations to take them the distance."
To combat this, condo boards, which can attach liens just like banks do, are stepping up and forcing foreclosure sales. After collecting back assessments, they pay out what’s remaining to the bank and rent out the unit until the bank gets around to deciding what to do next.
Lenders say they aren’t deliberately slowing foreclosure sales, but are facing political pressure to allow time for loans to be modified. "There's no generalized delay in foreclosure on either condominiums or anything else. Unfortunately, the courts are clogged with these things," says Thomas Cardwell, general counsel for the Florida Bankers Association.
Source: The Wall Street Journal, Nick Timiraos (06/18/2009)
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