House Refinance Center
Power Of Your Homeowner's Association (HOA)
HOME       MORTGAGES       BREAKING NEWS       FORECLOSURES       GOOD FAITH ESTIMATE       HOUSING COUNSELING       LOAN MODIFICATION       VIDEOS       SLIDESHOWS
Home          Credit          Foreclosure          Refinance          Hard money          Interest only mortgage          Loan modification          Shortsale          Reverse mortgage          Strategic default
FHA       mortgage approval        nonprofit brokers       servicemembers       stated income          refinance calculator       downpayment        closing fees         bank owned (REO
title insurance       buying a home       refinance with ARM        appraisal inspection       community banks       good faith estimate           FHA streamline 203k           breaking news
calculators          zero down mortgage          second mortgage          mortgage interest deduction          mortgage servicing          first time buyer          financial reform          fannie and freddie
Homeowner Associations Sue Banks
Forcing The Banks To Foreclose




This is the year of litigation for the banks. They are being sued by homeowners. They are being sued
by investors, by Governments, and now by homeowner associations.

The robo-signing fiasco and the MERS scandal has resulted in several lenders postponing
foreclosures. The states that took the full force of the housing crash were California, Arizona, Florida
and Nevada. It is not unusual for the foreclosure process in these states to take a year or longer as
banks go back to check  and re-check their documents. In July the number of foreclosures reached a
44 month low. The log jam doesn't appear to be clearing anytime soon and it is beginning to affect the
homeowner associations.

There are over 60 million Americans living in communities that belong to a homeowner association or
condo association, according to Bloomberg.

Not all of these wonderful people can afford their homes. Many of the properties were bought with zero
down mortgages, and some homebuyers even had questionable incomes and employment.
Nonetheless, they were able to experience the American Dream of homeownership.

Homeowners are not paying dues.

Now the homeowner associations are faced with thousands of homeowners who haven't paid their
fees in sever months. It doesn't seem like a large amount of money, but if one third of the homeowners
are not paying then it becomes a drain on the remaining owners.

The homeowner associations must have money to pay for the day-to-day expenses of the complex or
to pay for an expensive project. The projects could be repaving the parking lot or fixing the swimming
pool. In the special assessment a homeowner might have to pay an extra $400  or more each month,
or it could be a one-time lump sum payment.

Banks are delaying foreclosures.

The homeowner association would like the banks to foreclose, then sell or rent the property to
someone new. Lender Processing Service reported that In June, homeowners facing foreclosure
hadn't made a payment in 587 days, on average. This is too long a period for the homeowner
associations to carry bad debts on their books. They need a process that would give them money fast.

But the lenders are not moving fast enough. Vintage East Condominium Association in Miami Beach
got tired and frustrated with waiting on the bank to foreclose on one of its members. So they went
ahead and sued.

In June, more than four years after the owner stopped making payments, a Judge ordered that JP
Morgan Chase no longer had a claim to the condo. The claim was for $144,000 and the condo sold
for $87,500. This judgment was timely as the homeowner association was in desperate need of
money.

Last September Deutsche Bank forfeited a condominium with a $149,300 mortgage on it to the Palm
Aire Gardens Condominium Association, in Pompano Beach, Florida.  Litton Loan Servicing was the
servicer and Deutsche Bank was the trustee. The loan servicer was responsible for all foreclosure
activity on this loan.

Palm Aire Gardens also had a victory against Wells Fargo when the banks failed to mount a defense.  
The condominium unit in question had a mortgage of $184,410. Wells Fargo had already sold the
loan.

In March 2010, Citigroup came out on the losing end of a lawsuit over  a condominium in Miami
Beach, with a mortgage of  $136,000.

Undoubtedly, the housing crisis has taken its toll on homeowner associations. Their revenue has been
reduced because they have less members. At the same time they can not increase the dues for fear
that this action would drive more members into foreclosure.