Old dogs old tricks Once again The Banks are Abusing Homeowner Associations
A lender becomes responsible for paying maintenance fees and special assessments when they foreclose on a property and take title of the unit. Since the bank is the new owner, they must pay their dues like any other owner in the community. The problem is that banks often will NOT pay the HOA or condo fees until they’ve sold the unit. This is unfair to the community association, adding to the loss already realized in the time spent waiting for foreclosure—as many as four years in some cases—and magnifying the financial damage to the association. While the association has waited for payment of HOA or condo fees from the new bank owner, the good-paying owners are still paying for the shortfall by way of higher maintenance fees, special assessments, or reduced services. This is a case of Old dogs old tricks and once again The Banks are Abusing Homeowner Associations
The result is that the association usually takes a significant loss on the pre-foreclosure maintenance fees, even in super lien states where only a fraction of the balance will be recovered. The association is now in the unenviable position of having to wait until the bank pays for the maintenance fees owed after they have taken possession of the property. It may take several months or even years to recover the fees owed on these units which are not producing income for the association. The bank foreclosure was supposed to remedy a bad situation but now the association may be back to square one with a non-paying unit.
Additionally, in many cases the community association will write off what was owed by the original owner and not engage a collections agency to pursue them for the balance they owed to the association when the bank foreclosed. The bank foreclosure did not extinguish the debt the previous owner owed at the time the bank took title, and this money should be recovered.
The real estate market is cooling off, and banks are holding on to these units and NOT paying their maintenance fees for longer periods of time, which makes a bad situation even worse. Once again, a real estate meltdown like that of ten years past is looming, and we can see the ways banks are taking advantage of community associations. Your homes and your properties mean very little to banks who know they are not doing the right thing by withholding payment of their just and duly owed maintenance fees as well as special assessments. This creates a spiral effect where owners who are current with their assessments and fees incur additional costs in the form of increased maintenance fees, special assessments, or even a reduction in their community association services. So once again we have Old dogs old tricks Once again The Banks are Abusing Homeowner Associations.
After any foreclosure, an association needs to engage a collections agency to pursue the old owner for what was owed. The truth is that this seldom occurs because the association has been so abused and burned out that often they just take the loss, write it all off and move on… And what about the amounts due from the banks post foreclosure?
Introducing Axela’s Foreclosing Lender Assessment Guarantee (FLAG™)
Axela is now deploying an innovative solution that does not cost the association anything and removes the burden from the board and/or management company (who are already preoccupied maintaining the facilities and tending to the needs of the association’s membership). Why not have a specialty finance company pay for what the bank owes, from the time they take title until the time they sell the unit or decide to pay what they legally owe? Axela is ready to step up and fund for everything the bank owes post foreclosure. Axela will also work to recover what was owed by the old owner when the bank took title.
Axela’s Foreclosing Lender Assessment Guarantee (FLAG™) program does not require the association to incur any costs. You may be asking, how does Axela earn money by funding what the bank owes? The answer is simple – most associations have the right to charge late fees and late interest. In a situation where a bank has taken title and is not paying their incurred fees, Axela will fund the association what they are owed, and retain the late interest and late fees per the governing documents of the association.
With bank-owned units, the association will never feel the pain of a non-paying bank owned units and replicate a perfect cash-flow scenario. In addition the association will engage a collections solution to recover what was lost from the old owner when they were foreclosed out.
Call Mitch Drimmer today at 786.832.9849 or email firstname.lastname@example.org today and stop banks from taking advantage of your community association. End the abuse of your community association by Banks.