MIAMI – Nov. 24, 2010 – In Florida, a lawyer representing condo associations is taking a new approach with mortgage lenders in order to prevent the associations from being saddled with unpaid dues while lenders put off foreclosure because they do not want to be responsible for those costs. The attorney is giving banks two choices: foreclose now or have the mortgage terminated, a process also known as reverse foreclosure.
When an owner falls behind on condo fees, associations can file a lien against the unit, demand the balance of the yearly assessment or foreclose; but the latter option generally means that they own the unit and likely will be unable to sell it because the mortgage balance is greater than the unit’s value. However, the mortgage lender often doesn’t want to foreclose in these cases because it will then become responsible for the condo fees, real estate taxes and insurance.
Ben Solomon, an attorney with the Association Law Group, recently filed suit against Citibank after the association foreclosed on an owner who was delinquent on her condo fees. The lawsuit cited a “restraint on alienation,” meaning that the outstanding first mortgage and the fact that the mortgage balance was greater than the fair market value of the unit impeded the unit’s sale.
Citigroup ultimately released the mortgage so the association could sell the unit for whatever price it could fetch on the open market, with the new owner taking over the condo fees and real estate taxes.
Source: Washington Post (11/20/10) P. E1; Kass, Benny L.
© Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688
When an owner falls behind on condo fees, associations can file a lien against the unit, demand the balance of the yearly assessment or foreclose; but the latter option generally means that they own the unit and likely will be unable to sell it because the mortgage balance is greater than the unit’s value. However, the mortgage lender often doesn’t want to foreclose in these cases because it will then become responsible for the condo fees, real estate taxes and insurance.
Ben Solomon, an attorney with the Association Law Group, recently filed suit against Citibank after the association foreclosed on an owner who was delinquent on her condo fees. The lawsuit cited a “restraint on alienation,” meaning that the outstanding first mortgage and the fact that the mortgage balance was greater than the fair market value of the unit impeded the unit’s sale.
Citigroup ultimately released the mortgage so the association could sell the unit for whatever price it could fetch on the open market, with the new owner taking over the condo fees and real estate taxes.
Source: Washington Post (11/20/10) P. E1; Kass, Benny L.
© Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688
No comments:
Post a Comment