Community Living

What to do when banks don’t foreclose:

The financial meltdown in 2008 has caused collection problems for Community Associations. Specifically, banks take their good old time to foreclose on delinquent Association homeowners, leaving years of monthly assessments to be written off. The following are some ways to combat this problem.

1.) Sue the bank. Several Associations have been successful in suing banks to remove their lien on the property due to the banks’ lack of interest in foreclosure. While such a tactic provides a windfall, the Association still must finance the costly legal proceeding. However, if you can find an attorney who will defer the legal fees until the property sells, this option is indeed a viable one.

2.) Take ownership and become a landlord. Another creative way for an Association to recoup its back fees is for the Association to take ownership of the property by either its own foreclosure action or by a deed in lieu of foreclosure and then lease the property. The rental income will quickly reduce the assessment liability. However, if the bank does initiate a foreclosure, your windfall may have a limited duration

3.) Bankruptcy. In extreme cases where 5% or more of unit owners are in foreclosure, an Association can file for chapter eleven bankruptcy protection and petition the court for assistance in getting banks to quickly foreclose and to start paying monthly assessments.

In summary, banks are mess and they are making a lot of Associations a mess as well. If you wish to mitigate the mess, you must become creative in your thought process and by doing so, you may even create a windfall for your Association.

Disclaimer: This content including advice provides generic information only. It is in no way a substitute for qualified legal opinion. Always consult a specialist or your own attorney for more information. Acri Community Realty does not claim responsibility for this information.
Acri Community RealtyAbout Acri Community Realty: Acri Community Realty, located in the Greater Pittsburgh Area, specializes in custom HOA and Condo property management solutions, scaled to fit your needs.

Acri is known for the great care and pride in the work done to protect and enhance the value of your investment. They have the privilege of managing a diverse portfolio of properties while caring for each and every home like it is their own.

If you’ve had any issues with your HOA or Condo that you’d like Acri to try and delve into, and possibly write about later contact us via our website at ⇒ Acri Community Realty. We are interested to hear about your experiences and how an association has helped or hurt.


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