A common problem in Kansas City is a few Kansas City homeowners associations being fed up with unpaid home association assessments on homes in the process of foreclosure.
Now homeowner associations have a new legal tool to force lenders to pay.
With so many abandoned distressed Kansas City homes, it is becoming increasingly difficult for home associations to pay bills for services such as water, cable and maintenance. When there are shortfalls, associations typically have little choice but to raise fees for all homeowners who do pay their bills.
Legally, the owner of the property must pay the fees. But when banks take months or sometimes a couple years to foreclose, properties are left in limbo. Holding off on foreclosing by lenders is common due to the number of homes worth less than the mortgage amount. This leaves no one paying association fees.
Many homeowner associations have found a legal process in a reverse foreclosure.
When a home or condominium owner stops paying, the homeowners association files for foreclosure itself and takes title. It can do this because of the unpaid fees. The homeowners association does not have the ability to sell the home because of the bank's lien, so it asks a judge to give the title back to the bank.
Why do the home owners associations do this? Isn't this speeding up the foreclosure process?
The homeowners association does this to speed up the foreclosure process. Now that the lender owns the home, it is legally has to pay the fees.
The legal tactic is new but is gaining popularity as more associations hear about it. Will reverse foreclosures start happening in Kansas City like they are being used in homeowners associations in South Florida.
It worked this year for Keys Gate Homeowners Association in Homestead. A lender had filed a foreclosure notice for a condo more than two years ago but was dragging its feet.
The association, represented by The Association Law Group of Miami, was awarded title of a home in January. The judge transferred ownership to the bank the same day.
If you live in an area of high real estate foreclosures you may see reverse foreclosures soon.
Let us know what you think or add to our blog by writing a comment.
Now homeowner associations have a new legal tool to force lenders to pay.
With so many abandoned distressed Kansas City homes, it is becoming increasingly difficult for home associations to pay bills for services such as water, cable and maintenance. When there are shortfalls, associations typically have little choice but to raise fees for all homeowners who do pay their bills.
Legally, the owner of the property must pay the fees. But when banks take months or sometimes a couple years to foreclose, properties are left in limbo. Holding off on foreclosing by lenders is common due to the number of homes worth less than the mortgage amount. This leaves no one paying association fees.
Many homeowner associations have found a legal process in a reverse foreclosure.
When a home or condominium owner stops paying, the homeowners association files for foreclosure itself and takes title. It can do this because of the unpaid fees. The homeowners association does not have the ability to sell the home because of the bank's lien, so it asks a judge to give the title back to the bank.
Why do the home owners associations do this? Isn't this speeding up the foreclosure process?
The homeowners association does this to speed up the foreclosure process. Now that the lender owns the home, it is legally has to pay the fees.
The legal tactic is new but is gaining popularity as more associations hear about it. Will reverse foreclosures start happening in Kansas City like they are being used in homeowners associations in South Florida.
It worked this year for Keys Gate Homeowners Association in Homestead. A lender had filed a foreclosure notice for a condo more than two years ago but was dragging its feet.
The association, represented by The Association Law Group of Miami, was awarded title of a home in January. The judge transferred ownership to the bank the same day.
If you live in an area of high real estate foreclosures you may see reverse foreclosures soon.
Let us know what you think or add to our blog by writing a comment.
Blog post written by the Dowell Taggart Team of RE/MAX Best Associates
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