Homeowners Associations: The New Foreclosure
Florida is one of thirty-four states that allow for judicial foreclosures by HOAs
Palm Coast, FL – July 15, 2010
By: Diana Olick: CNBC Real Estate Reporter
"I had no idea that they could foreclose," Tony Goodman tells me.
Neither did I, but Goodman’s homeowners association did just that in April because he owed $769 in back dues.
"I owed the HOA very little money in comparison to what I owed my mortgage company and my mortgage company, which is Chase, bent over backwards to help me," Goodman adds. Even as he was working on a loan modification, Goodman’s HOA, Lookout Canyon Creek in San Antonio, TX took title to his home on the steps of the Bexar County Courthouse. They purchased the home for $2,019, about the amount of the dues plus attorneys fees.
Apparently this is not at all uncommon these days, as struggling borrowers let the dues slide, thinking it’s more important to throw all their cash into their mortgage payments.
Thirty-four states allow for judicial foreclosures by HOAs, although the rules and redemption periods differ. The redemption period is the amount of time that a homeowner has to pay up all the dues and fees after the HOA has officially taken title to the home.
Texas has a 180 day redemption period.
Florida’s is just 10 days.
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