Thanks very much to Burbed reader nomadic for passing along this fascinating news item via IP. That stands for Infirm Pigeon, which explains why it’s not as timely as our usual articles.
By Jay MacDonald · Bankrate.com,
Monday, July 4, 2011, Posted: 9 am ET
Here in Florida, the Foreclosure State, we thought we’d already cataloged every genus responsible for this plague on all our houses, from the predatory lenders to the oblivious robosigners androcket dockets to the no-mod-for-you bank Nazis. That was, until we caught wind of the HOA chasers.
The St. Petersburg Times recently profiled an opportunistic little industry that discovered a loophole in the state’s foreclosure laws and is milking it for all it’s worth.
Florida law allows homeowners associations, or HOAs, to foreclose on properties when dues are in arrears and does not require the HOA to notify the primary mortgage lender. Florida has 40,000 homeowner and condo associations, many struggling to keep basic services going with so many owners behind in dues. The HOA’s lawyers encourage them to foreclose because, if the bank beats them to it, they usually won’t see a cent.
Here’s where opportunity creeps in: Since most homeowners owe less than $15,000 in association dues, the HOAs can file their foreclosure cases in county court rather than in circuit court, where caseloads are backed up. This allows the associations to get final judgment on a foreclosure in as few as 270 days verses the 617 days it now takes for the average bank foreclosure.
The piece goes on to explain that with the long wait times on foreclosure trials, coupled with county courts not notifying banks of the HOA lien foreclosure, scammers grab “temporary” control of these properties for years. What do they do with them? Live in them? Share extras with all their friends? Have blowout parties in a different locale each weekend, because they can?
Better yet, rent them out! Fill them with renters who don’t know the foreclosure clock of doom is counting down. And this is all completely 100% legal! At least it’s legal in Florida. I don’t know why everyone keep ragging on California real estate problems. Florida is clearly the champion when it comes to Real Scammery.
Now, Florida is far away, so feel free to also discuss things closer to home. Scams in the Bay Area? Open houses? Maybe some more about the Facebook IPO? This is an Open Thread.