Lender Vs Association Video
Condos, Homeowners Association and Foreclosure troubles? Listen to part one of a 3 part series as Shawn Yesner explains a case involving a private lender involved in a foreclosure and was assessed a years worth of fees because the original attorney failed to mention the association in the foreclosure. Have questions about foreclosure? Call Yesner Law for a free consultation to learn how to protect yourself during a foreclosure involving a condo or homeowners association.
Next thing I want to talk about in relationship to leans is something I think we’ve all had to deal with at one time or another. First lenders versus second lenders versus associations, condominium and home owner associations. As most of you know condos are governed by chapter 718, homeowners associations are governed by chapter 720, both condominium and home owner associations -Both statutes rather, limit the liability of the association to the first mortgagee of twelve months of unpaid assessments or one percent of the mortgage whichever is less. What that means is that if that bank takes title through foreclosure the bank owes association, 12 months of unpaid assessments or one percent of the mortgage, whichever one of those numbers is less. Something interesting in the statute, the condominium association must be joined in the foreclosure for that to apply. The homeowner association must be initially joined for that to apply. The word “initially” was left out of the condo statute. So how does this apply in practice? I actually had a case, it was a private mortgage holder he wasn’t getting paid It was a condominium association, he hired a law firm to foreclose, the law firm did foreclose, took title, failed to name the association the association said ‘fantastic, you failed to name us; our bill is forty thousand dollars. Payment in five days.’ The new homeowner, former mortgage holder, filed a re-foreclosure, which is something that you can do if you accidentally left out a junior mortgage, a junior lean holder. You file a re-foreclosure, the court basically gives that lean holder a little bit of time to either object or not object and if they do not object they’re then included in the foreclosure. The attorney included the condo association in a re-foreclosure, the condominium association objected and said “you cant, the statute says we must be named.” The lesgilators could have said “Initially joined” in both cases and they didn’t, they only said initially joined as the home owners associations the fact that we followed re-foreclosure means we joined the condo association and therefore we should fall under the safe harbor of 12 months or one percent. Now in this case the mortgage was about forty thousand dollars, so the association that originally wanted about forty thousand dollars, ended up getting four hundred dollars