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  • April 12, 2008 at 7:18 AM #12408
    jpinpb
    Participant

    I was taking to a neighbor in my complex about my favorite topic, the RE market. He proceeds to tell me about an acquaintance of his who lives in a condo complex in El Cajon. She has a dilemma. She is one of four people left who are paying HOAs.

    Now unfortunately I don’t have details and he didn’t either, as in name of complex or how many units, etc.

    The problem is all the other owners have defaulted on their loans, are stil living there, just not paying on the loan or HOAs. Banks have not foreclosed yet.

    The real problem is the four owners who are making mortgage and HOAs are paying and are now getting regular special assessments which are getting very expensive.

    Apparently they got a HUGE water bill assessment and they are in a bind b/c if they don’t pay, the water will be turned off, is what he was saying.

    Can the water department do that?

    We discussed this further, that if the bank eventually forecloses, the bank is obligated to pay the HOAs, right? But I guess whichever bank has the first loan, if they sell and get lower than what is owed to them, then the second lien holder and the HOAs are $hit out of luck.

    So do these four owners continue every month to pay this very high water bill and other special assessments? They don’t want to walk and f/up their credit.

    Very catch-22 situation. One more reason to hate HOAs, besides their military rules and regulations.

    If this happened in EC, what’s to stop it from happening in other complexes that get real bad?

    April 12, 2008 at 8:11 AM #185453
    sandiego
    Participant

    Once the foreclosure happens, the bank (owner) is obligated to pay the HOA. In most cases they won’t. The HOA assessments will accumulate and become a junior lien on the property (behind RE taxes, recorded trusts deeds). As you stated, if there is any equity in the home, they might eventually get paid when the home is sold but that could be years (and tens of thousands of dollars) later. The HOA can go after the former owner personally but that is usually a waste of time.

    My building has $48,000 in HOA receivables. They also just wrote off $6,000 on one unit that is uncollectible because the former owner didn’t pay for several months before they were foreclosed on.

    April 12, 2008 at 8:11 AM #185510
    sandiego
    Participant

    Once the foreclosure happens, the bank (owner) is obligated to pay the HOA. In most cases they won’t. The HOA assessments will accumulate and become a junior lien on the property (behind RE taxes, recorded trusts deeds). As you stated, if there is any equity in the home, they might eventually get paid when the home is sold but that could be years (and tens of thousands of dollars) later. The HOA can go after the former owner personally but that is usually a waste of time.

    My building has $48,000 in HOA receivables. They also just wrote off $6,000 on one unit that is uncollectible because the former owner didn’t pay for several months before they were foreclosed on.

    April 12, 2008 at 8:11 AM #185506
    sandiego
    Participant

    Once the foreclosure happens, the bank (owner) is obligated to pay the HOA. In most cases they won’t. The HOA assessments will accumulate and become a junior lien on the property (behind RE taxes, recorded trusts deeds). As you stated, if there is any equity in the home, they might eventually get paid when the home is sold but that could be years (and tens of thousands of dollars) later. The HOA can go after the former owner personally but that is usually a waste of time.

    My building has $48,000 in HOA receivables. They also just wrote off $6,000 on one unit that is uncollectible because the former owner didn’t pay for several months before they were foreclosed on.

    April 12, 2008 at 8:11 AM #185499
    sandiego
    Participant

    Once the foreclosure happens, the bank (owner) is obligated to pay the HOA. In most cases they won’t. The HOA assessments will accumulate and become a junior lien on the property (behind RE taxes, recorded trusts deeds). As you stated, if there is any equity in the home, they might eventually get paid when the home is sold but that could be years (and tens of thousands of dollars) later. The HOA can go after the former owner personally but that is usually a waste of time.

    My building has $48,000 in HOA receivables. They also just wrote off $6,000 on one unit that is uncollectible because the former owner didn’t pay for several months before they were foreclosed on.

    April 12, 2008 at 8:11 AM #185471
    sandiego
    Participant

    Once the foreclosure happens, the bank (owner) is obligated to pay the HOA. In most cases they won’t. The HOA assessments will accumulate and become a junior lien on the property (behind RE taxes, recorded trusts deeds). As you stated, if there is any equity in the home, they might eventually get paid when the home is sold but that could be years (and tens of thousands of dollars) later. The HOA can go after the former owner personally but that is usually a waste of time.

    My building has $48,000 in HOA receivables. They also just wrote off $6,000 on one unit that is uncollectible because the former owner didn’t pay for several months before they were foreclosed on.

    April 12, 2008 at 8:49 AM #185492
    jpinpb
    Participant

    That is exactly the point. 6k on one unit. Multiply that by however many units. Banks are dragging their feet for many months beyond the customary 3 months to foreclose. That’s money not going to the HOA. And probably the HOA won’t go after the former owner, true. And junior liens nowadays won’t get paid b/c properties in foreclosure have been selling far less than what is owed.

    It’s a problem that I have not seen or heard discussed much. It came up on a thread about a property in Escondido that was 70% off peak and SDR mentioned the HOAs were insolvent.

    In the situation w/the four owners in the complex carrying the costs while other owners continue to live there, that’s a real dilemma.

    And so I ask, if things continue to go bad and people walk just b/c of depreciating asset, even if they are capable of paying, then perhaps this issue will come up in other complexes that have HOAs.

    April 12, 2008 at 8:49 AM #185532
    jpinpb
    Participant

    That is exactly the point. 6k on one unit. Multiply that by however many units. Banks are dragging their feet for many months beyond the customary 3 months to foreclose. That’s money not going to the HOA. And probably the HOA won’t go after the former owner, true. And junior liens nowadays won’t get paid b/c properties in foreclosure have been selling far less than what is owed.

    It’s a problem that I have not seen or heard discussed much. It came up on a thread about a property in Escondido that was 70% off peak and SDR mentioned the HOAs were insolvent.

    In the situation w/the four owners in the complex carrying the costs while other owners continue to live there, that’s a real dilemma.

    And so I ask, if things continue to go bad and people walk just b/c of depreciating asset, even if they are capable of paying, then perhaps this issue will come up in other complexes that have HOAs.

    April 12, 2008 at 8:49 AM #185473
    jpinpb
    Participant

    That is exactly the point. 6k on one unit. Multiply that by however many units. Banks are dragging their feet for many months beyond the customary 3 months to foreclose. That’s money not going to the HOA. And probably the HOA won’t go after the former owner, true. And junior liens nowadays won’t get paid b/c properties in foreclosure have been selling far less than what is owed.

    It’s a problem that I have not seen or heard discussed much. It came up on a thread about a property in Escondido that was 70% off peak and SDR mentioned the HOAs were insolvent.

    In the situation w/the four owners in the complex carrying the costs while other owners continue to live there, that’s a real dilemma.

    And so I ask, if things continue to go bad and people walk just b/c of depreciating asset, even if they are capable of paying, then perhaps this issue will come up in other complexes that have HOAs.

    April 12, 2008 at 8:49 AM #185521
    jpinpb
    Participant

    That is exactly the point. 6k on one unit. Multiply that by however many units. Banks are dragging their feet for many months beyond the customary 3 months to foreclose. That’s money not going to the HOA. And probably the HOA won’t go after the former owner, true. And junior liens nowadays won’t get paid b/c properties in foreclosure have been selling far less than what is owed.

    It’s a problem that I have not seen or heard discussed much. It came up on a thread about a property in Escondido that was 70% off peak and SDR mentioned the HOAs were insolvent.

    In the situation w/the four owners in the complex carrying the costs while other owners continue to live there, that’s a real dilemma.

    And so I ask, if things continue to go bad and people walk just b/c of depreciating asset, even if they are capable of paying, then perhaps this issue will come up in other complexes that have HOAs.

    April 12, 2008 at 8:49 AM #185525
    jpinpb
    Participant

    That is exactly the point. 6k on one unit. Multiply that by however many units. Banks are dragging their feet for many months beyond the customary 3 months to foreclose. That’s money not going to the HOA. And probably the HOA won’t go after the former owner, true. And junior liens nowadays won’t get paid b/c properties in foreclosure have been selling far less than what is owed.

    It’s a problem that I have not seen or heard discussed much. It came up on a thread about a property in Escondido that was 70% off peak and SDR mentioned the HOAs were insolvent.

    In the situation w/the four owners in the complex carrying the costs while other owners continue to live there, that’s a real dilemma.

    And so I ask, if things continue to go bad and people walk just b/c of depreciating asset, even if they are capable of paying, then perhaps this issue will come up in other complexes that have HOAs.

    April 12, 2008 at 8:54 AM #185526
    sandiego
    Participant

    It will be a huge issue moving forward.

    All things considered, the HOA is pretty impotent in a down market. I don’t know exactly how you solve the issue if people don’t feel that they have to pay on an unsecured obligation.

    April 12, 2008 at 8:54 AM #185536
    sandiego
    Participant

    It will be a huge issue moving forward.

    All things considered, the HOA is pretty impotent in a down market. I don’t know exactly how you solve the issue if people don’t feel that they have to pay on an unsecured obligation.

    April 12, 2008 at 8:54 AM #185531
    sandiego
    Participant

    It will be a huge issue moving forward.

    All things considered, the HOA is pretty impotent in a down market. I don’t know exactly how you solve the issue if people don’t feel that they have to pay on an unsecured obligation.

    April 12, 2008 at 8:54 AM #185478
    sandiego
    Participant

    It will be a huge issue moving forward.

    All things considered, the HOA is pretty impotent in a down market. I don’t know exactly how you solve the issue if people don’t feel that they have to pay on an unsecured obligation.

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