Sept. 16 (Source: By Paul Owers, Sun Sentinel, Fort Lauderdale, Fla.) - Board-certified real estate attorney Gary M. Singer answers housing questions in this space each Friday.
Q: I am in foreclosure and trying to complete a short sale. I have been paying my homeowner?s association dues every month, so I didn?t think I owed anything to the HOA. But the lender approved my short sale, and a few days before closing I found out that I owe the association?s attorney $500 for ?monitoring? the bank?s foreclosure lawsuit. Can it make me pay this? ? George
A: Yes ? if you want the short sale to go through. For what it?s worth, it?s been my experience that the homeowner?s association is the No. 1 killer of these deals. I routinely advise my clients to stay current on their dues with the HOA, even if they are forced to fall behind on their mortgage. But there?s a developing trend in which the HOA?s attorney is charging a homeowner completing a short sale a fee to monitor and appear on the HOA?s behalf in the lender?s foreclosure lawsuit. The lawyer is allowed to do this because a homeowner in an association is liable to reimburse the association for all attorney fees and costs. In the case of a mortgage foreclosure, the association is named in the lawsuit and must respond to it and monitor it. A successful short sale is in your association?s and your lender?s best interests, so you may be able to negotiate a reduced fee. Still, it?s a good idea to set aside some money for expenses such as this when you are planning a short sale.
Q: The bank has filed foreclosure against my property. I don?t want it anymore. I owe about the same amount on the loan that the home is worth. I have repeatedly contacted the bank about saving us both the trouble and having it take back the property via a deed in lieu of foreclosure. Can you shed any light on this? ? David
A: I absolutely agree that from the homeowner?s point of view, this seems absurd. However, there are many reasons why the bank can?t simply take back your home, even if it wanted to. You may have other liens, a second mortgage, or past-due association fees that also may need to be foreclosed upon. Also, many loans have mortgage insurance policies in place, and if your lender does not follow very specific procedures, the mortgage insurers will deny the claim. Your loan may be serviced by a company that is not the actual lender. It is not always in the best financial interest of the servicing company to quickly resolve your foreclosure, as it makes money from servicing the loan during the foreclosure process. Also, if a servicing company is involved and it does want to get a deed for the property, it has to get the actual lender?s approval to do so. Many times, these ?lenders? are actually complex trust agreements that are sold on Wall Street as securities and have complicated rules and guidelines that must be followed before anything can be worked out with the borrower.
Q: We bought a house a couple of years ago. Recently, city code enforcement informed us that our back room is actually a closed-in porch that was done without permits and does not meet codes. We had no idea about any of this because this apparently was done before the previous owner had the house. The city is telling us that we need to have the room torn down and a new one put in properly. Or we need to change it back to a porch. Can we make a title insurance claim or do we have some other recourse? ? Anne
A: Unfortunately, no. A title insurance claim is unlikely to work because title insurance doesn?t cover issues not related to your ownership in the property. You don?t have any recourse against the previous owner. It?s not fair, but the expense of remedying this will fall on your shoulders. If you can?t afford to fix this, the home may be subject to fines until the violation is addressed. Check with city officials, who may be able to work with you to resolve the issue. I also recommend that you speak to an attorney experienced in these matters.
The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed, nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.
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(c)2011 the Sun Sentinel (Fort Lauderdale, Fla.)
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Distributed by MCT Information Services
A service of YellowBrix, Inc. Publication date: 2011-09-16
Source: By Paul Owers, Sun Sentinel, Fort Lauderdale, Fla.
LoanSafe.org is America's #1 consumer mortgage forum with over 32,000 members. Get the latest news, information and tips from an online community you can trust.Source: http://www.loansafe.org/ask-a-real-estate-pro-hoa-wants-500-for-monitoring-foreclosure
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