Homeowners should make a point to understand what their Home Owners Association (HOA) is doing, especially in arena of dealing with salvaging fees from homeowners in foreclosure.
ZERO Recovery Forever Instead Of Thousands Now
Some Homeowner Associations prefer to get ZERO dollars if the house goes to foreclosure rather than thousands of dollars NOW in a short sale.
As a short sale Realtor, I have gotten foreclosing lenders to pay thousands of dollars to cover settlements on large delinquent HOA balances. However, some HOA's have all-or-nothing "no-settlement" policies. The HOA wants every cent including legal fees or let the house go to foreclosure where they get ZERO.
In addition, a successful short sale gets a new paying resident in the house NOW. A foreclosure can cause a house to sit vacant for a year or longer.
Push Your Neighbors Over The Cliff Then Slip And Fall Over With Them
By refusing to accept multi-thousand dollar settlements, HOA's are putting the final nail in the foreclosure coffin of houses in their subdivision.
These HOA "no-settlement" policies cause;
- More vacant houses in the subdivision, thereby diminishing property values even more.
- Hurts the reputation of the subdivision because of higher frequency of foreclosure.
- The HOA and the other homeowners recoup ZERO instead of thousands, thereby denying extra funds to the HOA treasury that could help lower dues for the other homeowners or increase services.
- More foreclosures in the subdivision, which usually sell for far less than short sales, thereby further lowering property values for the remaining residents. This also hurts the board members who make the no-settlement rules. Board members eventually have to sell, too, unless they are outsiders that somehow are appointed to the job.
- Keeping the foreclosure process alive often causes the HOA to run up avoidable additional attorneys fees that result in ZERO recovery.
As a short sale Realtor, I can only help those who are willing to be helped. I have helped HOA's and their constituent residents recover thousands. I cannot help HOA's that refuse to be helped and who turn down thousands of dollars.
Do you think the other residents in the subdivision know that their HOA Board or management company is turning down thousands of dollars in their name?
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