Can a Bank Be Fined for Purposely Delaying a Foreclosure Sale?
Does your association have a number of Units in foreclosure limbo (i.e., foreclosure action pending, owner not paying, bank not taking title)? If so, do you think a bank can be fined for delays in condominium foreclosure sales? In Florida, a District Court says yes. Click here to read an article regarding the Miami-Dade ruling.
In the Miami-Dade ruling, the bank was sanctioned to pay roughly $7300 to the association, including an additional $2000 to cover its legal fees. The sanction was for improper conduct which delayed the foreclosure sale, including not sending a representative to a foreclosure sale and not publishing timely notice of the sale, both of which resulted in the automatic cancellation of the the sale.
Why would a bank want to delay a condominium foreclosure case? The reason suggested by the association in the Miami-Dade ruling is that a bank isn't responsible for any assessments that accrue until the bank takes title to the Unit. Delay the sale, delay any payments owed.
Although the Florida decision does not set precedent, sanctions for improper delays certainly would be a useful tool to quicken the foreclosure process!
We have all been plagued by lenders who drag their feet. Sure, we get the 6 months, but the owner is usually far-more delinquent than that, and the fees just add up as the bank resets the date for the PT sale. I believe the reason is, in most cases, exactly as the article says. In order to stop that, has anyone proposed a solution here? I think that our legislature should take action to protect the fiscal assets of HOAs by doing something substantive, not just requiring a Reserve Study (as if they even know what that is). How about this: The HOA gets the amount of delinquent dues OR the Super Lien, whichever is less. And if the lender postpones the PT sale, it owes the dues for each month that the sale was postponed. There could be exceptions, which could be written into the bill. That would pretty much take care of this issue.
We would encourage an aggressive investigation/action against Banks or other Mortagage Companiew that are playing this game.
On the surface, it appears that Colorado Financial Institutions are playing this same game!
"Postpone" has become the operative word and typically the HOA has the short end of the stick. Absolutely, the legislature should become involved to protect HOA's across Colorado from this clear and obviouls abuse of the system. Perhaps Hindman and Sanchez, with their vast knowledge of the financial players abusing the system and the HOA's expriencing this problem should create a class action lawsuit against one of these lendors.