HOA Legi-Slate

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!

Posted By Melissa M. Garcia In Foreclosures 2 Comments Permalink

What happens when utilities are turned off in the winter and the area experiences a freeze?  Pipes burst of course.  What happens when you own a unit in a condo and the unit above you is in foreclosure, the property has been abandoned, the utilities have been turned off and the area experiences a freeze?  Pipes burst and the homeowners around and under the unit are forced to contend with flooding.  7 News reported on an elderly couple who were left to deal with the aftermath of such a water intrusion.

1. Determine whether the association has any contact information for the owners who abandoned the unit and attempt to make contact with them to ensure the unit is winterized. 
2. Inform the attorney handling the lender's foreclosure when a unit has been abandoned and ask that immediate steps be taken to winterize the unit.
3. Review the Declaration to determine if there is a provision which allows the association to enter the unit for inspection or emergency purposes.  If so, seek legal guidance to determine whether the association has the authority to take remedial steps.

Posted By Molly Foley-Healy In Foreclosures 0 Comments Permalink

The Colorado Supreme Court recently issued a ruling in B.B. & C. Partnership v. Edelweiss Condominium Association, holding that a party taking title to real property through adverse possession cannot do so free and clear of the restrictions in a recorded condominium declaration. The party at issue was an original member of BB&C, the declarant, and thereafter the association's managing agent for 20 years. BB&C acquired title to an association parking space by adverse possession, and then tried to resell the space to a third party, non-owner, free and clear of the terms of the declaration. The Supreme Court held that any title obtained by BB&C through adverse possession would be subject to the terms of the association's declaration. In this case, the declaration prevented the sale of a common element parking space to a non-condominium owner.

This is important because with the increase in owners taking title following a foreclosure or quiet title lawsuit, associations should be diligent in informing new owners that along with ownership comes obligations and responsibilities as set forth in the association's governing documents.

Posted By Jonah G. Hunt In Foreclosures 0 Comments Permalink

As we reported in November, Fannie Mae imposed a temporary halt to all foreclosures through January 9, 2009 on loans owned or guaranteed by Fannie Mae.  Yesterday this temporary halt was extended to January 31, 2009.  Click here to read the complete lender letter.

Posted By Loura K. Sanchez In Foreclosures 0 Comments Permalink

Several months ago I blogged that Fannie Mae had amended its guidelines regarding eligible condominium projects. In response to current market conditions Announcement 08-34, issued earlier this month, includes the following revisions:

1. The 15% delinquency cap requires that no more than 15% of the total units may be more than 30 days delinquent;
2. There must be fidelity insurance if there are more than 20 units in the project;
3. Borrowers must obtain a “walls-in” coverage policy (commonly known as HO-6 policy) unless the lender can document that the master policy of the Association provides the same interior unit coverage;
4. Master insurance policies covering multiple unrelated condominiums are no longer acceptable (if they ever were); and
5. The owner occupancy ratio of 51% includes REO owned units for sale as owner occupied units.

Posted By Loura K. Sanchez In Foreclosures 0 Comments Permalink

A recent study “Understanding Mortgage Foreclosures in Denver”, conducted by the Office of Economic Development (OED) of the City and County of Denver, confirms what we have known for some time.  The rate of houses in our communities going into foreclosure has skyrocketed.  Between 2000 and 2006, the number of foreclosure filings in Denver alone increased more than four-fold, from 917 to 4,745.

The OED study provides a wealth of statistics and information.  However, it falls short of proposing the definitive solution to the problem. As Americans we are indoctrinated with the assumption that purchasing a home is the safest investment one can make in one’s lifetime.  Today that may not always be the case.  What is the cause of the current foreclosure crisis in our communities?  Is it the fault of predatory lenders? Are the uneducated and financially unaware buyers to blame?  I submit that the solution can be found within.

Living within one’s means is an invaluable survival tool in the current economy.  An anonymous quote found in the OED study sums up the way this tool is applied to the purchase and financing of real property: “Fall in love with the loan and not the property.”  If you are looking to buy another home or investment property, do your homework.  Ask questions if you do not understand the paperwork the lender has provided to you.  Shop around for a better deal. No one has your best interest at heart more than you.

Posted By Eric R. McLennan In Foreclosures 3 Comments Permalink

You only need to turn on the television, open a newspaper, or go online to know the foreclosure crisis is continuing to make headlines across the nation.  In fact, just today, President Bush unveiled a foreclosure relief plan aimed at stemming the tide of foreclosures resulting from adjustable rate mortgages.  The impact of the rising numbers of foreclosures on assessments in homeowners associations is also making news.  9NEWS posted a story that cites the foreclosure crisis as one of the triggers for assessment increases in Colorado.  Only time will tell the extent to which foreclosures will affect assessment hikes in associations.  

Also, as a reminder, the revisions to Colorado's foreclosure law will go into effect on January 1, 2008.  To learn more about how the changes will affect community associations, check out our December 2007 edition of Community Essentials.

Posted By Molly Foley-Healy In Foreclosures 1 Comments Permalink

Sponsored by House Assistant Majority Leader Representative Michael Garcia and Senator Jennifer Veiga, House Bill 07-1157 – “Concerning Real Estate Foreclosures” – is a clean-up of last year’s sweeping foreclosure reform bill. The intent of last year’s bill, discussed in detail here, was to modernize and simplify Colorado’s foreclosure process and to grant owners a higher likelihood of retaining their property.

HB 07-1157, which is now in the Senate, passed in the Senate Business, Labor, & Technology Committee yesterday afternoon and will return to the Senate for a second reading. (The members of the Senate Business, Labor, & Technology Committee are Senators Veiga (D), Chair; Tochtrop (D), Vice Chair; Kester (R), Schwartz (D), Takis (D), Taylor (R), and Wiens (R).) Representative Garcia has worked hard to contain the contents of this bill to “clean-up” items on which stakeholders have reached consensus. This limitation to include only consensus items means that any outstanding issues arising from last year’s bill that need to be addressed will have to be done by another avenue (such as a late bill). Among the amendments proposed by HB 1157:

• Making an allowance for courts in an action for unlawful detention of real property following a foreclosure sale to dispense with appearances by the plaintiff and a hearing under certain circumstances,
• Entitling a public trustee to fees for processing a rescission of a foreclosure sale and for rescheduling a sale after a rescission, and
• Allowing a successful bidder at a foreclosure sale to rescind the sale without a court order if the rescission is made within 8 business days after the sale.

Posted By HindmanSanchez In Foreclosures 0 Comments Permalink

On June 1, the Governor signed HB 1387, which brings numerous revisions to Colorado's foreclosure law. The law's intent is to simplify the process of foreclosures in Colorado, as well as providing owners with a better opportunity to keep their property. (The law's more significant amendments are discussed in this post.) Most of the law will not take effect until July 1, 2007, with a few provisions taking effect on July 1, 2006. Although the new law may affect associations who have units in foreclosure, associations do not have to take affirmative steps to comply with the amendments - except to ensure that their foreclosure attorney is up on all the changes.

Posted By HindmanSanchez In Foreclosures 1 Comments Permalink

As reported last month in this post, Colorado led the nation in foreclosures for the month of March. This Rocky Mountain News article reports that, unfortunately, Colorado has retained this spot for the month of April. As discussed in this post, a bill is before the Governor that proposes several changes to Colorado's foreclosure laws. It is hoped that several of these changes will help owners to keep their homes. It will be interesting to see how this proposed foreclosure bill may affect Colorado's foreclosure numbers if signed into law.

Posted By HindmanSanchez In Colorado Homeowner Association Law , Foreclosures , Legislative Miscellaneous 0 Comments Permalink

House Bill 06-1387, which passed its third reading in the Senate on May 3, 2006, but which has not yet been signed into law, contains numerous proposed revisions to Colorado's foreclosure laws (C.R.S. § 38-38-101, et seq.). The bill is now on its way to the Governor for consideration. The intent of the bill is to modernize and simplify the process of foreclosures within Colorado, while also providing owners with a more realistic opportunity to retain ownership of their property. The most significant change to the bill as it relates to community associations is the expansion of the time in which to cure and the elimination of the owner's right to redeem.

Posted By Loura K. Sanchez In Colorado Homeowner Association Law , Foreclosures , Legislative Miscellaneous 0 Comments Permalink

This Denver Post article reports that Colorado had the highest ratio of foreclosures in the country this past March. Hopefully, if HB 06-1387, entitled 'Concerning Real Estate Foreclosures,' passes, the number of foreclosures in Colorado will decrease. Sponsored by Representative Garcia and Senator Veiga, the bill would allow the homeowner a longer period to cure a default before the foreclosure sale by lengthening the pre-sale cure period by 65 days. (Currently it is 45 to 60 days.) To do this, the owners' redemption period, currently 75 days after the sale, would be eliminated. Public trustee sales would, therefore, occur 110-125 days after the recording of the Notice of Election and Demand ("NED"). Click here for a summary of the Colorado foreclosure process.

Posted By HindmanSanchez In Foreclosures , Legislative Miscellaneous 0 Comments Permalink