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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: damainman who wrote (57880)	7/17/2006 1:38:34 PM
From: John Vosilla	Respond to of 306849

HOA's love it when the bank finishes foreclosure and it becomes an REO. Then it is free a clear and they have a much greater chance of collecting the monthly dues.

To: damainman who wrote (57880)	7/17/2006 1:41:34 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

If the bank forecloses on a condo, are they responsible for keeping the unit up to condo association codes? If there is a large assessment for, say, new roofs in the complex, does the bank have to pay the condo's share of the assessment? What can the association do if the bank refuses?

To: damainman who wrote (57880)	7/17/2006 3:01:06 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

As John Vosilla points out, its great news for the condo association when banks finally foreclose. I can provide one example from the last real estate valuation down-turn of a condo building in West Hollywood. By 1993, most of the condo owners owed far more on their mortgages than their condos were worth. Then the roof began to leak, and not just a little bit. Those whose units were being ruined by rain voted for a $10,000 special assessment to fix the roof, while the majority in dry units voted against fixing the roof. So no assessment was made, in spite of lawsuits. As the roof leak worsened, more and more units sustained serious damage, including common areas and the disabling of one of the elevators. Roughly 50% of the units went back to the banks in foreclosures. Once the banks were involved, the banks with other owners constituted a majority. They fixed the roof and repaired the building for $25,000 per unit - and lent the association money to cover the cost of tenants who would not pay the assessment. A lien was placed on their title. The banks offered these units in 1995 for $55k for a studio, $114k for a one bedroom and $135k for a two bedroom. Quite a reduction from the $315k, $390k and $460k these units had commanded at the peak in 1989. As they remained on the market for 9+ months, the banks offered reduced-rate 100% mortgages to qualified customers and would pay all assessments which might be made during the next 12 months. Although bank foreclosures reveal the real current price for condos in a given building, bank foreclosures are a real bonus for condo buildings as impoverished owners are replaced by a bank with deep-pockets. .