Homeowner associations (HOAs) and unscrupulous real estate investors are riding the wave of misfortune in the distressed housing market–all the way to the bank. As illustrated in a recent St. Petersburg Times article concerning this latest practice, HOAs are racing to file a foreclosure action against homeowners who are behind on their HOA dues before the bank lender initiates foreclosure on the mortgage. If the HOA can obtain a final judgment before the bank, it can then sell the property at auction to try to recoup the delinquent fees.
Real estate investors then purchase such homes at public auction, often for pennies on the dollar, and subsequently they rent the homes until the bank catches up and forecloses. Tenants are seldom notified by these investor-landlords of the impending bank foreclosure, and they are often shocked when they are served with an eviction notice. Like the homeowners before them, the tenants are then are forced to find a new place to live in a very short time and must scramble to find the money for a new deposit and moving costs.
One HOA foreclosure investor, who was convicted in 1999 and served time in state prison for armed robbery, boasted in the St. Petersburg Times article that he was able to purchase a $700,000 property for merely $7,000. Another investor featured in the article is also a former inmate; he was indicted for Medicare fraud to the tune of $14 million.
The attorneys at PERENICH The Law Firm have more than 20 years of experience representing homeowners facing foreclosure on their homes, whether by the lender or an HOA. We work to help homeowners remain in their homes by fighting the foreclosure as well as trying to negotiate a loan modification or short sale. Depending on the situation, bankruptcy can also allow homeowners to keep their home and reinstate their mortgage.