So we've been following a new trend for the past few months. HOAs and Condo Associations in the Jacksonville real estate market have been moving to foreclose on properties for past due association fees. Most homeowners are clueless, never suspecting that they can actually DO that. We have seen several short sale sellers who are in the midst of a HOA foreclosure. In our business we have seen that more often than not, homeowners quit paying their HOA or Condo Association dues before they quit paying their lender. They figure that the association is the lesser of the evils. Well...maybe not.
We have been watching these properties enter the foreclosure funnel and waited to see what happens when they start to emerge on the other side.
We got a call this week from a distraught homeowner. They had purchased a home for a great deal from a HOA that had foreclosed. They got a great deal on the property and all was well...until....well the lender still has a legal right to the property that was mortgaged.
Speaking with this unfortunate homeowner, we found out that the bank is now moving to foreclose on their new Jacksonville home. The bank will not even talk to them since they were not a party to the loan.
We would have loved to help them with a short sale of this Jacksonville property...but with the bank not cooperating with the current owner...there is nothing we can do to sell their property without having the original homeowner, who has already been foreclosed on, request that the bank talk to us and them. Even if the current owner is able to track down the previous owner...the likelihood of them cooperating is probably slim to none since they have already been foreclosed on and moved on.
We asked this owner if they had title insurance. They apparently had been told that you couldn't get title insurance on a foreclosed property. Not true. However, we are not sure why this buyer was not made aware, during this process, that the bank still had to be paid. It is apparent that they believed that they owned the home free and clear and got a great deal!
We feel for this Jacksonville homeowner, but all we can do to help is suggest that they contact a competent and knowledgeable real estate attorney regarding this situation. Buyers of foreclosures should be working with a competent Jacksonville real estate agent to buy their property. We also suggest a competent closing attorney be used to close the deal.
This is just another nasty part of the fallout of the current real estate market. Buyer beware!