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Condo Trap and Double Dip
Old 12-30-2010, 07:14 AM   #1
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Condo Trap and Double Dip

Major problems with condos for 2011

Four Real Estate Market Predictions for Homebuyers in 2011

Check item #3. I am extremely aware of this as we just lost a sale on our MI condo because the number of delinquents are now too high. This dashes our hopes to retire in FL. We are currently in FL and have been looking at properties but now have made plans to return to MI and the snow. It also leaves me in fear of ever rising condo fees.

But on a less personal level perhaps a greater problem may be in progress. In our complex most of the delinquent accounts are banks or fannie mae that have taken over foreclosures and now refuse to pay the HOA fees. This is a vicious cycle as it locks out the ability for residents to sell and creates more forclosures - etc. etc. I know my experience is anecdotal but I have to assume this is going on in many places. I feel that this problem will greatly add to the housing problem in 2011 and perhaps create a double dip in housing.

Between this bank created problem and the shadow inventory of houses the banks must put on the market soon - it looks to me like we are not out of the woods no matter what the economists are saying.
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Old 12-30-2010, 08:08 AM   #2
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Have not read the article yet.... but doesn't your condo put a lien on the units that are not paying HOA It might not be something that helps out right now, but I think that the HOA would get its money at some time... heck, from what I know the HOA can foreclose even if the bank or Fannie own the property...

Do this enough and they will start to pay...
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Old 12-30-2010, 08:13 AM   #3
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I hope your HOA is being aggressive with the lenders who have foreclosed, now own the property, and aren't paying HOA fees. Be sure that they are filing any necessary liens so the dues at least get paid when the bank sells. If things move too slowly, as Tex says, the HOA should start to foreclose the liens to force the issue.

I think states vary on whether HOA liens incurred prior to foreclosure take priority over a mortgage. In states where they don't this could create a very, very serious problem if too many owners both don't pay dues and don't pay their mortgage.

Either way, your HOA needs to get on top of this and take an aggressive stance.

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Old 12-30-2010, 08:14 AM   #4
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I was not aware of these types of factors Condo fees (or HOA).
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Old 12-30-2010, 08:57 AM   #5
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I bought a condo five yrs ago and, knowing what I know now, I would never never buy another one. I've lost count of the reasons.
And if I claim to be a wise man, it surely means that I don't know.
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Old 12-30-2010, 09:01 AM   #6
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Thanks for posting. This will be one more thing that I'll be checking if we decide to buy a condo.
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