By Laura Gottesdiener / Alternet
blogging4jobs.com
It’s payback time—literally. In Florida, hundreds of homeowner and neighborhood associations are foreclosing on banks that have failed to upkeep their repossessed properties, according to—of all things— a CNN Money report.
Florida is one of the states hardest hit by foreclosures, and there are nearly a half-million foreclosed houses now standing vacant and often slowly deteriorating. When a bank forecloses on a house, evicts the family and then repossesses the property, it also assumes responsibility for maintaining the home and yard and paying homeowner or condo association fees. Yet, some of the nation’s largest and richest banks have been unable or unwilling to upkeep their properties—prompting neighbors across Florida to declare enough is enough.
One Miami lawyer, Ben Solomon, has filed more than 1,000 liens against banks for failing to maintain their properties or pay their homeowner association fees. And when the recalcitrant banks don’t comply, Solomon slaps them with a foreclosure notice—131 thus far.
The push to hold banks accountable for their properties isn’t simply sweet justice against the world’s worst neighbors. Unmaintained properties create a host of problems for the surrounding neighborhood—problems that Bank of America, JP Morgan, U.S. Bank and other major Wall Street institutions are going to have to start dealing with if they want to continue foreclosing on and repossessing millions of homes across the United States. First off, an unmaintained property drives down the values of all surrounding homes, further putting neighboring homeowners at risk of default. (Multiple studies have shown that underwater homeowners are more likely to default than those who do not owe more on their mortgage than their homes are worth.) Secondly, vacant, foreclosed homes increase crime, adding an extra expense for strapped city budgets and putting the whole neighborhood at risk. Third, in neighborhoods homeowners associations, other families end up paying extra for things like water and garbage pickup because major global corporations like Deutsche Bank can’t even pitch in their fair share of the community expense. Adding insult to injury, banks are far more likely to leave properties unmaintained in neighborhoods of color, according to a report by the National Fair Housing Alliance.
Solomon has already won tens of thousands of dollars from some of the nation’s largest banks—and even foreclosed on one mortgage servicing company, NovaStar, for failing to maintain its house in the Keys Gate Community Association in Homestead, Florida.
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The banks deserve a taste of their own medicine. HOAs need to jump on their cases in order to collect what is due them. Not only are the banks not paying HOA dues, but the previous owners were probably thousands of dollars delinquent when they were foreclosed on. This puts an additional burden on other members of the HOA. Their dues have to go up to compensate for the bank deadbeats.
They should be held to account for not paying dues. They are coasting off the backs of every one else in the association. They figure they will pay when it is convenient for them because they can get away with it. Everyone else must pay on time though?
Interesting. I am not sure, but I think a principal difference between there (USA) and here (Oz) is that the banks here wrap up the mortgagors assets in their entirety, not just the house in question, so its easier for an American to walk away from a delinquent loan with the rest of their assets (motor car, other real property & future earnings) intact, while the banks here have the luxury of bankruptcy proceedings available to them.
I also dont know exactly what these HOAs are, and how they are structured. Maybe they are a form of local govt? Once a property gets into such a state it requires demolition, here in Oz it becomes the local govt’s statutory responsibility (and ratepayers liability). I know of one case (Millaa Millaa Cheese Factory) where the Bank of Queensland as mortgagee in possession eventually refused to pay rates, repairs, insurance, & indicated refusal to demolish the bdg, then ducked all responsibility by handing it back free of debt to the defaulting owner, a family trust with no assets. It was a relatively big bdg, and the local council to avoid liability issues involving trespassing kids possibly injuring themselves, got stuck with making the site safe which cost over $200,000 for demolition. The demolition related costs became a debt against the property, along w the unpaid rates, so the now vacant land then ended up on an auctioneer’s list with others whose rates were unpaid, and the bank? Well, the bank never got the loan repaid, of course, but they did get to stick it to the ratepayers for the demolition
Finally…Lets hope the Banks give a giant bitch slap to these repugnant HOAs.
Strip them of their power to hurt homeowners, make them go back to mowing the grass and paying the bills.
Create laws that provide criminal consequences to the epidemic stealing and embezzelment that is going on in HOAs, and the ignoring of laws that should protect homeowners from their insane capricious conduct.
HOAs need to die a violent death, I hope the banks use their power to do it.
HOOOO Ray for the H O A !!
It’s about time Big Banks became liable for the hurt they are causing to families and neighborhoods by not maintaining the properties they have taken back for whatever reason…
Every city in the country ought to enact laws that hold the new ‘owners’ responsible for keeping up the neighborhood…. We cannot depend on the US Congress to enact these laws as the Banking Lobbies are too powerful and congress is just too willing and beholdn’ to get the job done… so the cities and counties must enact these laws…
Let’s get it done Mr Filner… and the same goes for leaders in the other communities of Sand Diego County…
It’s about time… !
Signed.
Dave Beekman
Spring Valley Ca