Who Will Pay The HOA Fees?
Another Bonita Springs short sale bites the dust. It had been about of three months and still no word from the bank besides “maybe next week”. The bank had “maybe-next-weeked-us” for half of those nearly three months.
The buyer, who was not the first buyer to grow tired of waiting on this home, woke up on one random Wednesday and decided that it was more bother than it was worth. He then forfeited his place in line to buy this home, passing the baton to the next back up buyer.
Here we are years into this housing and economic crisis and everything is still the same as far as dealing with lenders and short sales. There has been absolutely no evolution to the process. I don’t know about you but I really can’t imagine running a business, such as a financial institution, and not eventually figuring out systems to liquidate these “assets”.
The waiting game is a huge deal killer. Buyers lose patience waiting and since there is little to no communication with the bank, the silence makes it seem as though nothing is being done. With no foreseeable end in sight the buyers either give up or they start shopping elsewhere.
The buyers aren’t scarce. The buyers are out there writing contracts. Unfortunately, the contract is about as far as some of them ever get. The banks still don’t get it. If there is more than one mortgage it’s a hornet’s nest. Throw in an investor that has an interest in the property into the mix and watch out. Investors like to charge buyers per diem rates if the property doesn’t close on time. How’s that for gratitude for buying a distressed property?
Further complicating the process for buyers has been the economic ripple effect and the job losses. There probably isn’t a real estate agent that hasn’t had a short sale contract cancelled because, during the course of waiting many moons for an approval from the lender, the buyer is laid off or loses their job. The buyer no longer qualifies for the loan.
It’s an economic influenza that just continues to spread because the source of the contamination hasn’t been treated. The banks remain the source of the sickness and their inability to liquidate their distressed homes is causing the spread of the illness.
If you think you’re not affected because you’re not currently buying or selling a home you’re wrong. Those sick banks continue to sneeze on property values and home owner associations and they’re getting them sick, too.
The banks can take their sweet time closing on a deal because they’re feet aren’t held to the fire to pay beyond six months of back HOA fees if the home is foreclosed. If it’s a short sale they can just refuse to pay all or part of the fees. The homes that slip into foreclosure rinse off a few years of back fees and your HOA eats the loss.
There’s an estimated one million option adjustable rate mortgages poised to reset in the next two years. Clearly the banks are not ready. Is your home owner association prepared to shoulder the expense of floating bank owned properties and short sales that default on their HOA fees?
Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area. Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor. If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.
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