Association Foreclosed On a Unit
Updated: August 22, 2011
Originally Posted: May 25, 2011
In an unprecedented action, Edgewater Isle has completed a foreclosure on a unit.
On April 26, 2011, the Master Association foreclosed on 2021 Vista Del Mar, a one-bedroom unit purchased by the homeowners in 2005 for $450,000. Public records show that the purchase was 100% financed (i.e., the homeowners did not have a down payment) and that both North and Master associations pursued the homeowners who had not paid dues in several years.
Public documents were recorded as follows:
| Date | Association | Amount |
|---|---|---|
| February 6, 2007 | Master Association | $1,548 |
| April 9, 2007 | North Association | $2,899 |
| May 29, 2007 | North Association | $3,764 |
| July 8, 2008 | Master Association | $1,754 |
| August 31, 2009 | Master Association | $3,024 |
| March 24, 2011 | Master Association | $8,952 |
| April 26, 2011 | Master Association: Certificate of Foreclosure Sale | $8,325 |
| August 2, 2011 | Master Association: Trustee's Deed Upon Sale |
During this time, there are also other recordings of default not related to the homeowners association.
Experts in this foreclosure process told us that during the 90-day period after the Certificate of Foreclosure Sale is issued, the Master Association cannot do anything with the property as the homeowners have the right of redemption (i.e., buy the property back). After 90 days, title will be issued in the Master Association's name, and the Master Association can evict the homeowners and sell or rent the unit as they decide. The mortgage remains the responsibility of the homeowners, and the mortgage holder can then foreclose on the Master Association to regain title of the property. The Master Association does not have a credit rating and likely will not care if the Association is foreclosed upon. But will it even get that far? Time will tell.
UPDATE: Well, yes it did get that far. The Edgewater Isle Master Association now has title to the condo. The Association can rent the property, probably on a month-to-month basis, and while awaiting for the condo's lender to foreclose on the Master Association to regain title. The lender will then sell the property. The unit is vacant, so an eviction proceeding is not necessary.
Certificate of Foreclosure Sale
Homeowner Has a 90-Day Right of Redemption
Deed Upon Sale
This document finalizes the transfer of title to the Edgewater Isle Master Association.
What's It Look Like?
A foreclosed unit often has many notices tacked to it, and 2029 Vista Del Mar is no exception.
Who's To Blame?
In the bigger picture, there is a lot of blame to go around. In this case, this unit was 100% financed, and the homeowners never had any equity. Prices have tumbled since the homeowners bought this unit. Currently a 1 bedroom is listed for (short) sale for $260,000, which is a decline of 42% in value from what the homeowners here paid.
The boards hold responsibility in this mess for failing to control dues.
The banks hold responsibility in allowing these 100% financed deals (but this occurred in 2005).
And finally, these homeowners hold responsibility: to buy a condo and not make HOA dues payments FOR YEARS is irresponsible. Most who find themselves in an untenable financial problem would sell the condo and move on. Why didn't they?
