Waterford Lakes COA Manager Ken Zook said they are fighting foreclosure by standing up to the banks
Waterford Lakes isn’t going to be pushed around anymore, said Community Association Manager Ken Zook about the banks dragging their feet on the foreclosure process.
The longer abandoned homes sit vacant, the more money homeowner associations such as Waterford Lakes must pay in maintenance fees to keep the neighborhood in good repair.
Waterford Lakes is one of the few associations taking the banks to court for not expediently collecting titles to foreclosed homes, said Waterford Lakes Community Association Attorney Matt Firestone, of Pohl and Short, PA in Winter Park.
“You can recoup some of the costs through reward in the case, but you’re never going to get all of it back. The theory is that you get some, and what you don’t get back, you’ll make up for by accelerating the foreclosure process. In 99 percent of cases, the only way you’re going to get back assessments is if the lender takes the title.”
Firestone said he has some cases where the foreclosure has been pending since 2007. He explained that the banks have so many properties on their books, that they are slow to take on more, and that the court system is so clogged that they don’t notice when foreclosure proceedings become stagnant.
In January, the association went to court for three separate properties, and each time, the court sided with the association, granted them sanctions against the banks and scheduled the foreclosure. Because it’s been so successful, Zook said they plan to bring more banks to court.
“The only people who can help with [moving the foreclosure forward] is the homeowner or the HOA,” Firestone said. “The owner’s not going to do that, so the only party that’s maybe going to gain by moving it forward is the HOA.”
Waterford Lakes has had the title to one property for two years. The association only filed lien foreclosure against the home — which is legal in Florida when a homeowner falls behind in making association payments — to coax the owner into paying back fees, but the owner unexpectedly died, and the association got stuck with the title to his home. The home, which is in complete disrepair and not able to be leased, has cost the association $3,000 in basic maintenance to keep it from becoming an eye sore.
Zook said this property was the catalyst for their battles with the banks.
“There are so many foreclosures, and when the bank doesn’t want it and the community doesn’t want it, it just sits. The banks need to step up,” Zook said.
Because going to court is costly, Firestone said an association should only pursue such a case if they are going to recoup some of those funds.
“If you don’t push the case and six months later the property is sold in a foreclosure sale, then you made the right choice. But the larger the amount of the assessments, the more it makes sense to push the case,” he said.
A threat can go a long way
While Waterford is one of the few associations going after the banks, it is one of many threatening to take titles to encourage the homeowner to pay up.
Avalon Park Homeowner Association President Tracy Durham said she gets requests from Avalon’s collections department daily for foreclosure liens. The HOA moves forward with 90 percent of them “because if you don’t and you sit on it, they won’t pay,” she said, adding that it results in payment from the homeowner 90 percent of time and that the HOA has only taken titles a handful of times.
“That’s a win for us because we want people to stay in their homes. You don’t want to go around taking people’s homes from them,” Durham said.
Taking home titles can be a liability, Firestone said. The Eastwood Community Association has the title to one foreclosed home but their attorney advised them not to move forward with any more for legal reasons.
Firestone said the disadvantages include initial costs such as attorney fees, property liability and maintenance fees if the association owns the property for an extended period of time.
Eastwood association manager Cheryl Drake said that in the meantime, they’ll have to hold off on taking titles.
“It might be something they’ll look into again in the future,” she said.