Question: What can we do with bank owned properties?
Answer: Bank owned properties are becoming more and more common in community associations because the rate of foreclosures is not declining and the real estate market is not moving homes quickly. Unfortunately, many of these homes are often vacant for long periods, may have yards full of weeds, maintenance issues, and assessments may not have been paid in months.
Fortunately, if your association is having problems with bank owned properties, here are several good options for solving these problems. These include :
- Treating the bank like any other owner – don’t wait for a sale to get paid;
- Using liens to ensure payment of assessments and correction of covenant violations;
- Aggressively pursuing foreclosures if the banks refuse to pay after you have completed the procedures outlined in your collection policy.
Since there is no longer a mortgage against a bank-owned property, any association lien will be in first position. This means it is extremely likely the association will be paid quickly after a foreclosure action begins. If the owner-bank does not pay the association in full and a foreclosure sale is completed, the association would end up owning the property FREE and CLEAR! No mortgage, nothing to pay.
Foreclosures or bank owned properties are a sharp tool in associations’ collection tool boxes and should not be overlooked. To discuss this option in more detail, contact our foreclosure attorney.