Foreclosing Mortgage Lenders Now Facing Foreclosure Themselves?

In Miami, Florida, the Miami Daily Business Review reports:

• Condo associations that are in a financial bind from mounting foreclosures are now targeting lenders who have taken back units from owners in default but are themselves failing to pay their share of maintenance fees. As more units end up in the hands of lenders, the banks and mortgage servicing companies are responsible for maintenance payments for those units. But administering the growing pool of real estate has proved challenging for lenders.

• The Residences at the Bath Club Condominium Association in Miami Beach is pressing a foreclosure action against Wells Fargo as trustee for an investment pool that owns the mortgage on a unit that isn’t paying its maintenance fees. The lender owes $32,252 in late maintenance fees on the unit it took back more than a year ago.

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• In a recent statewide community association survey, more than 60 percent of respondents said lenders owning foreclosed units or homes in their communities are not paying dues to the associations.

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• Attorney Paul Breitner, who represents community associations, said lenders are finding a way around having to pay association dues. They initiate foreclosure procedures but don’t seek a final judgment. That way, they avoid taking title to the property. “We increasingly see banks reluctant to take control of a unit,” said Breitner, with The Barthet Firm in Miami. “They would rather keep a unit in limbo and wait until the market comes back.”

For more, see Association turns the tables on bank.

Go here for the Miami court's foreclosure judgment ordering that the exclusive Miami Beach oceanfront condo (which sold for $1.45 million at the height of the market boom) that Wells Fargo acquired through foreclosure be sold at public auction because of its stiffing of the condo association out of $32K in maintenance fees.