South Florida Court Voids $180K+ Mortgage As Foot-Dragging Lender Walks Away From Unwanted Collateral; HOA Makes Off With Free & Clear Condo

In Pompano Beach, Florida, the South Florida Sun Sentinel reports:

• After winning a lawsuit against Wells Fargo that claimed the bank purposely delayed foreclosure proceedings on a condominium unit for more than a year, a Pompano Beach condo association has been awarded title to the unit without owing a dime on the original $184,400 mortgage.

• The case, brought by the Palm Aire Gardens Condominium Association, is being seen as a precedent that could pave the way for other condo associations facing similar foreclosure delays.

• "Banks are delaying foreclosures and abusing the process and our association is struggling financially because of it, that's why we filed our lawsuit.'' said Palm Aire Gardens President Oscar Garcia. "Now we own the property free and clear of the mortgage, which gives us options to sell it or rent it.'' Wells Fargo did not respond to requests for comment.

• Palm Aire's legal strategy is being dubbed "The Mortgage Terminator'' by the Association Law Group, the South Florida firm that represents the condo complex and hundreds of others across the state. "Many of our association clients are already starting to use it,'' said attorney Ben Solomon, of Association Law Group. "The only criteria is that the association has title to the unit through its own foreclosure process and the mortgage holder has not initiated foreclosure yet.''

***

• Solomon said his firm aimed to help the association financially by forcing the lender, Wells Fargo, to either foreclose on the loan and pay its share of unpaid maintenance fees or, instead, agree to release its mortgage and walk away. According to three court judgments already won by Association Law Group, including another issued last week on the behalf of Palm Aire Gardens, the bank cannot later try to collect on the original loan amount from the association.(1)

For the story, see New legal tactic helps associations gain control of abandoned condos.

(1) According to the story, Solomon noted that the bank still has a right to go after the original borrower (who abandoned the property) for the outstanding balance on the loan, but it cannot sue the association for that loan amount.