WANT TO BUY A CHEAP CONDO?

Prior to the foreclosure crisis, if a homeowner fell behind in their condo or homeowner association maintenance payments, the association filed a lien which the unit owner almost always paid, plus interest, late fees and attorney fees, to save their home.  The lien was paid because the owner did not want to lose her home.  After the foreclosure crisis many homeowners saw they were losing their homes, making the failure to pay maintenance less threatening.

It became a trend in community association law that associations began foreclosing liens.  When the association foreclosed the unit still carried the unpaid mortgage.  The associations were in a position where they were not receiving the necessary revenue to maintain the common property and those members who paid were suffering due to the owners who were not, because the payors were footing the bill.

By completing their foreclosure before the bank who held the mortgage the association could take the unit and rent it to pay itself back the money it was owed.

For purposes of example, let us say the condominium is worth $75,000.  The association is owed $15,000.  At the end of the foreclosure the association has a judgment for $15,000.  That is the first bid.

Enter the scammers, companies who find people who have $15,000 cash and tell them they can purchase a $75,000 condo for $15,000 cash, what a bargain!  What did the company leave out?  The fact there is a $250,000 first mortgage sitting on this property, also in foreclosure. 

The result is you have a saver who managed to put together at least $15,000 to buy a home.  She thinks she got a bargain.  The scamming company gets a fee.  The saver moves into her new home and starts fixing it up.  Six months later she realizes she is going to lose her new home to foreclosure.  The scamming company lied to her.

It’s such a bummer to pay a lawyer to tell you that dream you have will not work, but it’s better than saving your money and losing it.  If it sounds too good to be true….