Lenders May Delay Condo Foreclosure To Avoid Paying Dues

Clients often ask me why it takes some banks so long to begin foreclosure on default loans. Part of the problem is backlog at the mortgage companies or their attorneys. Some banks are deliberately delaying foreclosures for reasons discussed this week in a Wall Street Journal article Condo Boards Take On Lenders . The article states points out that mortgage lenders are liable for unpaid condo dues when they take over the property after the foreclosure sale. In Florida, lenders are liable for as much as six months of late condo dues once they take title after foreclosure.  Some condo associations  are themselves foreclosing on bank owned condo units. The mortgage bank is being forced to pay accrued condo  fees in  order to hang on to the foreclosed property. The Journal article states that some mortgage lenders are delaying foreclosure to avoid HOA liability