Role Reversal: Homeowner Groups Foreclosing on Banks

Role Reversal: Homeowner Groups Foreclosing on BanksCall it payback time in Florida, as least when homeowner and condo associations are involved in getting banks to pay dues and other expenses on properties they’ve taken over.
In a role reversal, homeowners are foreclosing on banks.
Florida has been an epicenter of the foreclosure crisis since 2007, with nearly half a million homeowners foreclosed on or facing eviction.
But in many communities, bank-owned properties have fallen into neglect and the banks have failed to pay fees that have left homeowner associations short on cash.
Homeowners groups are putting liens on these properties until the banks pay, and foreclosing on them if they don’t.
Miami-based attorney Ben Solomon told CNNMoney.com that his firm has filed more than 1,100 liens against banks on behalf of homeowners. His firm has sought 131 foreclosures.
In more than 90 percent of these cases, the banks settle by paying the owed fees, he said.
The banks’ failure to pay these force homeowners to make up the difference, or the homeowners associations may lack the money they need for such services as routine maintenance, security, water and garbage collection.
The Southbridge Homeowners Association in Pembroke Pines, Fla., is owed about $1 million by many banks that took possession after foreclosures, according to Marc Lebron, the association’s treasurer. Southbridge has been forced to hike maintenance fees to $260 from $145.
But the association filed for foreclosure against Deutsche Bank (DB) earlier this year after the bank failed to pay fees for more than two and a half years on a home it owned since September 2009.
Deutsche and other banks claim and that the mortgage company servicing the account is responsible for paying the fees. The banks content they are just trustees of the property.

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