How are HOA Assessments Recovered After a Foreclosure?

Many Florida homeowner associations have faced the issue of collecting delinquent assessment fees after foreclosures. Since there are considerable amounts involved in a delayed foreclosure action, homeowner associations should be aware of the amount that they may or may not be able to recover. Consider using a debt recovery service to ensure you receive the maximum amount of the money owed.

SNAP Collections is an easy, efficient and cost effective HOA collections platform for homeowner associations. Our goal is to ensure that homeowners associations recover more money on delinquent accounts than any other collections solution in the industry. Below are the most common ways in which properties are transferred during a foreclosure and what can be recovered.

A Short Sale

A short sale occurs when a property is in foreclosure and the owner sells it to an interested third party buyer. However, before attempting to sell the property, the homeowner must first consult with the bank to receive approval of the price the new potential owner is willing to pay.

If the short sale is approved, the new owner is required to pay off all pending debts to the Condo Association or Home Owner Association including assessments, interest, late fees, costs and attorney fees if the sum is not paid off at the time of the sale.

Bank Entitlement

Once a foreclosure is concluded, the bank is entitled to the property if it outbids all other bidders at the foreclosure sale. Unfortunately, this is a situation in which homeowner associations will not reap much of the delinquent fees. In Florida the association may receive as little as the lessor of 12 months of delinquent maintenance fees or 1% of the first mortgage amount.  If your association has engaged a good collections solution it is very possible that the banks have not proceeded properly and can be compelled to pay more than that paltry minimum…It happens every day.

Third Party Buyer

At the time of the foreclosure sale, there is a chance that a third party buyer may outbid the bank. In this case, the third party buyer will endure the same fate as the short sale buyer if the delinquent assessments and other fees aren’t paid at the time of the foreclosure to the homeowner’s association.

SNAP Collections is a collections agency in Florida that has been successfully collecting past due assessments since 2006. If you need a debt recovery service, we can assist you in recovering lost funds. Our experience and success speaks for itself, as we are now a national company serving condos and HOAs from the East Coast to Colorado. Contact us today for more information.