Reason not to foreclose quickly
Q: In today’s real estate market it may not be wise to foreclose. Lien, yes. Against my opinion, my board foreclosed and now is responsible for trying to sell a home in the community of 1,100 homes. The board, of course, is footing the bill for upkeep and paying all utilities plus maintenance fees, which, if not collected, it would be paying indirectly anyway. In this market, with over 20 homes so far in trouble, this HOA could be in the property management business quickly. The next step is to get into the rental business with all perils. Personally, I’m against foreclosures in a terribly down market. Why would you suggest it?
A: I will agree with you that sometimes it is not best to lien and foreclose on all properties. As such, each delinquent account must be evaluated. My suggestion of a fast lien and foreclosure action is based on trying to get the home paying as fast as possible. If the board waits more than six months, this recommendation more than likely will not work. If the board can take title fast, then they have several options to get the unit paying or generating income. They could contact the first mortgage company to see if it would take title to the property; they could see if the mortgage company would accept a short sale; or they could rent the property and wait for the mortgage to foreclose.