Via CNN, in areas of the United States hit hardest by foreclosure, turning the tables on banks who turn deadbeat after repossessing homes:
Since the housing bubble burst in Florida five years ago, more than 400,000 borrowers have had their homes foreclosed on by their lenders. But for some, it’s payback time.
Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they’ve repossessed. When banks foreclose on a home they become responsible for paying fees to the homeowners association — both any unpaid fees going back as far as 12 months and all expenses going forward. In many cases, however, banks are failing to pay, leaving these associations short on cash, according to Miami-based attorney Ben Solomon. Now, homeowners groups are putting liens on the properties until banks pay up and foreclosing on them if they don’t. So far, Solomon’s firm has filed more than 1,100 liens against banks on behalf of homeowners and has pursued 131 foreclosures. In more than 90% of the cases, he said, the banks settle by paying the bills.
The banks’ failure to pay dues has consequences. Other homeowners have to make up the difference, or the homeowners associations may lack the money they need for things like routine maintenance, security, water and garbage collection. Don Gonzales owns a townhouse in a condo community on a golf course in Homestead, Fla., where Solomon recently filed suit to foreclose on JPMorgan Chase (JPM, Fortune 500) to recover $20,000 it owed on more than two years of dues and common charges. “I own two properties and it really ticks me off when the banks don’t pay their fair share,” he said. “Everybody else has to make it up.”
Only in very rare cases do homeowners associations end up pushing the foreclosure all the way through to the auction sale of the properties. This has happened only once for Solomon. In early November, Keys Gate Community Association in Homestead, Fla., brought a foreclosure on a property owned by mortgage servicer, NovaStar, which owed $22,890 in back dues and fees. In mid-November, the association foreclosed on NovaStar and the home was sold at auction to a third party for $62,000, fully paying off the debts to the association.