Condo Association Seeks Foreclosure On Wells Fargo

[Joanne98]

In an interesting twist to the massive wave of foreclosures in residential mortgages, a Condo Association Seeks Foreclosure On Wells Fargo.


The Residences at the Bath Club Condominium Association in Miami Beach is pressing a foreclosure action against Wells Fargo as trustee for an investment pool that owns the mortgage on a unit that isn’t paying its maintenance fees.

The lender owes $32,252 in late maintenance fees on the unit it took back more than a year ago.

Determining exactly who is on the hook is itself difficult. The original mortgage was issued by Mortgage Loan Specialists of Irvine, Calif. A spokeswoman for Wells Fargo said it was only the trustee for the bondholders who invested in a securitized mortgage pool. The servicer of the loan is Impac Funding Corp. of Irvine, Calif., which shares the name with the company that issued the mortgage-backed securities and is also named in the foreclosure suit, Impac Secured Assets Corp.

The lender needs to come up with the past due maintenance fees by Friday morning or it could lose the oceanfront condo in a foreclosure auction. The unit sold for $1.45 million during the height of the condo boom, according to Miami-Dade County property records.

“An association foreclosing on a bank?” asked Bill Raphan, who runs the Fort Lauderdale branch of Florida’s Office of the Condominium Ombudsman. “I can’t say I have heard that before. It will create an interesting precedent. Associations often complain lenders don’t pay their dues.”

Attorney Ken Direktor, who leads Becker & Poliakoff’s community association practice, said he encourages his lawyers to aggressively go after lenders who fail to pay association fees.

If Unit 901 sells on Friday, the association will recover the $32,252, including legal fees. Wells Fargo would keep the rest of the sale’s proceeds.

“We increasingly see banks reluctant to take control of a unit,” said Breitner, with The Barthet Firm in Miami. “They would rather keep a unit in limbo and wait until the market comes back.”

http://globaleconomicanalysis.blogspot.com/2008/06/condo-association-seeks-foreclosure-on.html

[flvegan]

1. Whoever is in title is on the hook.

If Wells Fargo took title to the unit via foreclosure, meaning they got the Certificate of Title issued in their names, then yes, they owe monthly assessments for the condo assn. They also have to pay the taxes each year. The condo assn has every right to file a Claim of Lien for the unpaid assessments and to subsequently file a Lis Pendens within a year and foreclose the lien. The association would then have title to the unit, and Wells Fargo would be out of luck.

Doubtful this will go to sale. Lenders who become owners usually have some sort of failsafe method of keeping this from happening, as it triggers someone, somewhere to wire some money.

[AndyTiedye]

2. With the Publicity This Auction is Getting, They Might Do Better to Let 'em Foreclose

Being sort of a "man bites dog" story, this has gotten more publicity than the average foreclosure auction.
They might get more for it by letting it go to auction now.

[flvegan]

3. Huge gamble.

It says it was $1.5 million. Might well have been a foreclosure on a $1.2 million dollar loan. After interest losses and attorney's fees and court costs, they're probably in to this place for right at that loan amount. This place would have to go for some serious coin for it to be really worth it.

Then again, they'll probably just write off the loss.