By Kellie Chambers E
agency. One of those guidelines requires servicers to pay all homeowner association (HOA) maintenance fees prior to turning over a foreclosed property to HUD.
condominium fees are not required escrow items for investor-insured mortgages, when the mortgagor or borrower defaults, it becomes the responsibility of the mortgagee or the bank servicing the loan. The servicer is required to "name and prop-
The letter states that because HOA and
arlier this summer, HUD released Mortgagee Letter 2012-11 providing new guidelines for banks and mortgage servicers on title approval when foreclosed properties are conveyed to the federal
the foreclosure crisis. Many face bankruptcy and count on those monthly fees to survive. The Community Associations Institute
erly serve the condo/HOA in the foreclosure proceedings in order to eliminate or minimize HUD's responsibility for unpaid condo/HOA fees; and upon completion of a foreclosure sale, notify the condo/HOA of the mortgagee's interest in the property and, prior to convey- ance to HUD, pay condo/HOA assessments not extinguished by the foreclosure," according to the letter.
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HOAs across the country were hit hard by
(CAI) estimates HOAs and condominium associations currently govern 25.9 million American homes and 63.4 million residents. In 2011, association boards supervised the collection of close to $40 billion in annual as- sessments and maintained investment accounts of more than $35 billion for the long-term maintenance and replacement of commonly held property, according to CAI. A survey conducted by the association
trade group in late 2011 concluded assessment delinquency rates have almost tripled since
