HOAleader.com - Tip of the Week - December 12, 2014
Published: Fri, 12/12/14
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Florida Court Smacks Bank in Foreclosure Action: Will It Matter?
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In this week’s tip, we discuss a recent Florida case that may—or may not—have
implications for HOAs throughout the state and beyond.
The case is Bermuda Dunes Private Residences v. Bank of America. In it, Bank
of America brought a foreclosure action against an owner in the Bermuda
Dunes condo association. It also sought from the association a final figure
for past-due assessments, and the association claimed $17,987.84 was
owed. The bank, however, claimed that amount didn’t take into
consideration Florida’s law allowing first mortgagees a safe harbor.
They’re required to pay no more than 12 months of past-due assessments or 1%
of the amount due, whichever is less. Factoring in the safe harbor, the condo
association would be due only $2,551.20.
The association, however, argued that Bank of America was no longer the
first mortgagee and therefore wasn’t entitled to the safe harbor. It argued
that Bank of America had assigned the loan to the Federal Home Loan Mortgage
Corp., commonly known as Freddie Mac. Thus Freddie Mac was the first
mortgagee, and Bank of America was only servicing the loan on behalf of
Freddie Mac. If that were true, Bank of America wasn’t entitled to the safe
harbor.
Long story short, the trial judge granted Bank of America’s motion
contending it was a first mortgagee and entitled to the safe harbor. Even so,
the judge seemed to question the basis of her own ruling: “Technically . . . my
concern is you haven’t dotted your I’s and crossed your T’s in making your
record, okay?”
The appellate court reversed the trial court’s decision and took the trial
court to task. Aaron Gordon provides a metaphor to help easily understand
what took place. “It’s like a lawyer is taking title to the property on behalf
of her client. But in that case, procedurally the lawyer doesn’t get the
protection of the safe harbor,” explains the corporate general counsel for
LM Funding in Tampa, which manages the receivables of community
associations throughout the United States. Pursuant to an agreement with
Bermuda Dunes, LM Funding retained the lawyers who represented Bermuda
Dunes in this case.
While it’s nice to see a bank get in trouble for short-changing an
association, how much will this case matter? Find out in our new article:
http://www.hoaleader.com/members/1105.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Florida Court Rules Against Bank: How Major is the Ruling for HOAs?
A Florida appellate court has held in Bermuda Dunes Private Residences v.
Bank of America that Bank of America took title as first mortgagee to a
property--and paid less in delinquent fees to HOAs as a result--though it
didn't have the rights as the first mortgagee. How big is this ruling for HOAs
in Florida and beyond?
Click here to read full article:
http://www.hoaleader.com/members/Florida-Court-Rules-Against-Bank-How-Major-Ruling-for-HOAs.cfm
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Can You Use Your HOA's Operating Budget to Pay a Loan?
An HOAleader.com reader writes, "The board of a condo in Maryland in which I
am a unit owner and a newly-elected director is proposing to take out a loan
for replacing expensive building items. And it's stating, 'The loan
payment will come out of the operating budget, so obviously we would need a
budget that would cover repayment of the principal and interest.'
Click here to read full article:
http://www.hoaleader.com/members/Can-You-Use-Your-HOAs-Operating-Budget-Pay-Loan.cfm
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Easier Enforcement of Your HOA's Rules: Steps to Create Enforceable Rules,
Effective Fines, and a Fair Violation Process
Enforcing rules doesn't have to be a pitched, tense, and unpleasant battle
between your homeowner association board and your homeowners. With some
smart planning, you can make enforcing your HOA's rules fairer, quicker,
easier, and less stressful.
Listen to this webinar on-demand led by two community association experts: a
lawyer with more than a decade of hands-on experience in advising associations
on how to create and enforce rules, along with a veteran association manager
with insights on the day-to-day operations of rules enforcement. You'll get
practical ideas, systems, and processes you and your condo or HOA board can
begin to take advantage of the minute the webinar ends.
Click here to read full article:
http://www.hoaleader.com/snip/181.htm
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How to Get Your HOA Developer's Attention Pre-Transition
Is your developer being stingy with information? In this week's tip, we
discuss the very common problem of developers giving the cold shoulder to
owners until they transfer control to unit owners.
Click here to read full article:
http://www.hoaleader.com/members/How-Get-Your-HOA-Developers-Attention-PreTransition.cfm
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HOA Board Waiting for Developer Transition; 7 Tips to Handle Developer
Control
An HOAleader.com reader writes, "I live in the state of Delaware… [and] our
community is in the early stages of development; there are about 100
lived-in homes. The community is about seven years old… I have lived here
less than two years. Our developer has appointed a board of directors
consisting of three of his employees and probably not surprisingly
maintains solid control of the community.
Click here to read full article:
http://www.hoaleader.com/members/HOA-Board-Waiting-for-Developer-Transition-7-Tips-Handle-Developer-Control.cfm
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