Colorado - I currently own a condominium and I own a house. I am living in the house and renting out the condo for the time being. There is a proposed assessment of around $19,000 per condo unit for the replacement of the heating and cooling system in the complex as well as the replacement of all pipes underground. Bascially this assessment has held owners hostage in the complex for over 2 years and bascially tanked values in the complex. Anybody with a mortgage pretty much owes way more than what the units can be sold for. Now to my question: If I was to walk away from the property and let it goto foreclosure can the mortgage company go after other assets I may have, such as equity in my house or the house itself, my cars or even 401ks? Would they still be able to force me to pay the assessment? Is there another way to negotiate the surrender of the property to the mortgage company with little or no affect on my credit? To top it all off, there is the threat of condemnation if the pipes don't get fixed. Thank you!
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Colorado Condo Assessment
- Thread starter ditimely
- Start date
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So you're looking for a way to dump the loan obligation on the mortgage company ... with no impact on your credit.
Uh, no. If you abandon the property, the mortgage company will foreclose. Whatever they don't recover at the foreclosure sale they can get from you under a 'deficiency judgment'.
Some states have anti-deficiency statutes but they typically only apply to foreclosures on primary residences. Since this is a rental, they can go after your other assets.
The foreclosure goes on your credit record.
Uh, no. If you abandon the property, the mortgage company will foreclose. Whatever they don't recover at the foreclosure sale they can get from you under a 'deficiency judgment'.
Some states have anti-deficiency statutes but they typically only apply to foreclosures on primary residences. Since this is a rental, they can go after your other assets.
The foreclosure goes on your credit record.
shortbus said:So you're looking for a way to dump the loan obligation on the mortgage company ... with no impact on your credit.
Uh, no. If you abandon the property, the mortgage company will foreclose. Whatever they don't recover at the foreclosure sale they can get from you under a 'deficiency judgment'.
Some states have anti-deficiency statutes but they typically only apply to foreclosures on primary residences. Since this is a rental, they can go after your other assets.
The foreclosure goes on your credit record.
I understand there will be damage done to my credit if I let it goto foreclosure. I just wanted to know if my other assets were in jeopardy if I did. Foreclosure is the last thing we want to go through with the rental property, but it is also a possibility. Also, at this point I don't think our mortgage company would have anything do with us surrendering the property back to them especially with its ever decreasing value.
Caterina82
Junior Member
ditimely said:its ever decreasing value.
How many units are affected by this horrendous assessment? $19,000 per unit just seems a bit stiff. Have you attended any of these homeownership meetings? I'm a bit suspect at this point, it may be real, but hard to believe from this amount of information.
Also, if this affects multiple homeowners (and their mortgages), and the complex is in jeopardy of being condemned, this sounds like the ideal situation for city rehab bond money or some other type of HUD/Fannie Mae program. I would be asking the officers of the HOA some very pointed questions about how this bid for repairs came about and what research, if any, has been done in the way of rehab loans/bonds for the complex. Granted, the HOA itself would not have the assets to provide collateral for such a loan, but there are ways the collateral could be accomplished.
Caterina82 said:How many units are affected by this horrendous assessment? $19,000 per unit just seems a bit stiff. Have you attended any of these homeownership meetings? I'm a bit suspect at this point, it may be real, but hard to believe from this amount of information.
Also, if this affects multiple homeowners (and their mortgages), and the complex is in jeopardy of being condemned, this sounds like the ideal situation for city rehab bond money or some other type of HUD/Fannie Mae program. I would be asking the officers of the HOA some very pointed questions about how this bid for repairs came about and what research, if any, has been done in the way of rehab loans/bonds for the complex. Granted, the HOA itself would not have the assets to provide collateral for such a loan, but there are ways the collateral could be accomplished.
The assessment is affecting 470 units. There is actually a breakdown for each sized condo. The 1 bed 1 bath condos are responsible for $13,000. Our condo type at 2 bed 1 bath is responsible for $19,000. The 2 bed 2 bath are responsible for $22,000. The assessment is definately for real. We just had the HOA annual meeting in which the HOA brought in the engineers to explain what needs to be worked on. If the HOA and management company can not collect 90% of the assessment then the work will not be done. At this point I don't think they will be able to collect even 50% of it because delinquency/foreclosures in the complex are at about 25%. The HOA have basically exhausted all avenues to pay for the repairs because the delinquency is so high in the complex no one will finance the project. The irony of it is that the delinquency was caused by the initial announcement of the assessment over two years ago. The last thing the HOA tried to do was get a special tax district set up, but the city of Denver rejected it. I appreciate your comments and advice. I think I may take it one step further and sit down with a real estate attorney here in town just to hear what they have to say. I did speak to the HOA attorney, but nothing really constructive came from that conversation.
Caterina82
Junior Member
470 units X approximately $20,000 per is $9.4 million. That is absolutely mind boggling. They are saying there are $9.4 million in repairs required??
You are correct in your assement that any one homeowner is going to have HUGE difficulty getting a mortgage refi of any sort, let alone selling. No lender in their right mind would take the risk on any individual unit in this complex in it's current condition.
There virtually would be no other avenue that I can fathom outside of a loan or bond of some sort from one of the biggies, ie. Fannie/Freddie/HUD or Mortgage Finance Authority.
This link is for HUD's multifamily programs. It may be a start?
http://www.hud.gov/local/shared/working/r8/mfhsg.cfm?state=co
The conversation with a real estate attorney would still be very beneficial I would imagine. There are 470 homeowners at risk here with the potential of liability of the HOA and/or developer.
You are correct in your assement that any one homeowner is going to have HUGE difficulty getting a mortgage refi of any sort, let alone selling. No lender in their right mind would take the risk on any individual unit in this complex in it's current condition.
There virtually would be no other avenue that I can fathom outside of a loan or bond of some sort from one of the biggies, ie. Fannie/Freddie/HUD or Mortgage Finance Authority.
This link is for HUD's multifamily programs. It may be a start?
http://www.hud.gov/local/shared/working/r8/mfhsg.cfm?state=co
The conversation with a real estate attorney would still be very beneficial I would imagine. There are 470 homeowners at risk here with the potential of liability of the HOA and/or developer.