Condo Association Seeks Foreclosure On Wells Fargo

Mish's Global Economic Trend Analysis:
In an interesting twist to the massive wave of foreclosures in residential mortgages, a Condo Association Seeks Foreclosure On Wells Fargo.

“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.”

“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.”

I discussed this problem recently in Homeowner Begs Bank To Foreclose.

People are defaulting on units but banks will not foreclose. The association dues (upkeep and insurance on the building itself) must then passed on to fewer and fewer owners. This puts pressure on still more people to abandon their units. Legal costs are mounting everywhere.

In many cases the back association fees are more than the unit is worth. Over time, this problem is going to increase, dramatically..."