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The Ticktin Minute April 24, 2017 – Foreclosure Process Pursuant to a HOA Lien for Non-Payment of Condominium Assessments

Condominium Associations run very similar to a business and have two distinctive functions. First, they collect monthly maintenance fees and special assessments and ensure that all unit owners are paying such fees assessed, which are necessary to keep the property in good condition. Second, the Condo Association must ensure that the unit owners and their guests are following the rules and regulations set forth by the Condominium. Such rights are typically listed in the Articles of Incorporation of the Condominium and/or in the Declaration of Condominium, which is recorded in the county where the property is located.

If a unit owner fails to pay any of the fees assessed by the Condominium Board, which may include monthly or quarterly maintenance and/or special assessments, then the Condominium will have a right to foreclose on the subject unit after a specified grace period has passed. Such grace period should be dictated in the Declaration of Condominium or other similar documents that should have been remitted to all new unit owners. The process for foreclosure pursuant to non-payment of Condominium fees is very similar to the process for foreclosure pursuant to a default in the mortgage. The Condominium first files a complaint (Lis Pendens) and summons with the court. They then continue with the typical foreclosure process until they receive a judgment. One easy way to have the Condominium withdraw the complaint is to agree to pay the fees, however, such fees will likely include additional court costs and attorney’s fees incurred by the Association. It’s always a great idea to contact a foreclosure attorney in order to assess the strength of your case and any potential defenses you may have as soon as reasonably possible.

Contact the attorneys of The Ticktin Law Group to assist you with foreclosure defense action and/or any other legal matter you, a friend or a loved one may have. The attorneys of The Ticktin Law Group offer complimentary legal consultations.

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The Ticktin Minute April 17, 2017 – HOA Liens and Foreclosure

A Homeowner’s or Condominium Association (also known as “HOA” or “COA” or collectively referred to as the “Association”) is a legal entity created in order to ensure that a neighborhood of homes or condominium units with common elements function properly. In order for a Homeowner’s Association to function properly, they are given a power to place a lien over any homeowner or condominium unit owner who does not follow their rules and regulations. Such lien may lead to a foreclosure of the unit holder’s property in some circumstances.

The Homeowner’s Association and/or the Condominium Owner’s Association typically have two functions. First, the Association ensures that the rules and regulations of the community are followed. Second, the Association collects assessments and fees related to property ownership within the community. Such fees are used towards items indicated in a yearly budget, which is comprised of day-to-day repairs and services. This can include monthly pool maintenance or regular cleaning services. The yearly budget can also account for items such as employee salaries, anticipated repairs and/or legal fees. The budget total is then divided by the number of units in the community and each owner is required to pay their share of the fees. Further, if there are any unanticipated expenses, the owners may be required to pay their proportionate share above and beyond the monthly maintenance fee. Failure to pay such fees can subject an individual’s home to foreclosure. The most common reason why an Association will resort to foreclosure is the failure of a homeowner to pay maintenance fees and/or special assessments charged by the HOA or COA.

If a homeowner fails to pay maintenance fees assessed by the Association then they will be responsible for the unpaid assessment charge, late charges, reasonable costs of collection (attorneys fees), fines (in some cases) and interest charges. The owner will also be responsible to pay for their own foreclosure defense as the process is the same as if the home were foreclosed by a bank.

Contact the attorneys of The Ticktin Law Group to assist you with foreclosure defense action and/or any other legal matter you, a friend or a loved one may have. The attorneys of The Ticktin Law Group offer complimentary legal consultations.

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The Ticktin Minute April 10, 2017 – Explanation of the Promissory Note With Regard to a Foreclosure Proceeding

In order for a foreclosure proceeding to occur, there must have been an original mortgage document and promissory note signed in favor of a bank. This typically occurs when the property is originally purchased, however, this could also materialize pursuant to an obtaining an equity line of credit with the home serving as the collateral for the additional mortgage. The mortgage document and the promissory note work together to provide the rules for the homeowner to follow and the right for the lender to protect their interest in the collateral (the home).

A promissory note is almost always signed along with a mortgage. The mortgage states the terms of the loan arrangement and attaches the property as the collateral for the loan, whereas, the promissory note is the actual “promise” to repay the debt. Lenders generally include both documents in their foreclosure complaints as exhibits because the mortgage document and the promissory note work together to require a homeowner to re-pay the bank in the event of a breach of contract or failure to pay monthly payments due to hardship.

The promissory note is usually a one (1) to three (3) page document, at most, which is essentially an “I Owe You” to the bank. Promissory notes rarely have extensive contractual provisions and/or stipulated consequences of default. Rather, promissory notes refer back to the mortgage document for the terms of the loan. Mortgage documents can be as long as thirty (30) pages long detailing such terms. The other major difference is that the mortgage is the document that secures the home as the collateral for the loan. In other words, the mortgage allows the bank to foreclosure on the home if payment is not received. Without the mortgage, the promissory note would be harder to enforce (it would not have any collateral for the promise to repay). Therefore, both documents should be reviewed and strictly adhered to. If a breach of contract due to financial hardship is imminent or has recently occurred, contacting a knowledgeable foreclosure attorney and providing them with a copy of mortgage and promissory note is crucial to ensure that you have the best chance to keep your home.

Contact the attorneys of The Ticktin Law Group to assist you with foreclosure defense action and/or any other legal matter you, a friend or a loved one may have. The attorneys of The Ticktin Law Group offer complimentary legal consultations.

 

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The Ticktin Minute April 03, 2017 – Explanation of the Mortgage Document With Respect to a Foreclosure Proceeding

The ability of a lender to foreclose on a residential or commercial property generally stems from the original mortgage document and promissory note signed by a purchaser of property in favor of a lender. The original mortgage document and promissory note is typically used as the catalyst for a foreclosure. Or, in some circumstances, a lender may have the right to foreclosure on an equity line of credit (secured by the real property subject to foreclosure) that was taken out by a homeowner at some point after purchasing the property.

A mortgage originates from a bank that typically looks at the financial position of a borrower and ensures that such borrower can make the requisite payments on the home. After the due diligence process occurs, the lender typically drafts a mortgage document (contract) that stipulates the terms of the loan and/or actions that would result in a breach of contract of the mortgage on the part of the purchaser as well as the lender. In most cases, this mortgage document is not negotiable, however, in some cases the terms may be negotiated. For instance, the mortgage document usually has provisions for making timely monthly payments of principal, interest, taxes and homeowner’s insurance. Failure to make payments of any of the above items (principal, interest, taxes and homeowner’s insurance) in the manner prescribed by the mortgage document may lead to a breach of contract claim by the lender and the ability of the lender to foreclosure on the subject property. Similarly, if the lender does not properly escrow a property owner’s taxes and homeowner’s insurance, this can serve as a defense in a breach of contract or foreclosure claim and/or service as a possible cause of action against the lender. The mortgage document works very closely with the promissory note, which will be outlined in the following week’s blog.

Contact the attorneys of The Ticktin Law Group to assist you with foreclosure defense action and/or any other legal matter you, a friend or a loved one may have. The attorneys of The Ticktin Law Group offer complimentary legal consultations.

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The Ticktin Minute March 27, 2017 – Commercial Foreclosure Process

Commercial foreclosure is similar to residential foreclosure, except that the property secured by the mortgage is owned by a business or commercial enterprise. Commercial foreclosure occurs when the business owner defaults on their mortgage with the bank and the bank institutes proceedings to foreclosure on their lien against the property. The owner of the property is called the “mortgagor” and the lender is called the “mortgagee.” The process for commercial foreclosure is very similar to the process for a residential foreclosure. The major difference is that the bank litigates against a business rather than an individual homeowner.

The very first step in the commercial foreclosure process actually occurs by the mortgagor (or owner) and is called the “default.” The default is essentially a breach of contract by the individual who owns the commercial property. The most common breach of contract is failure to pay. The lender then typically sends a demand letter to the borrower on the loan stipulating the breach and stating the terms that must be fulfilled to reinstate the loan as current. Usually the lender will include a payment amount in the demand letter and a due date by which the lender must receive the payment.

If the mortgagor ignores the demand letter or does not have the financial capacity to make the requisite payment(s), then the next step in the commercial foreclosure process is the bank filing a formal proceeding in court indicating their intent to foreclosure on their mortgage and promissory note. This is called a complaint (Lis Pendens) and summons. After the complaint is served upon the borrower, the borrower has a certain amount of days to respond with defenses. It is crucial to retain an attorney well in advance to ensure the proper defenses are formulated and included in the answer. From that point, the normal litigation procedures occur including but not limited to: mediation, discovery, various motions and/or settlement. If a settlement is ultimately not reached, the case will go to trial.

Contact the attorneys of The Ticktin Law Group to assist you with foreclosure defense action and/or any other legal matter you, a friend or a loved one may have. The attorneys of The Ticktin Law Group offer complimentary legal consultations.

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