The repercussions of the robo-signing debacle are still reverberating in foreclosure cases that are being heard today in the South Florida courts. Delays and dismissals of the banks’ foreclosures due to improper paperwork and loan documentation have become the norm, and this is dealing another significant financial blow to the community associations that have already been struggling with unprecedented numbers of foreclosures during the last several years.
The South Florida community association attorneys at our firm have found that it has become imperative to take a very active role in the banks’ foreclosure cases in order to help ensure that any delays are kept to a minimum. Many bank foreclosures are being delayed or dismissed because the bank’s paperwork is questionable or the homeowner has retained a foreclosure defense attorney to mount a number of strategic defenses. This makes it vital for the associations and their legal counsel to regularly monitor the dockets for these cases, and to quickly take action to speed things along as necessary.
Associations can enter a request for a status conference on the case, which would enable them to determine the exact progress of the case and the nature of any delays. They can also file a Motion to Compel, which essentially asks the court to require the bank to take specific actions by set deadlines. If the association takes title to a property via its own foreclosure action then, in the bank foreclosure, the association can make a request for a summary judgment in the bank’s favor. If the delays are taking place in the earliest stages of the bank’s case, the association’s attorneys should make these efforts to notice the case for trial and move it to the final judgment hearing as soon as possible. If the bank’s case is almost complete and the bank has received a final judgment, the association can ask the court to set or reset the sale date for the property. Many banks that reach this stage are cancelling their foreclosure sales just days prior to the sale date, and the courts have been receptive to requests from the associations to immediately reset the sale dates.
If a bank’s foreclosure is dismissed, or even prior to it being dismissed, it may be prudent for an association to proceed with its own lien foreclosure action, as the bank’s delays or dismissal creates a window of opportunity. If the association is comfortable owning the residence and the governing documents allow rentals, then the association can and should quickly foreclose and take title to the residence, as it is then able to begin renting the unit to recoup the past-due fees and assessments. If the bank’s foreclosure is dismissed, it could take the bank a significant amount of time for it to gather missing documentation and try again to foreclose on the residence. During that time, the association is able to use the residence to generate revenue.
As the delays and dismissals in the lenders’ foreclosure cases continue to slow the pace of the entire process, the community associations that act quickly to move the bank cases along or take title to the properties are the ones recovering from the housing meltdown as expeditiously as possible. Our attorneys will continue to write about these and other pressing issues for Florida community associations, and we encourage association members, directors and property managers to submit their e-mail address in the subscription box on the right in order to automatically receive all of our future articles.