Thursday, April 19, 2012

Your HOA Monthly Fees and a Short Sale

In the Santa Clarita Valley we have many homes that are covered by a Homeowners Association (HOA). They help to keep properties maintained. They keep the CC&R's in place. They keep the townhouse insurance in effect. And, of course, they need your money to do this.


Many homeowners have chosen to do a Short-Sale on their property. They don't want to get foreclosed on, good decision, and yet they need to cut back every penny possible for the health and welfare of the family unit.

Important piece of information for when homes have equity.....HOA's can foreclose on your home. Not all will, but the costs they incur with attorneys, etc., to head in that direction can amount to a large chunk of change. If the homeowner is 12 months or more delinquent or the amounts outstanding total $1800 or more, your HOA can start foreclosure proceedings.

In this market, highly doubtful an HOA would do that and get stuck owing a mortgage for more than the home is worth.

Okay, so if they won't likely initiate a foreclosure, why continue paying your HOA fees if you are selling your home at a  Short Pay-off? Because, if you don't, your bank most likely will not and the buyer that writes an offer for your home probably won't want to either. You can't close escrow with that debt outstanding. Well, actually, I have heard of one case so far where someone made a mistake and it did actually close!

At any rate, keep making your HOA monthly payments if you are working towards a successful Short-Sale of your home. It keeps the neighborhood up, it keeps penalties from padding your bill....and, you just may not be able to actually close the sale of your home if the fees don't get paid got, at the end anyways.

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