A homeowner has fallen behind on his Association dues.  The Association proceeds with collections, getting as far as filing a complaint with the Court.

But then the homeowner’s mortgage lender comes along and files a complaint of its own.  Despite reports that portend the end of the foreclosure crisis, according to RealtyTrac’s most recent findings, the average foreclosure completed in the first quarter of 2015 took 975 days.  Now that the game has become more complicated (and potentially longer), should the Association continue to pursue the homeowners, or wait for the lender to complete its mortgage foreclosure and recover its assessments from the bank?

Typically, when we think of the priority of recorded documents in the public records, we believe that whoever records their document first has priority.  While this is typically the case, when it comes to mortgages and promissory notes, that is not necessarily the case.  In Florida, the mortgage follows the promissory note, not the other way around.  So just because there is an assignment of mortgage, that does not mean the assignee of the mortgage can foreclose, especially if the assignee of the mortgage does not have possession of the promissory note. 

HOA and COA’s may finally see some relief in the Safe Harbor nightmare that they currently are faced with.  The Florida Statutes, as they are currently written, require Banks, who are the foreclosing first mortgagee, to pay an Association the lessor of 12 months of assessments prior to the issuance of the certificate of title in their name or 1% of the principal mortgage amount.  It is not that cut and dry, but in most cases that is all the Association is entitled to recover when the bank is the highest bidder.  If you are an Association, it is imperative that you have an Attorney review the case to make sure that you correctly identify whether safe harbor applies and that the entity who took title is in fact a first mortgagee as contemplated by the Florida Statutes.

As if our communities hadn’t suffered enough during this long mortgage crisis, we are just now starting to come to grips with the reality that our neighbors may not be who we thought they were.

I’m not talking aliens out of a M. Night Shyamalan or Steven Spielberg movie.  I’m talking squatters.  Squatters are occupants of properties which do not have a record ownership interest in the property, a valid lease nor are they even permitted to be on the property by the owner.  Usually, squatters have scoped out a habitable property, abandoned by the lawful owner after the owner has defaulted on the mortgage, and they move in and set up house.  They are usually able to get the utilities turned on by simply claiming to have a lease or showing a fake lease to the utility company and paying a nominal deposit.  So long as the lawful owner’s lender delays its mortgage foreclosure, squatters will occupy the property.  And rarely do owners who have abandoned their former homes care who or what happens to the property.