Foreclosures hit communities hard | news-press.com | The News-Press: "'The biggest issue we're seeing now is collections,' he said. 'It's causing tremendous amounts of heartache for the associations.'
To make matters worse, Kaplan said, when a condominium unit goes into foreclosure the lender trying to get it back is liable for only the first six months of assessments or 1 percent of the original mortgage, whichever is less. For homeowners' associations, it's 1 percent or 12 months."
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The press seems to be understanding the financing crisis of condos and many HOAs the same way they finally got the issue of BOD abuse of owners in the mid 1990s. However, what they do not grasp in either case is that this is all the logical outcome of the decision by governments and developers to privatize the functions of local government and pass the costs on to home buyers. Until that issue is dealt with, the problems will continue. And in the current economic situation, condo ownership is a minefield.
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