Lot 127 Villa Lago in Sandestin, Florida resort, just sold! The Baytowne Loop parcel was a short sale with Bank of America. The listed price for this Villa Lago lot was $65,500. The sale price was $65,000. The property had some past due association fees. Bank of America paid about $8,000 of the past due fees. The buyer contributed about $2000. The homeowners associations reduced their final balances due to allow the closing and also to settle in full. There were two HOA’s in this case – Villa Lago Homeowners Association and the Sandestin Master Association. I find homeowners associations normally work with sellers in a short sale situation. Why would they reduce the amount of their bill and settle for less? First, according to Florida Statutes 72.3805:
Notwithstanding anything to the contrary contained in this section, the liability of a first mortgagee, or its successor or assignee as a subsequent holder of the first mortgage who acquires title to a parcel by foreclosure or by deed in lieu of foreclosure for the unpaid assessments that became due before the mortgagee’s acquisition of title, shall be the lesser of:
1. The parcel’s unpaid common expenses and regular periodic or special assessments that accrued or came due during the 12 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or
2. One percent of the original mortgage debt.
What does this mean? That if a Florida property is foreclosed on, the foreclosing entity is only liable to pay an amount equal to the lesser of one year’s association dues or one percent of the borrower’s mortgage debt. If they get anything more than this amount, as in a short sale where the lender pays part of the balance (and possibly the homeowner and the buyer), they might be pleased and accept it as settlement, instead of waiting for the owner to get a new buyer or pursuing the balance further legally.
Second, an HOA might settle for less than their full balance due so that they will get a new “paying” owner. If not, they may have to wait months or maybe years for a regular payee.
If you are thinking of selling your Sandestin Florida property, and need a Sandestin short sale specialist, give me a call.
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: [email protected]
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Wendy Rulnick, Broker, is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. She has successfully helped hundreds of families avoid foreclosure through short sale along the Emerald Coast of Florida. Wendy Rulnick is knowledgeable in all aspects of short sale, including VA Compromise Sale, FHA HUD pre-foreclosure sale, HAP military PCS, HAFA, Bank of America Coop program and more. She is also co-founder of www.ShortSaleSuperstars.com and short sale instructor to agents across the United States. Wendy Rulnick sells real estate in Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Panama City Beach, Eglin AFB, Hurlburt Field.