MIAMI BEACH, Fla., Jan. 27 /PRNewswire/ -- Miami Beach City Commissioner Jerry Libbin (www.jerrylibbin.com) today applauded the "reverse foreclosure" ruling by a Miami-Dade Circuit judge that forced a bank to take title from a homeowner association (HOA) of a property that had not been paying its assessments.
The HOA, which had foreclosed on the house but couldn't sell it because of the bank's lien, waived its right to the property. Now the bank, HSBC Bank USA, is responsible for paying future HOA fees and assessments.
"This is an important legal ruling for condo owners who are saddled with huge special assessments because greedy banks refuse to take financial responsibility for their reckless lending," Libbin said. "I hope that the Florida Legislature heeds this ruling and finally enacts meaningful and comprehensive foreclose reform."
Libbin is spearheading a state-wide campaign to protect condo unit owners from unfair assessments levied on them because of the residential real estate meltdown. Loopholes in state law have allowed banks to escape paying their fair share of condo association fees. This has forced tens of thousands of Florida condo unit owners in good standing to pick up the tab.
Under current law, banks can indefinitely postpone foreclosing on condo units that stop paying their mortgages and condo association fees. When banks do foreclose, they are only required to reimburse condo associations a small fraction of the delinquent fees owed — the lesser of six months' of association dues, or 1 percent of the mortgage.
Worse, condo associations often have to sue banks to recover even these paltry amounts of delinquent fees. The result is that the remaining condo unit owners are burdened with sky-high assessments to make up the shortfalls, which in turn leads to a further increase in distressed units.
Libbin is organizing trips to Tallahassee this year for condo owners to lobby legislative leaders in person to enact reforms.
"Our state can't afford any more foot-dragging and excuses from state lawmakers," Libbin said. "The banks and banking lobby must be held accountable and pay their fair share. Our state's condo owners, tax base and economy depend on closing these outrageous loopholes."
SOURCE Miami Beach City Commissioner Jerry Libbin