Q: Our community has several homes that have been in foreclosure for years. Of course, the owners of these homes are also not paying their association fees. We are wondering how long a bank can stall before it loses the right to foreclose, if that can even happen. Our board is hesitant to take any action if the bank will always be first in line to get paid on these properties.
A: Many communities are still struggling with delinquencies that go back years. Stalled foreclosures are certainly a major factor in this problem, but your association should consider more aggressive action. Under Florida law, a lender has five (5) years to foreclose on a mortgage after the borrower defaults on payment. If borrower fails to cure the default by making payment, the bank will generally accelerate the mortgage note and declare the entire amount due. At that point, the clock is ticking on the five (5) year deadline to foreclose on the mortgage. If some of the defaults in your community are at or near this deadline, your association should consult with its legal counsel and discuss the options you have and there are many. Your legal counsel can do a public records search and provide a very good estimate as to when the mortgage may have gone into default.