Foot-Dragging Mortgage Lender Yields To HOA Demand; Abandons Foreclosure On Unwanted Collateral, Releases Security Interest In Condo Unit

In Miami Beach, Florida, WFOR-TV Channel 4 reports:

• A new tactic in dealing with foreclosed condo units is being used by one attorney in South Florida. [...] Attorney Ben Solomon of the Association Law Group explained, "The bottom line is the banks don't want to assume the liability associated with the unit, including the obligation to pay maintenance assessments to the association."

• Solomon is now challenging the banks to foreclose or get out of the way. "The bank has to make a decision as to if they are going to take title to the financially upside down unit, or release their mortgage," said Solomon. He calls it a mortgage terminator.

• He demanded Citibank to foreclose on unit 14 in [one] building. Surprisingly, instead of an 18 month legal fight, Citibank wrote off the debt, and handed the title over. [...] Solomon believes this case will set a precedent for more cases. "They can't sit on the sidelines anymore. And that's this legal strategy. It's to force them into making a decision," said Solomon.

• Either way the association wins collecting dues or now title from the bank. Solomon says he plans to use this tactic on 12 more properties. It's an interesting concept. Forget foreclosure or refinance. Just ask the bank for the title. Who knows, maybe they'll give it to you.(1)

For the story, see Condos Demanding Foreclosure On Abandoned Units (Condo Associations Plagued With Abandoned Units Demanding Banks To Foreclose Or Give Up Title), (or go here for the video).

See also, Forget Short Sales, Just Hand Over Title:

• In the case of this Miami Beach condo the unit owner actually moved out in 2007 when the association foreclosed on the unit. [...] The association has waited patiently for the bank to foreclose but three years later nothing has happened. Citibank knew they were going to take a bath on the unit mortgaged at $166,000 ... Appraised today under $60k.

(1) Based on the WFOR-TV Channel 4 video report, it appears that, after waiting around for a couple of years after it took title to the unit as a result of conducting its own lien foreclosure action, the condo association filed an action to quiet title against Citibank demanding, essentially, the lender to either "fish or cut bait" with respect to its foreclosure rights (assuming, of course, Citibank had any foreclosure rights in the first place by establishing that it had legal standing to foreclose).