The riskiest 25 markets in the US

This article is from Forbes, where I'm sure that the answer to the problem is the flat tax.  Florida has about as many cities as anybody, including Miami, at #2, with 33% non-prime loans...

Click through the article to see the list....

Here's Your Sign...

Bill Engvall one of the Redneck Comics has a routine that goes like this:

Stupid people should have to wear signs that just say, "I'm Stupid"

That way you wouldn't rely on them, would you? You wouldn't ask them anything. It would be like, "Excuse me...oops, never mind. I didn't see your sign." ...

This was received today from a person who has a license from the State of Florida to engage in managing condominium associations....

Would it be wrong of me to assume that the Bank Washington Mutual that took title of Unit A-2 1997 Main street. will be paying the assessment from here on out until the sale of the unit?

Sincerely,

A licensed manager, LCAM


Here's YOUR sign......

"Free Fallin"

Like the Tom Petty song, real estate prices are in a free fall in Lee County. Again, this shows the need to be absolutely vigilant about staying on top of your receivables.

Foreclosures? Want to vomit? Read on!!

Want to know how sick the system is?  Below is just part of one day's analysis of the status of mortgage foreclosures we answered and are monitoring. As you know, we were recently forced to start charging a flat fee of $150 to answer and monitor these cases. I have 2 full time people doing this.  I think we just passed a BILLION Dollars in foreclosure defenses, over 3,200 at about $300k each...

Here is how to read them:

date-initials of my employee-action taken-followup

FC= foreclosure; MSJ= Motion for Summary Judgement' OC= Opposing Counsel.

This is absolutely sickening!  When we call the plaintiffs lawyers, they pull the file and move; if not they only move if their clients scream at them, and because Uncle Sam is bailing everybody out , what do the "lenders" care? They've already raped the investors, and sliced and sliced up the packages of these worthless mortgages.

The lawyers for the plaintiffs are totally under water, and their clients don't really want the properties anyway, what with having to pay back assessments, ongoing assessments, property taxes, maintenance &tc., &tc...... 

These matters are moving at about the speed of molasses, which is why I beat the drum about moving aggressively against delinquent owners, and having clients consider authorization of their own foreclosures even when the first mortgage holder starts foreclosure. This is done on a not to exceed fee of $1500, including costs. We can usually go start to finish in 5-7 months and the associations can then rent out the properties. Remember, no guarantees, but if your association sits on it's hands, you will get death by slicing

I believe it will get worse as the lenders all wait for Uncle sam to see how much they can sucker the taxpayers for in a bailout. Current valuation is about 22 cents on the dollar wait, it gets worse, I think we are half way through, maybe.  Just wait until all of the resets on loans come this year, and all of the foreclosed properties get on the market at 50% of their former "value."

12-06-07-GT-Opened Mtg FC file. XXXXXX's office answered complaint 10-11-07.

docket pulled - nothing since answered filed. Check status 2mos.

02-20-08-GT-Per Gail, OC is awaiting hearing date for MSJ. Check status

2mos.

08-08-08-GW-Pulled docket nothing since April.  Status 2 mo

08-29-08-GW- MSJ filed.  check 1 mo for hearing date

02-02-09-GW- Nothing on docket since 8/08.  Check 2 mos

2-06-07-GT-Opened Mtg FC file. XXXXXXX's office answered complaint 10-11-07.

docket pulled - nothing since answered filed. Check status 2mos.

02-20-08-GT-Per Gail, OC is awaiting hearing date for MSJ. Check status

2mos.

08-08-08-GW-Pulled docket nothing since April.  Status 2 mo

08-29-08-GW- MSJ filed.  check 1 mo for hearing date

02-02-09-GW- Nothing on docket since 8/08.  Check 2 mos

04-09-08 LAP Answered Complaint.  Check status 3 mos.

08-08-08-GW- Pulled docket.  Nothing since April.  Check 2 mos

11-21-08-GW- MSJ filed.  Check 2 mos for hearing date

02-09-09-GW- Check 2 mos for hearing

12-03-07-GT-Answered Mtg FC complaint. Check status 3mos.

03-04-08-GT-MSJ was set for 02-28-08. Check status 2mos.

08-13-08-GW-  Sale date Septemebr 8, 2008.  Check 1 mo for CT

09-09-08-GW- OC filed Motion to cancel sale.  Check 1 mo for resch.

02-09-09-GW-Case reopened 9/08.  Nothing filed since 9/08.  Check 3 mos

03-16-08-GT-Gail answered Mtg FC complaint 03-07-08. Check status 3mos.

08-08-08-GW- Pulled docket.  Service being perfected.  Check 2 mo

02-09-09-GW- MSJ filed 11/08.  Check 1 mo for hearing

03-16-08-GT-Gail answered Mtg FC complaint 02-12-08. Check status 3mos.

05-22-08-GT-MSJ hearing set for 07-03-08. Check status 2mo.

08-08-08-GW-Pulled docket.  Nothing since April.  Check 2 mos

02-09-09-GW- Pulled docket.  MSJ filed 4/08 nothing since.  Emailed atty for

status

03-16-08-GT-Gail answered Mtg FC complaint 03-04-08. Check status 3mos.

04-20-08-GT-Owner filed BK 04-09-08.

08-20-08-GW-OC filed Amended Amts Due and Owing.  Check status 2 mos

08-22-08-GW-BKR discharged July 20, 2008.

02-09-09-GW- Defaults being filed 1/09.  Check 2 mos for MSJ

11-21-07-GT-Answered Mtg FC complaint. Check status 2mos.

01-28-08-GT-Stern's office is perfecting service and entering defaults.

Check status 2mos.

08-08-08-GW- Nothing on docket since December.  Check 2 mos

02-09-09-GW- Cas dismissed 8/14/08.  File closed

11-16-07-GT-File pulled for case status update. Docket shows no movement

since 04-03-07.

11-28-07-GT-Emailed status request to Echevarria.

11-29-07-GT-Per plaintiff's atty, this file is on BK hold. Check status

3mos.

03-04-08-GT-No movement on docket since 04-03-07. File to Gail to call OC.

03-07-08-GT-Per Gail's email from OC, file is still on BK hold. BK is

active. Check status 3mos.

10-24-08-Amending MSJ  Check 3 mos for hearing Check 2 mos

02-05-09-GW- BKR terminated.  Check 2 mos

02-09-09-GW- 10/08-Lenders atty amending MSJ and reschedule sale date.

03-09-08-GT-Gail answered Mtg FC complaint 02-12-08. Check status 3mos.

06-27-08-GW-Sale date 7/23/08.  Check 1 mo for CT. No fax sent per Kathy.

08-04-08-GW-Sale to third part for $99,700.  Check 1 mo for CT

4-18-08 LAP Answered Complaint.  Check status 3 mos.

02-09-09-GW- Nothng on docket since 7/08.  Check 2mos

12-27-07-GT-Answered Mtg FC complaint. Check status 2mos.

03-02-08-GT-OC is preparing defaults. Check status 2mos.

04-09-08-GT-BK filed 03-31-08.

05-22-08-GT-File was administratively closed but NOT dismissed. Check status

2mos.

09-18-08-GW-9/18/08 Hearing cancelled per phone call 9/17 from OC office.

Check status 2 mos

09-30-08-GW-Hearing cancelled.  check 2 mos for reschedule

02-09-09-GW-Nothing on docket since 9/08.  Court has the file as closed.  No

dismissal filed.  Check 2 mos

12-17-07-GT-Answered Mtg FC complaint. Check status 2mos.

03-02-08-GT-OC is preparing for defaults. Check status 2mos.

07-17-08-GW- Check status 2 mo

08-04-08-GW-MSJ hearing for 7/31/08 cancelled.  Check status 2 mos

02-09-09-GW- Hearing cancelled.  Notingo n docket since 7/08.  Check 2 mos

01-07-08-GT-Answered Mtg FC complaint. Check status 2mos.

02-04-08-GT-Owner is in BK.

03-09-08-GT-File is on BK hold. Check status 3mos.

06-15-08-GT-BK was discharged 03-24-08. OC is restarting the Mtg FC action.

Check status 2mos.

06-18-08-GW-MSJ hearing 7/17/08.  Check 1 month after.

09-15-08-GW- Hearing cancelled.  check 2 mos for reset.

11-01-08-GW-MSJ filed Check 2 mos for hearing date

02-09-09-GW-MSJ hearing 4/21/09.  Check 1 mo for sale date

01-21-08-GT-Answered Mtg FC complaint. Check status 3mos.

07-17-08-GW-Service being perfected.  Check 2 mo

02-09-09-GW- Noting on docket since 6/08.  called lender atty they are

preparing the MSJ in about a month  Check 1 mo

09-10-08-GT-Opened FC file. Ran clerk search - clear. Ready for TS.

10-03-08-GT-Have not rec'd TS back from Mike. Check status 2wks.

10-09-08-GT-Updated clerk search - Mtg FC found. File converted to Mtg FC.

Check status 3mos.

10/28/08-GW-Ans Complaint.  Check status 3 mos

03-18-08 LAP Answer Complaint - Check status 3 mos.

08-04-08-GW-MSJ hearing 9/22/08.  Check 1 mo for sale date

10-18-08-GW-MSJ hearing 11/4/08.  Check 2 mos for sale date

11-13-08-GW- Sale date 12/5/08.  Check 1 month for CT

11-18-08-GW- Bankruptcy filed 11/5/08.  Check 3 mos

12-01-08-GW- Foreclosure sale cancelled  Check 2 mos

02-09-09-GW- Nothing on docket since 12/08.  Check 2 mo

Race to the Courthouse Steps-2009 version

The situation is bad in Florida. We are now handling about a BILLION dollars of first mortgage foreclosures. When an owner is delinquent, the board needs to consider moving as fast as possible in the collection and foreclosure process, and try to take title and rent the property before the "lender" finishes the foreclosure. The lender foreclosures are taking anywhere from 9 months to TWO YEARS, as they don't want to pay taxes, assessments, insurance, etc., etc. Watch my video here for more details.

See my other videos and articles on the issues of the day at www.condocollections.com

Comply with the FDCPA when you collect!!!

Several years ago, the collection of unpaid condominium association assessments was relatively simple. The procedure to collect remained the same, but with values rising by 2% per month or more, condominium associations who had to go through the foreclosure process, which occurred about 40 times (!) less often than they do now, were paid in full even at the sale, due to the rising price environment.

It has come to my attention that in this declining price environment, some management companies are adding certain fees to offset their internal costs of bookkeeping. I understand the problem that Community Association Managers face. In these unprecedented times, the cost of additional bookkeeping puts a strain on their budget, and the company has somewhat of a “no-win” choice: either find a way to isolate the costs of the extra bookkeeping, such as adding an “actual cost” into the 45-day initial demand letter in the homeowner association setting, (as allowed by law, at least for the time being) or force a rise in the basic management fee, thereby punishing the people who pay for the costs incurred by the people who don’t pay.

The problem arises when those management companies, or the attorneys who represent the associations, attempt to collect an additional fee or cost from the delinquent owner through the demand process. In my opinion, that is a violation of the Fair Debt Collections Practices Act (the “Act”). The Act provides that a debtor is only obligated to pay for debts that he/she legally contracts to pay. In the case of a Condominium Association, the legal contract and agreement thereto is the Declaration of Condominium and the Condominium Documents. Additionally, state law may allow imposition of other costs (the “actual costs” for HOAs, as referred to above).

In the condominium setting, however, there is no authority either under state law, the Act, or the documents to segregate a separate cost and impose that cost against debtors. Make no mistake; the issue is not whether the associations and their managers have the legal right to agree, by contract, for the association to pay the management company additional fees to pay for the costs of keeping track of delinquent owners. That is a matter of contract between the association and the management company. It is perfectly legal to charge an association, say $25 per delinquent owner. That is is a cost of the contract shared by all owners. The problem arises because neither the association, nor the management company, nor counsel for the association, can legally require that a unit owner debtor pay those fees.

I have always counseled my clients and their management companies not to ask for those fees when collecting, either in the initial demand sent by the management company or through legal counsel. While this may not create liability for the Associations, I believe it creates extensive potential liability for the lawyers and management companies who do so.

What’s the bottom line? Management companies and lawyers who demand that condominium unit owners pay additional fees and costs other than those allowed by law are exposing themselves to liability, with the result of possibly hundreds or thousands of individual lawsuits being brought against them for an alleged violation of the Act. While there have been some notable class action lawsuits involving the law firm of Katzman and Korr and my former law firm, Becker & Poliakoff, if I was a plaintiff’s lawyer, I would run an ad seeking out people who may have been charged those extra fees and proceed to bring a thousand actions, each on behalf of an individual owner, against entities who violate the law. While I don’t advocate this, and I certainly don’t wish it on any management company or any lawyer, I feel strongly that my clients and their managers should strictly follow legal guidelines for collections. Being aggressive and taking prompt action is one thing; violating federal and state laws is another.

On the other hand, we may be only 1/3 through....

“Credit losses could peak at a level of $3.6 trillion for U.S. institutions,” famous forecaster of doom and gloom Nouriel Roubini said this week, “half of them by banks and broker dealers. If that’s true, it means the U.S. banking system is effectively insolvent, because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

Total financial write-downs and losses have now surpassed $1 trillion since the start of this crisis in mid-2007. That’s puts us barely a third of the way though this mess, if you follow Roubini’s logic.