Re: Foreclosures and short sales
From: Bryan Syverson (bryan.syversonfresnocohousing.org)
Date: Wed, 11 Feb 2015 09:52:17 -0800 (PST)
Here at La Querencia Fresno Cohousing, we've had 3 foreclosures since
opening in October 2008.  We have 28 units and only sold the last unit in
July 2014.  The real estate crisis hit us hard and our development company
really took it in the shorts.

Two of these were strategic foreclosures: the owners decided they no longer
wanted to live in cohousing.  There were still unsold units, they had
purchased at full development price and could never have sold their unit
for the amount owed.  Both of their units, however, were purchased by
renters who have turned out to be fantastic members of the community.  The
third foreclosure was due to a job loss and injury that caused financial
hardship but the bank and the owners could not negotiate acceptable payment
terms.  That unit has also been purchased by someone very interested in
cohousing.

The only thing I would caution is to be very attentive to the exact date
the foreclosure happens: what date did the bank take ownership.  In one
case, the date we were told by the owners was different from the actual
date by a month and a half.  This matters because the bank will pay HOA
dues - and late fees - from the date they take ownership, but prior to that
it is the original owners' responsibility.  In our case, the owners were
kind enough to pay the back dues, but we had no leverage at that point.  We
would have had to file a lien but the costs of doing so would probably have
been more than the dues we were trying to collect.  Luckily it worked out.

Having a list of interested buyers whom you can refer to the bank is your
best defense against the unit being sold to someone as a "plain-old condo"
rather than someone interested in cohousing.

-Bryan Syverson
HOA President & former Treasurer
La Querencia Fresno Cohousing

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