Manuel Doctor

It may be a combination of both. On one hand, the buyers may have used subprime loans with adjustable rates to purchase their unit from the developer (assuming the complex is a recent rehab or newer construction). Two to 5 years later, their payments go up (due to adjusted interest rates, higher assessed property taxes, and/or increased assessments) AND they can't refinance because their unit is worth less. In which case, they either TRY to sell in short sale and/or they cut their loses and allow the property to go into foreclosure.

However, there are many situations where amature/inexperienced developers sold low quality units in the last 7 or so years and their buyers are now finding that out for themselves. Some unit owners will cut their loses rather than paying any special assessment to remediate the problem. Remember, if its a new/er rehab/conversion/construction, they likely have to contend with higher property taxes, regular assessment increases and probably even higher interest rates IN ADDITION to a special assessment.

The best way to find out if these issues exist in a complex is to talk to the association or management company. Your agent may be your best resource to get you information.

If you don't have one, feel free to call. 312.927.3971. I have tons of experience with short sales and foreclosures. - Tue Jul 14 2009, 12:12