short sales and hoa fees?

Asked by Melanie, Vista, CA Thu Sep 20, 2007

We are moving out of our condo that is on the short sale market, it hasn't sold yet, but we want to move now so we have a choice vs a low credit score and higher deposits. What happens if we stop paying our hoa fees after we move and the house hasn't sold?

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thinz, Agent, Allenhurst, NJ
Wed Jan 9, 2008
Have you stopped making payments to the lender now that the house is on the short sale market? If not, I would try to continue to keep making HOA payments. Either way if you don't pay them, there will be another lien on the home at closing time that will need to be settled. If you have a true hardship and are behind in payments to the lender, I would add the HOA fees to the HUD-1 just like I do for things like delinquent property taxes, etc.
I am handling a short sale for a couple in a 55 and older community tha has HOA fees...In their case, we are still paying them since it is relatively low. The main reason is they want to keep a low profile in this tight community while we pursue the short sale.
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Patti Philli…, , Carlsbad, CA
Thu Sep 20, 2007
Melanie, So sorry for you that you are in the "short sale" predicament! You are probably wise to find a rental while your credit looks good, because it is very difficult to move when landlords see bad credit. You have been given good advice- anything that you can continue to pay, do. The less you have bad "dings" spread around the better.

Meanwhile, I hope that your condo sells quickly, and your situation improves for you!

Patti Phillips
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Pam Winterba…, Agent, Danville, VA
Thu Sep 20, 2007
My suggestion is to continue paying your HOA dues. Legally you are responsible until title is taken out of your name.

Most associations will file a lean on the property if they are more than 90 days delinquent and in some instances I have seen them file for foreclosure. I sit as a board member of our association and they do not fool around with this.

Your credit score will follow you for the next 7 - 10 years so please be cautious. Good luck to you.
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J Lo, Home Buyer, California Glory, Brentwood, CA
Thu Sep 20, 2007
Until the property transfers legally out of your name - you want to do everything in your power to protect your credit. The HOA dues are just one way to keep yet another ding from showing on your report.

I'm sure from your perspective - it's a mute point - but there's always tomorrow to think about.

My best wishes to you for a quick sale.
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Artur Urbans…, Agent, Burlingame, CA
Thu Sep 20, 2007
Hi Melanie,
The short sale costs 150 point drop in your FICO score. Not paying HOA dues not only will put you in at risk of a lawsuit as Tisza mentioned, but additionally it will further depress your credit score.
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Tisza Major-…, Agent, Upland, CA
Thu Sep 20, 2007
Hi Melanie,

Welcome to Trulia and thanks for asking this question.

You might want to continue paying just the HOA's until the property sells to prevent them from having the ability to file a lawsuit against you. You should also read through your CC&R's to see if the situation is covered. Another thing to consider is the fact that you are adding to your credit damage by having yet another outstanding bill.

I wish you good luck in finding a buyer quickly for your condo so that you and your family can move forward easier.

I hope this helps. Have a terrific day!

Tisza Major-Posner, Realtor, Keller Williams
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