The closing cost which
usually causes the biggest problem is delinquent HOA dues. The
short sale lender will typically allow current HOA dues to be prorated. This
does not include delinquent dues. In a condo or a townhouse project with large
monthly dues, these delinquent dues can add up to thousands of dollars. This is
especially true when the short sale lender takes months to approve the short
sale during which time the dues continue to accrue. Also, fees for disclosure
packets and other HOA fees are usually not allowed by the short sale lender.
The best practice is to advise
the Seller to keep their dues current if at all possible. The
short sale lender will allow the Seller to occupy the house until the short
sale is approved. All they expect is that the Seller maintain the house, keep
the utilities on, and pay HOA dues.
P.S. If real estate taxes and
insurance premiums are being escrowed, the short sale lender will continue to
pay those even if the borrower is not paying the mortgage.
William D. Tucker, III
Tucker Griffin Barnes
Charlottesville, VA
434-973-7474
www.TGBLaw.com
No comments:
Post a Comment