The foreclosure crisis has special significance for homeowners with properties governed by homeowner associations which often charge large monthly fees for the general maintenance of the common areas. Many homeowners who have lost their condos and planned community homes to foreclosure are finding that they are indebted to homeowner associations for thousands of dollars long after they have lost their home to foreclosure.
Homeowner associations are clamping down hard on delinquent residents and former residents who owe past-due HOA fees. Many of these homeowner associations are hiring debt collection companies, filing lawsuits and garnishing the wages and assets of homeowners' who have lost their properties to foreclosure and have failed to pay HOA fees. It's a double whammy for homeowners' who have succumb to foreclosure because oftentimes they are on the hook for 12 months or more of HOA fees even if they weren't living in the property at the time.
Because homeowners remain liable for HOA fees until their home is sold or seized via foreclosure by the bank, many homeowners are being relentlessly pursued by homeowner associations. And even if they were only behind a month or two at the time they moved out of the property, they could end up paying much more because the bank delayed their foreclosure. Some even suspect that mortgage companies are hesitant to foreclose on condos/townhomes with HOA fees because they know it may take a long time to sell these property and they don't want to spend out thousands in fees on a property that isn't profitable. Fortunately for those debtors who file bankruptcy, HOA fees can be discharged in bankruptcy.