Betsie Melter's Real Estate Blog: June 2010

I think many people who are going through a short sale or foreclosure think that their HOA dues are part of that and stop paying them. Well, they aren't. The Homeowner's Associations are really starting to take action against owners who are not paying their monthly dues. Many articles have been released lately talking about HOA's hiring attorney's to recuperate the dues not paid by homeowners. This leads to the owner having to pay far more than if they would have just paid their monthly dues.

When a homeowner buys a house, the CC & R's state what the dues are and what they cover and the owner signs an addendum stating that they understand the rules and are agreeing to pay the dues. Just because they are leaving the house doesn't mean that they can negate the contract they signed with the HOA. Not to mention, it really puts a burden on the neighbors. The other owners in the neighborhood have to make up for the missing payments or have other ammenities taken away becasue the association can't pay for them anymore. Or, worse, the remaining homeowners have to pay an assessment out of their pockets in order to pay for the maintenance of the community.

So, if you are going through a short sale or foreclosure, please do your neighbors a favor and keep paying your HOA dues until you officially don't own the property any longer. And just an FYI, filing bankruptcy doesn't always end a homeowner's obligation to his Association, so be sure to seek legal advice.

I recently read a refreshing article about how FHA appraisal guidelines are not as strict as they used to be. I am hoping the appraisers will start taking this to heart because I have had some crazy requirements with FHA Appraisals ( carpet needing to be cleaned and the grass to be mowed seem to come to mind).

Steve Lines with Academy Mortgage writes in the Arizona Journal of Real Estate & Business about the requirements. Basically he states that FHA permits an "AS IS" appraisal for FHA loans for property's that have problems that have occurred from lack of maintenence or normal wear and tear. These guidelines have been in place since January 2006, but I haven't run into an appraiser who has done it that way yet.

FHA does state what is a Definite Repair Needed:

Inadequate access from bedrooms to exterior of home.

Leaking Roofs

Structural Problems (foundation, trusses, beams etc)

Defective Paint if constructed before 1978

Defective exterior Paint constructed after 1978 if finish is not protected

Other than those most other items can pass an FHA Appraisal. Good to know if you didn't already know this! The majority of loans I have done in the last 2 years are FHA, so I am always looking for more information so I can know what to expect for my buyers.