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Student Loan Law: 4.4.1 Introduction

The Department of Education (the Department) encourages the granting of forbearances to prevent borrowers from defaulting on their loans or to permit borrowers in default to resume “honoring” their loan obligations.140 Forbearance is defined to include a loan holder agreeing to a temporary stoppage of payments, an extension of time for making payments, or acceptance of smaller payments.141 As of late, forbearances most often mean allowing a temporary pause or postponement in making payments.

Student Loan Law: 4.4.4 Discretionary and Administrative Forbearances

The FFEL regulations make a distinction between discretionary and mandatory forbearances. The Direct Loan Program does not make this distinction. If a Direct Loan borrower qualifies for forbearance, the regulations provide that the Secretary of the Department of Education (the Secretary) will grant forbearance, with no reference to discretion on the Secretary’s part.170 The grounds for forbearance vary between the two programs in some respects.

Home Foreclosures: 14.1.1 The Power of the Condominium Association to Collect Dues and Levy Assessments

As a member of a common interest community, a condominium unit owner is responsible for paying dues and other applicable fees to the condominium or homeowner association.1 The individual is also, of course, responsible for making payments on any mortgage or mortgages that are on the property. A default with respect to either of these obligations may lead to foreclosure proceedings brought by the association, the lender, or both.

Home Foreclosures: 14.1.2 Dual Threat of Foreclosure by Lender and Condominium Association

A condominium unit owner who is unable to continue both making payments upon a mortgage and paying association dues or other fees faces a dual threat of foreclosure. Just as a lender can foreclose upon a mortgage or deed of trust following default, so can a condominium association obtain a lien against the owner for the amount owed and then proceed to foreclose upon the lien if the debt remains unpaid for a given period of time.

Home Foreclosures: 14.1.3 Overview of State Condominium Acts

Condominiums are purely creatures of statute.7 Because condominiums are creatures of statute, unit owners’ rights and responsibilities are not the same as those of real property owners at common law.8 All states and the District of Columbia have enacted statutes9 that authorize the establishment of condominiums and include various provisions relating to their governance and operation.

Home Foreclosures: 14.1.4 Uniform Common Interest Ownership Act

In 1982, the National Conference of Commissioners on Uniform State Laws (Uniform Law Commissioners) promulgated the Uniform Common Interest Ownership Act (UCIOA). This Act was intended to consolidate and subsume earlier acts, including the Uniform Condominium Act, the Uniform Planned Community Act, and the Model Real Estate Cooperative Act. The Act addressed the formation, governance, management, and termination of common interest communities, including condominiums.

Home Foreclosures: 14.2.1.2 Interest, Fees, and Costs

Most state statutes provide that interest on past due assessments may be included in the association’s lien. While a number of laws merely state that interest is allowable, many laws are more specific about placing limitations upon the rate of interest.

Home Foreclosures: 14.2.1.3 Fines for Violations of Association Rules

Numerous state laws state that the lien may include not only unpaid assessments, but also may include fines for violation of the declaration, bylaws, rules, or regulations of the association.49 Certain states place limits upon the amount of fines that may be assessed.50 Connecticut courts have stated that, in an action by an association to recover fines from a unit owner, the association has the burden of proving that the fines were validly imposed.51 An

Home Foreclosures: 14.2.1.5 When Does the Lien Arise?

The scope of the lien necessarily depends upon the date that the lien arises. This date also has significant implications for determining the lien’s priority relative to other liens that may exist on the property at issue. In addition, the date a lien arises is significant in states where the governing statute provides that a lien expires or is extinguished after the passage of a certain time period.

Home Foreclosures: 14.2.1.6 Automatic Lien vs. Filing and/or Recordation Requirement

While some states provide that the association has an automatic lien for assessments from the time they become due, many states provide that a lien is either not effective or not perfected until the lien, a notice of lien, or a claim of lien, is recorded.76 But even in these states, a claim of lien may not be an absolute prerequisite to enforcing the lien where a first mortgage is not involved and the declaration was recorded.77 If a claim of lien is incorrect with respect to the elements specified

Home Foreclosures: 14.2.2 Expiration/Extinguishment of the Lien

A condominium association’s lien is subject to expiration if no action is taken upon it within a statutorily prescribed period of time. Time limitations upon bringing proceedings upon the lien are imposed in approximately two-thirds of the state statutes.

Home Foreclosures: 14.2.3.1 Introduction

The association’s ability to foreclose is necessarily restricted by commonly recognized limitations such as notice requirements and lien expiration provisions, which are included in numerous statutes. As discussed above, some laws affect the scope of the lien and provide that an association may not foreclose on a lien that consists solely of late fees99 or fines,100 and some provide that the lien includes only unpaid assessments.

Home Foreclosures: 14.2.4 Premature Foreclosure

When an association forecloses a lien pursuant to the rules set out in its declaration and in the state condominium act, an argument that foreclosure was invalid because it was premature may be difficult to sustain.125 However, even when an association seeks to foreclose a valid lien on a condominium unit and complies with the governing statute, a court may nevertheless deny a judgment of foreclosure if it considers the suit premature under the particular circumstances of the case.

Home Foreclosures: 14.2.6 Foreclosure Discouraged During COVID-19

The COVID-19 pandemic has made it harder for millions of homeowners to pay their mortgages. To reduce the risk of widespread foreclosures, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).138 The CARES Act gave some borrowers temporary protection from foreclosure, both by establishing a foreclosure moratorium and offering homeowners forbearance of mortgage payments. But about a third of all borrowers are not covered by either provision.

Home Foreclosures: 14.2.7 Foreclosure vs. Personal Lawsuit Against Unit Owner

An association may opt to bring an action for breach of contract against a unit owner in order to recover delinquent assessments or fines.145 In addition, the board of managers of a condominium association may be entitled to maintain a cause of action for possession against a unit owner in default under a state’s forcible entry and detainer or eviction statute.

Home Foreclosures: 14.3.1 Same Manner as a Lien on Real Property

Many state laws provide that an association may foreclose upon a unit in the same manner as a mortgage or deed of trust on real property.155 The intent of these statutes is presumably to simplify the procedural aspects of the enforcement of a lien for assessments against a condominium.156 Where laws governing the disposition of real property and civil procedure provide that a complaint must be filed prior to a foreclosure sale, an association may not, for example, pursue through writ of executio

Home Foreclosures: 14.3.2 Lien Recordation Requirements

Many states provide that a lien for assessments must be perfected prior to foreclosure through recordation of the lien, a notice of lien, or a claim of lien. In some states, recordation of the declaration may be sufficient to perfect the association’s lien, or the association may be afforded an automatic lien from the time the assessment becomes due.

Home Foreclosures: 14.3.3.1 Pre-Acceleration Notice

Most states impose notice requirements upon associations prior to foreclosure upon an owner’s unit. Notice requirements can be integral to the process of foreclosure, since in some jurisdictions the failure to adhere to certain prescribed practices can operate to extinguish the lien or void a foreclosure sale. From a timing perspective, requirements can range from pre-acceleration notice to postforeclosure sale notice, depending upon applicable law.