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Home Foreclosures: 15.3.3.4.1 Overview

The most common reason for foreclosure upon a home secured by a reverse mortgage is the maturity of the loan due to the death of the homeowner. Upon the death of the homeowner, the property secured by the reverse mortgage is passed to the borrower’s heirs by will, intestacy, or other state law mechanism and the reverse mortgage becomes payable in full.

Home Foreclosures: 15.3.3.4.2 Procedural defenses

In addition to general procedural prerequisites to foreclosure,165 when maturity occurs and foreclosure proceeds after the homeowner’s death, advocates should consider any applicable state laws that impose additional requirements for foreclosure actions when the borrower is deceased.166 For example, state probate law may require different procedures for foreclosure after the death of the borrower.

Home Foreclosures: 15.3.4 COVID-19 Protections

FHA-insured HECM loans are subject to the protections of the CARES Act and subsequent policies issued by HUD to address the impact of the COVID-19 pandemic.194 The two main categories of relief are the foreclosure moratorium, and COVID-19 forbearance.

Home Foreclosures: 15.4 Raising Origination Claims

Chapter 7, supra, of this treatise explains how to raise origination claims in defense of foreclosure. Generally these claims challenge unfair lending practices used in originating the loan. Unfair lending practices refer both to the substantive terms of a contract and to the process by which the contract is struck and enforced.

Home Foreclosures: 15.5 Raising Discrimination Claims

The Fair Housing Act, the Equal Credit Opportunity Act, and state and local ordinances bar discrimination in mortgage origination and servicing. Various actions by reverse mortgage originators, servicers, and HUD may be subject to challenge under one or more of these laws. For example, foreclosures on non-borrowing spouses are likely to disproportionately harm women, since women are more likely to have been left off the loan (as, often, the younger spouse) and to live longer than a male borrowing spouse.

Home Foreclosures: Introduction

This appendix is a summary of state laws governing the foreclosure of condominium and homeowner association assessment liens. It describes the method of foreclosure, the scope of the lien, required notices, permitted fees and interest, and the right, if available, to challenge the lien. It also describes the right of the unit owner to redeem the condominium unit after a sale.

Home Foreclosures: Alabama

Ala. Code §§ 35-8-1 to 35-8-22 (Condominium Ownership Act); §§ 35-8A-101 to 35-8A-417 (Uniform Condominium Act)

Applicability: The Uniform Condominium Act, Ala. Code §§ 35-8A-101 to 35-8A-417, applies to condominiums created after January 1, 1991. With limited exception (see §§ 35-8A-302(a)(10), 35-8A-315), the provisions of the Uniform Condominium Act summarized below also apply to condominiums created before the effective date.

Home Foreclosures: Alaska

Alaska Stat. §§ 34.07.010 to 34.07.460 (Horizontal Property Regimes Act); §§ 34.08.010 to 34.08.995 (Common Interest Ownership Act)

Applicability: The Common Interest Ownership Act, Alaska Stat. §§ 34.08.010 to 34.08.995, applies to condominiums created after January 1, 1986. Communities with limited expenses are exempt from many portions of the statute.

Home Foreclosures: Arizona

Ariz. Rev. Stat. Ann. §§ 33-1201 to 33-1270 (Condominium Act)

Applicability: Arizona’s Condominium Act, Ariz. Rev. Stat. §§ 33-1201 to 33-1270, applies to condominiums created within the state without regard to the date the condominium was created. § 33-1201.

Home Foreclosures: Arkansas

Ark. Code Ann. §§ 18-13-101 to 18-13-120 (Horizontal Property Act)

Method of Foreclosure: Not specified.

Notices: Not specified.

Interest, Fees, and Costs: Not specified.

Scope of Lien: Not specified.

Ability to Contest Lien: Not specified.

Lien Extinguished: Not specified.

Explicit Right to Cure: Not specified.

Home Foreclosures: Colorado

Colo. Rev. Stat. §§ 38-33-101 to 38-33-113 (Condominium Ownership Act); §§ 38-33.3-101 to 38-33.3-319 (Common Interest Ownership Act)

Applicability: The Common Interest Ownership Act, Colo. Rev. Stat. §§ 38-33.3-101 to 38-33.3-319 (which covers condominiums, co-operatives, and planned communities), applies to condominiums created after July 1, 1992. However, § 38-33.3-316 of the Common Interest Ownership Act applies to all condominiums, including those created before the effective date.

Home Foreclosures: Connecticut

Conn. Gen. Stat. §§ 47-68a to 47-90c (Condominium Act); §§ 47-200 to 47-299 (Common Interest Ownership Act)

Applicability: The Common Interest Ownership Act, Conn. Gen. Stat. §§ 47-200 to 47-299 (covers condominiums, co-operatives and planned communities), applies to condominiums created after January 1, 1984. Except for § 47-257, the provisions of the Common Interest Ownership Act summarized below also apply to condominiums created before the effective date.

Home Foreclosures: Florida

Fla. Stat. §§ 718.101 to 718.622 (Condominium Act); §§ 721.01 to 721.32 (Vacation Plan and Timesharing Act); §§ 721.80 to 721.86 (Timeshare Lien Foreclosure Act) (West)

Applicability: A timeshare plan subject to both the Vacation Plan and Timesharing Act, Fla. Stat. §§ 721.01 to 721.32, and the Condominium Act, §§ 718.101 to 718.622, must meet the requirements of both chapters, with limited exception. § 721.03(3). In the event of a conflict between the two chapters, the provisions of chapter 721 prevail. § 721.03(2).

Home Foreclosures: Georgia

Ga. Code Ann. §§ 44-3-70 to 44-3-116 (Condominium Act); §§ 44-3-220 to 44-3-235 (Property Owners’ Association Act); Apartment Ownership Act, Ga. L. 1963, p. 561

Home Foreclosures: Guam

Guam Code Ann. tit. 21, §§ 45124 to 45155 (Horizontal Property Act)

Method of Foreclosure: Manager or board of directors may foreclose in the same manner as a mortgage on real property. In such a foreclosure, unit owner shall be required to pay reasonable rental if so provided in the bylaws, and plaintiff is entitled to appointment of receiver to collect the same. § 45124.

Notices: Not specified.

Interest, Fees, and Costs: Not specified.

Home Foreclosures: Idaho

Idaho Code §§ 55-1501 to 55-1528 (Condominium Property Act)

Method of Foreclosure: The lien may be foreclosed by power of sale, in the same way as a deed of trust, or any other method permitted by law. § 55-1518.

Home Foreclosures: Illinois

765 Ill. Comp. Stat. §§ 605/1 to 605/32 (Condominium Property Act)

Method of Foreclosure: After a lien has been recorded, it may be foreclosed by an action, in the same way as a mortgage of real estate. 765 Ill. Comp. Stat. § 605/9(h). See also 735 Ill. Comp. Stat. §§ 5/9-101 to 5/9-120 (Eviction Act). The Condominium Property Act allows an association to bring an eviction action against a defaulting unit owner for the benefit of all the other unit owners under the Code of Civil Procedure. 765 Ill. Comp. Stat. § 605/9.2.

Home Foreclosures: Indiana

Ind. Code §§ 32-25-1-1 to 32-25-9-2 (Condominiums)

Method of Foreclosure: The lien may be filed and foreclosed by suit, like a mechanic’s and materialman’s lien. § 32-25-6-3(b).

Notices: Not specified.

Interest, Fees, and Costs: Not specified.

Scope of Lien: Unpaid common expense assessments become a lien at the time of assessment. § 32-25-6-3(a).

Ability to Contest Lien: Not specified.

Home Foreclosures: Iowa

Iowa Code §§ 499B.1 to 499B.21 (Horizontal Property Act)

Method of Foreclosure: The lien may be foreclosed by suit in the same manner as a mortgage of real property. § 499B.17.

Notices: Not specified.

Interest, Fees, and Costs: Not specified.

Scope of Lien: The council has a lien for all unpaid common expense assessments. § 499B.17.

Ability to Contest Lien: Not specified.