“The Torreses moved into the home in August. Chase filed foreclosure papers in November against the heirs to the previous owner’s estate. A property management company was soon knocking on the Torres’ door saying they needed to leave because the house was in foreclosure and the locks were being changed.”
Renters, be aware: Foreclosure maneuver affects you
Cunning South Florida real estate investors are buying titles to homes on the cheap through community association foreclosures then renting them out until the bank catches up.
It’s the latest tactic aimed at capitalizing on South Florida’s quagmire of vacant and foreclosed homes.
And since banks — the primary lien holder on the homes — sometimes take years to foreclose, the strategy could offer the investor a hefty return. Homeowner association foreclosures are usually based on unpaid dues, with judgments far less than what is owed on the mortgage. A savvy investor can pick up a home for a few thousand dollars from an association foreclosure auction and make that money back in several months’ worth of rent.
But while the method pays starving homeowners associations their back dues and puts money in the investor’s pocket, unwitting tenants may get a surprise when a lender comes calling to repossess the home.
That’s what Daniel Torres said happened to his elderly parents after renting a home in the Covered Bridge community west of Lake Worth.