Article Courtesy of The Tampa
By Susan Taylor Martin
June 21, 2015
Seven years ago, Renee Abuton realized she was
juggling too much — student loans, car payments, mortgage payments and
homeowners association fees.
Abuton, then a single parent, declared bankruptcy and let the mortgage
company repossess her Pasco County home. Once the company had the
property, she figured, it would start paying the HOA fees.
|Although Abuton had been locked
out in 2008, the lender didn't take title to the house
until several years later. In the meantime, while the
house remained in her name, he was responsible for all
HOA fees that accrued.
A few weeks ago, Abuton got a bill for 80 months' worth
of delinquent fees — a total of $28,000.
"When you're struggling to go from week to week and you
get something like that, it's a bit overwhelming,''
Abuton, 52, said.
In the past year, some banks have started playing
hardball with borrowers in bankruptcy who say they will
surrender their homes but actively fight foreclosure. At
the banks' behest, at least three Florida judges have
taken steps to punish debtors who failed to honor their
agreements to surrender their property.
Renee Abuton holds a letter she received saying
she now owes $32,000 in unpaid Home Owners Association dues even
though the bank took back her Holiday home
eight years ago.
The other side of the story involves people like
Abuton. They willingly surrendered their homes and moved out, only to
find they are still responsible for years' worth of HOA fees and other
liens because the lender dragged its feet in taking title.
"I'm not saying there aren't abuses by some debtors, but I think,
systematically, what the banks have done is much more abusive,'' said
Joel Treuhaft, a Palm Harbor lawyer representing Abuton.
There is no way to tell exactly how many people who declared bankruptcy
have found themselves in the same predicament as Abuton. But other
lawyers say it's a common problem.
"I see a lot of frustrated debtors who truly want to surrender their
home, but with the lenders taking their sweet time in the foreclosure
process, many of these debtors end up with the property still in
their names after the bankruptcy is over,'' Samantha Dammer, a Tampa
Especially "frightening,'' as Dammer puts it, are cases in which a
homeowners or condo association is involved.
"I have folks that have walked away from upside down condos, (on which
they owe more than the condo is worth) and years later, they are hit
with crippling debts for the unpaid assessments,'' she said.
Under Florida law, lenders can't be held liable for more than 12 months
of past-due HOA payments, or 1 percent of the total mortgage amount,
whichever is less. As a result, it can behoove a lender to delay taking
title if the delinquent fees run into the thousands of dollars.
Abuton didn't realize that when she made the painful decision in 2008 to
file a bankruptcy petition.
A Wisconsin native, she moved with her daughter to the Tampa Bay area to
be close to relatives and study architecture at St. Petersburg College.
She went to work for an engineering firm and bought a villa-style home
in the Edgewood of Gulf Trace community in Holiday.
"I bit off more than I could chew,'' she said. "I had been trying to
juggle going to school, working and handling a household, and the HOA
fees had gone up quite a bit. Then some of my appliances broke,
and I had to get those replaced. There was just a number of things that
didn't go my way.''
Four months after filing her bankruptcy petition, Abuton got a discharge
of most of her debts except for the student loans and the mortgage. She
already had moved out of the home in late 2008 when she got a letter
from the mortgage company saying it was going to "winterize'' the house
and change the locks.
"In my ignorance, I thought that was the foreclosure,'' she said. "It
really wasn't; they were just protecting the property.''
A few years later, Abuton was at work when an officer of the homeowners
association came by. He told her the house had flooded and that she
needed to do something about it.
"I said, 'There's nothing I can do because the bank owns it.' He said,
'Your name is still on the deed,'" Abuton said.
Abuton's mortgage had been bundled with others into a security called
the Oakmont Mortgage Pool 285 LP. Lawyers for the pool didn't start
foreclosing until 2011 and didn't officially complete the process until
By then, the homeowners association had gotten a judgment against Abuton
for $28,880 in delinquent dues and attorneys fees.
Neither the attorney nor the property management company for the
association returned calls to comment. Records show the HOA has been
active in going after owners who don't pay their fees, which
associations rely on for maintenance and repairs of common areas like
In May, the association proposed a settlement whereby Abuton would pay
off the fees in 80 monthly payments of $350, ending in 2022.
Abuton, since remarried, said she shouldn't have to pay since she hasn't
lived in the house since 2008. Her attorney, Treuhaft, thinks her best
bet is to try to force the mortgage company to pay most of the amount
since it had possession of the property for years after she filed her
"That still makes (her) liable for one or two months post-petition,'' he
said. "But it's better than 80 months.''