Westchester foreclosure advice
April 7, 2010 3:25 PM Subscribe
I need advice/an attorney recommendation. We live in Westchester County, NY, and are considering walking away from our co-op mortgage.
We paid $244,000 for a place that is falling apart (the plaster ceiling collapsed, for starters). Looking at recent sale prices, I believe that we would now have a hard time getting $150,000. The maintenance was high to start with, and is now crazy high. PLUS, it is so noisy that we rarely sleep through the night, AND we have insane neighbors who hate our dog, so they tell people that we are drug-addicted child molesters, and follow us around screaming the same.
Anyway, it's hard to see the sense of spending $50,000 on repairs and renovations for a place that is a nightmare to live in, and is close to unsalable. What I most want to know is how likely and how hard can a coop pursue you for maintenance, assuming the bank will take the place back. I am not interested in discussions of the morality of walking away. If we could stand to keep living here, we would, but the stress is killing us.
We paid $244,000 for a place that is falling apart (the plaster ceiling collapsed, for starters). Looking at recent sale prices, I believe that we would now have a hard time getting $150,000. The maintenance was high to start with, and is now crazy high. PLUS, it is so noisy that we rarely sleep through the night, AND we have insane neighbors who hate our dog, so they tell people that we are drug-addicted child molesters, and follow us around screaming the same.
Anyway, it's hard to see the sense of spending $50,000 on repairs and renovations for a place that is a nightmare to live in, and is close to unsalable. What I most want to know is how likely and how hard can a coop pursue you for maintenance, assuming the bank will take the place back. I am not interested in discussions of the morality of walking away. If we could stand to keep living here, we would, but the stress is killing us.
You might also have more leverage considering how co ops are usually more like a business .
posted by majortom1981 at 3:55 PM on April 7, 2010
posted by majortom1981 at 3:55 PM on April 7, 2010
ny co-op resident and board member here: have you tried talking to the Board of Directors about your living situation? What has their suggestion been?
you're dealing with two different financial issues: owing the mortgage to the bank and owing maintenance to the co-op.
As a shareholder, you're obligated to pay maintenance and common area charges. Based on what you've said about the amount of repair needed, it doesn't appear to be in the bank's interest to take control of those shares, especially since they would then be responsible for paying maintenance.
What happens if you stop paying maintenance: the co-op then takes you to court. Because of the clear-cut nature of most co-op bylaws (you're a shareholder, you have a stock certificate, this means you must pay maintenance) it's hard to see a scenario in which you come out on top of the equation. If you have a job, the court can order your wages garnished. Alternatively, the co-op could cancel your stock certificate, sell the unit and recoup the overdue maintenance from those monies. This will leave you owing a mortgage with nothing to show for it.
I would strongly encourage you to talk to the Board of Directors about this and see what solutions you all can come up with, BEFORE walking away.
posted by dubold at 4:22 PM on April 7, 2010
you're dealing with two different financial issues: owing the mortgage to the bank and owing maintenance to the co-op.
As a shareholder, you're obligated to pay maintenance and common area charges. Based on what you've said about the amount of repair needed, it doesn't appear to be in the bank's interest to take control of those shares, especially since they would then be responsible for paying maintenance.
What happens if you stop paying maintenance: the co-op then takes you to court. Because of the clear-cut nature of most co-op bylaws (you're a shareholder, you have a stock certificate, this means you must pay maintenance) it's hard to see a scenario in which you come out on top of the equation. If you have a job, the court can order your wages garnished. Alternatively, the co-op could cancel your stock certificate, sell the unit and recoup the overdue maintenance from those monies. This will leave you owing a mortgage with nothing to show for it.
I would strongly encourage you to talk to the Board of Directors about this and see what solutions you all can come up with, BEFORE walking away.
posted by dubold at 4:22 PM on April 7, 2010
David Gladstone
One Barker Ave
White Plains, NY 10601
This gentleman handled a real estate matter for me. I have no idea if he handles this type of situation, but he did a good job for me on my totally unrelated RE matter.
Memail me for a phone number or I am sure he is listed.
As for advice, take dubold's advice. Talk to your Board. I do not think that the element of surprise helps in anyway in this situation. Your best bet is to negotiate it out or at least try.
posted by JohnnyGunn at 7:45 PM on April 7, 2010
One Barker Ave
White Plains, NY 10601
This gentleman handled a real estate matter for me. I have no idea if he handles this type of situation, but he did a good job for me on my totally unrelated RE matter.
Memail me for a phone number or I am sure he is listed.
As for advice, take dubold's advice. Talk to your Board. I do not think that the element of surprise helps in anyway in this situation. Your best bet is to negotiate it out or at least try.
posted by JohnnyGunn at 7:45 PM on April 7, 2010
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That said, NY is weird:
In some states, lenders are only permitted a single lawsuit to collect mortgage debt. This plays out differently depending on the state’s laws. In New York, for example, a lender must choose between the actions of foreclosing on the property or suing to collect the debt.
On top of that, many many co-ops have a clause in their agreement which gives the board right of first purchase for any units that are put up for sale. You may want to take your grievances to the board with the understanding that if you don't get some sort of relief, you'll walk away and there will be an empty, crumbling unit in the building for at least a year while you clear forclosure.
posted by Oktober at 3:33 PM on April 7, 2010 [1 favorite]