Beware of hidden foreclosure fees

Buyer unknowingly agrees to reimburse seller for taxes, pay condo dues

DEAR BENNY: I recently was the successful bidder on a condo. The closing was within 15 days of the sale, and a special warranty deed was conveyed for the amount of my bid. The closing agent told me after the closing that I had signed a memorandum of foreclosure agreeing to reimburse the seller for prepaid taxes and all amounts claimed owing by the condominium association.

The deed has been recorded and I paid the amount billed by the substitute trustee, which was my bid amount. Two months later, I have not heard from anyone about reimbursing the seller for prepaid taxes or any other charges. Should I be concerned about being billed for these items? –Tom

DEAR TOM: Have you reviewed that memorandum? Is that what it really says? In any event, if in fact you are legally obligated for those payments under the memorandum, I would not worry about reimbursing the seller for prepaid taxes. Let the seller come back to you if money is, in fact, owed.

Also, look at your HUD-1 settlement statement that you should have received when you went to closing (called escrow in the Western part of the country). Typically, all such adjustments — including prepaid real estate taxes — should have been adjusted at settlement.

I would, however, be concerned about the unpaid condominium fees. In general, those fees may create a lien against your property, and the condominium association could come after you for payment.