Housing Pain Pits Neighbor Against Neighbor in Florida

But it galls him when neighbors stop paying their mortgages and maintenance fees, and leave the cost of community upkeep to others. "I am paying for these guys," said the 75-year-old sitting poolside, a diamond stud in his left ear.

Last year, he took matters into his own hands. Near the mailbox of each condo building he posted a list of residents delinquent on their maintenance fees, with the message "Pay up or move out" and the same in Spanish, Pague O Mudese. He also tried, unsuccessfully, to get the cable company to cut off service to nonpayers.

The public shaming angered some of those named. "You know where I live—come and tell me that to me face," said Lorena Garcia, 36, who lost her job and ability to pay.

The storm that struck the housing market has strewn many casualties—lenders, builders, real-estate agents, mortgage-bond investors.

Add to the list the comity of certain communities where residents live close together, some of them paying their mortgages and homeowner-association fees, and some not.

As banks slow foreclosures amid concerns about sloppy record keeping, some delinquent homeowners get to stay put even longer without paying. The delays are further inflaming some neighbors who consider that unfair.

The condo complex Mr. Schulman and Ms. Garcia share, called International Village, has installed a fingerprint-scanning device at its central clubhouse, to keep residents who are more than 90 days behind on their maintenance fees from swimming in the pools, playing on the racquetball courts and using the game room, where canasta and mah-jongg competitions are held.

In a particularly stark example of housing tensions found in many places to varying degrees, the International Village homeowners association responded to the banks' slowdown in foreclosures with an aggressive step: It began its own foreclosure process. Florida law permits that under certain circumstances. A nonprofit homeowners association can take temporary title of residential units from people who aren't paying monthly fees they agreed to pay.

The scene of these frictions is a 28-acre community in southeastern Florida's Broward County that spreads out on a peninsula, surrounded by a canal, a lake and an eight-foot stone wall. Oak trees shade the gated entrance to International Village, at the center of which is the Bavarian clubhouse, built with a 24-foot ceiling and stone fireplace. Three-story residential buildings, each with about 76 condos, are grouped according to their architectural roots, bearing names like Yorkshire and Bordeaux. In the morning, residents gather at the pool for "aquacise."

Early marketing brochures for the complex, built in the 1970s, lured well-off retirees and snowbirds by promising "seventh heaven for people who insist on living first class."

Later, easy lending during the housing boom put the condos within reach of lower-income buyers. According to Michael Schenkel, a real-estate professional who owns three units in the complex and manages others, average prices for its one-bedroom condos peaked at about $120,000 in 2006.

Then Florida's sagging economy started costing residents their livelihoods and ability to pay. Ms. Garcia bought a two-bedroom in International Village in 2005 for $190,000, but she lost her job. With her cash dwindling as she went through a divorce, she says, she stopped making her $1,500 monthly mortgage payments in 2008.

Special assessments pushed up the monthly maintenance fee she owed to the homeowners association. Ms. Garcia didn't pay that, either.

Now, owners of about 128 of the 832 units at International Village, just over 15%, are 90 days or more behind on their fees. Banks won't lend on residences in the complex until the percentage of fee delinquents drops below 15, according to Mr. Schenkel.

The problems feed on themselves: "Banks will not write mortgages in communities with high delinquencies," he said, "and property values will not increase until we get financing from major banks." He says the value of one-bedroom units has tumbled as much as 75%.

With the homeowners association unable to collect maintenance from so many units, the complex is showing the wear: torn screen doors, roofs in need of repair, carpets getting shabby. Earlier this year, the total of delinquent fees passed $1 million, equal to a third of the association's annual budget.

"The foreclosure process takes over two years," Mr. Schenkel said. "You can get away with living for free for two years, not paying mortgage and maintenance."

Larry Kornblith takes a dim view of that. "The ones who are delinquent are parasites," the 82-year-old bluntly declared, relaxing near the pool in a Fila shirt and white Nike tennis shoes. "If you can't afford it, get out."

There are divisions, too, among the people current on their payments, because they don't all agree on how the homeowners association should deal with those who aren't.

Doug Meyers, a resident who owns more than a dozen units and is up to date on his payments, voted on the association's board against installing the fingerprint scanner. He was skeptical it would work. He says some neighbors accused him of protecting residents who were delinquent.

"They make it personal. It bothers me, personally. It hurts me," said Mr. Meyers, 54, adding that he now tries to avoid some fellow residents.

Others wanted the association to get tougher. Among these was Michele Tersigni, a 53-year-old resident who works as an administrator at a doctor's office. She won a seat on the homeowners-association board early this year and in May became its president.

She quickly made changes, such as hiring security guards directly instead of through a service, to save money. And, responding to residents' complaints about people staying on in homes they were no longer paying on, she hired new lawyers who would be more aggressive.

After foreclosure problems such as "robo-signing" of documents erupted this fall, new applications for court approval of foreclosures in Broward County—which totaled 1,693 in September—tumbled to 224 in November and 137 in December through the 23rd of the month, according to Legalprise Inc., a data firm. Countywide, foreclosure applications on more than 38,000 residential units are awaiting a court's approval to proceed.

The homeowners association countered the delays. Acting under the Florida law, it took temporary title to two condos in October and another in November. It plans four to five more in January. The move enables the association to rent out the units and get them back to producing income.

If lenders eventually foreclose on the condos, the association can start proceedings against the lenders to obtain some past-due maintenance fees. Lenders that take over units are liable for maintenance fees as long as they own them.

Ms. Tersigni says something had to be done because maintenance was slipping. "I just want to give people who are paying the rights they deserve," she said.

The village is abuzz, she added, with stories of owners not paying even though they could afford to. Ms. Tersigni's predecessor as board president, Scott Samuels—who admits to not being aggressive enough in dealing with the delinquency problem—said some owners were letting their units go into foreclosure while renting them out to tenants not registered with the association.

"Owners are collecting money, and we are not getting our money," he said.

Ms. Tersigni said some owners "make the money—they just refuse to pay because they can get away with it. They will put money aside and buy something else."

Ms. Garcia says that was never true in her case. "Every house has its own problems. You can't judge people," Ms. Garcia said. The homeowners association, to her mind, is "taking advantage of people who really have problems."

In August, about two years after she stopped paying her mortgage, Ms. Garcia lost her apartment to a foreclosure by the lender, although she continued to live in International Village in someone else's unit.

On the day she and her husband were vacating their own apartment, two female neighbors openly celebrated while making their way to the pool. "Thank God they are moving out," said one, a blue ball cap pulled over her eyes.

The other, wearing an olive-green dress and sunglasses, said she couldn't understand why Ms. Garcia had been allowed to stay so long. "It takes so long to get them out," she said, and then listed others she said were behind on payments.

Some residents are troubled by the tensions, which are reflected in a sign put up near the clubhouse: "The prior leadership did not take a pro-active position with delinquents who failed to pay. We must not let this happen again."

"I feel like we are being singled out, like we're not part of the community," said one young resident, who added that he wasn't going to provide a fingerprint for access to the clubhouse because he knew he would be denied. "What do they want next, my DNA?"

Franck Noel, 32, said the homeowners association moved to foreclose on his unit even after he paid $1,753.79 in late fees. When he brought his situation up at a board meeting it got unruly. Someone called the police, who Mr. Noel says stayed out by the gate and didn't enter the clubhouse.

The police department says it was informed there was hostility inside the clubhouse relating to a foreclosure and there was a request that the subject be removed. But no police report was filed on the incident.

Mr. Noel said a resident dragged him out by his collar. Ms. Tersigni said he left without being forcibly removed.

She acknowledged that the move against his residential unit was an error and said the association eventually recognized this and dealt with it.

Mr. Noel, noting that some board members own multiple units, alleged that the association was eager to foreclose because some on the board "want to buy these units cheap and own them for themselves." Mr. Meyers, a board member who owns a number of units, dismissed any talk of his manipulating the system as "lies" and "slander."

Said Mr. Noel: "I don't trust anybody here."