I would borrow from the criteria that the banks are using today for approving modifications and short sales. Hardship letter, bank statements, credit report, etc. There would be incremental planning, cost and effort involved on the part of HOAs to contract this into the collections process, but on the balance it could be much less costly than offering no alternatives but foreclosure. And if one didn't qualify for a hardship deed back, that is the line right there.
Jim:
With you all the way.
Get the feeling a lot of "Devil Advocates"!
Per above, objective criteria can be established and occasionally some subjectively will enter in. That is why we have appeals Courts and Supreme Court. Impossible to cover all bases!
If buyers remorse simply harshly enforce collection terms.
If Joe Six Pack who should never have bought in first place is behind on rent, wages are being garnished, etc. will just pay MF current, bite the bullet.
If someone has decided they will not pay PCC guy a couple grand and will take hit on credit why not take for two years MF.
Maybe I am over simplifying, but if one donates to Senior Adviser resort is virtually guaranteed three year loss of MF and $1K+ to do quiet title search and get a valid deed.
Alternatively, they take a deed today and tomorrow they can rent and cover MF. Out of pocket cost is negligible. Then put on bulletin board, notify other owners, cut a deal with Wyndham sales, have a raffle, instead of giving employee of month cash, let individual and friend spend a couple nights, catch up on heavy unit maintenance, etc.
Think out of the box, get out of the box, sell the box, put a salesperson in the box!