Homeowner Association Is Foreclosing
Can anybody enlighten me on how it all goes down if a Homeowner Association is foreclosing on a property owner. I have heard talk of this before but can a HOA actually foreclose on a property that may only be delinquent a few hundred bucks. And then kick the homeowners out of their property? Just would like more clarification on this? Thanks. (I'm in Florida if that helps.)
In my state, the answer is yes. Florida has some unique homestead laws that may affect the expected outcome.
Check with a local real estate attorney.
If this involves actual property that you own, I agree that you need to seek legal council. Otherwise, If your just wondering...
Yes, they have the right to place a lien on the property and can foreclose that lien if it is for assestments due. They cannot foreclose for fines unpaid. Their lien will be superior to all other liens except ad-valorem taxes and the 1st mortgage.
Why not just pay the couple hundred bucks?
[ Edited by nasof on Date 02/26/2004 ]
Assuming this is not your home it looks like you have found a potentially motivated seller. Do some research and then go talk to the homeowner. You may find a great win-win for both of you.
Roger
Floriida has some tough Homeowners Associatiions. Some HOA's have first rights of refusal on any proposed sale and the approval of the new purchaser..
They have the right and frequently do foreclose. The purchaser at the auction take the property "subject to " the seniior liens while the junior liens are extinguished( divested).
Thanks for the replies guys. And No, this is not my house. I'm just curious because a homeowner that I sent a pre-forclosure letter to contacted me. So let me see if I understand this. If the HOA forecloses and the property goes to auction. The property will be granted to the highest bidder. Correct? Highest bidder will pay his/her bid amount plus the HOA lien. What happens to the 1st Lienholder? and 2nd if any? I guess I'm still a bit confused
"I guess I'm still a bit confused"
If there is a forclosure, you get the rights of the forclosing lienholder. Junior liens are extinguished. Senior liens (recorded prior to the one forclosing) are valid and you must pay them to keep them form forclosing on you.
It sounds like the property is free and clear and the HOA is demanding their payment. This may be an attractive deal if the title is not clouded by other liens.
Eric & Rosa
[addsig]
The property does have a 1st mortgage on it. What happens to the 1st when the HOA is the one foreclosing?
Great country we live in. Each of us are afforded the same opportunites for housing. You have free will to choose where you want to live. You can choose to live in a community that has HOA fees or choose not to live in a community that has HOA fees. If you choose to live in a community that has HOA then you are obligated to pay them. If you do not pay your HOA fee then they can foreclose. It is not complicated and not a conspiracy.
I would agree with Kingmonkey's sentiments (but not the choice of words). I think a lot of HOA's are ridiculously overpriced and overbearing. However, I am not so sure if they can or can't forclose on a given property. I know for a fact that they can place liens on your home thereby making it difficult to sell the property.
The HOA for a property I own recently increased their monthly assessments by over 30% but (get this) they cut some of the services that they had previously been providing.
I am so upset but because I am on out-of-state owner, I don't have the ability to really take them to task on this issue.
Does anyone have any idea what options are available to me?
Thanks,
JS
Gee Mitch,
tell us how you really feel
C-
Seriuosly,
I love condo's and PUD's just because of the maintenance issues. What I hate is the HOA's. My HOA fees were only $35 a month but that paid for the partking lot and grounds upkeep.
What I didn't like was the HOA politics kinda lame., like, when we got a surplus in funds there was such an uproar on how to spend the money, the HOA president quit, they had emergency elections and the damned liberal, democratic pukes took over the HOA. I was appalled by the whole thing.
All I wanted out of the deal was my lawn mowed, the parking lot swept and the HomeBoys kept off the property.
But yes Mitch, HOA's can and do foreclose and that is good "bidness" for you and me.
C-
Okay, this topic has gone off on a tangent. And nobody is answering my question!! What happens when the HOA forecloses and a the highest bidder is awarded the property? Since it's not the 1st that is foreclosing but the HOA, what happens to the 1st? Does it get wiped out? Can anybody please answer this?
Quote:
On 2004-02-26 16:15, wrote:
Okay, this topic has gone off on a tangent. And nobody is answering my question!! What happens when the HOA forecloses and a the highest bidder is awarded the property? Since it's not the 1st that is foreclosing but the HOA, what happens to the 1st? Does it get wiped out? Can anybody please answer this?
jonesoe30,
Your question was answered. If you are the winning bidder, you take the property subject to any and all superior liens.
Someone stated that if the hoa forecloses, all other leins are whiped clean? I don't think so. Most likely you will be responsible for any leins, deeds (1st, 2nd mortgage) that are recorded prior to the foreclosing hoa. If you have a property and want to know the chain of title, call the trustee who is going to have the sale and request a "trustee guarantee". normally this is about $20 and will give you the proper information you will need before bidding at the sale.
Never heard of a trustee guarantee. Is that only in AZ ? Will you explain what it means?
Thanks
Ted Jr
A trustee guarantee basically shows you the order of leins and loans on the property. If the 2nd is foreclosing on the property, the trustee guarantee will show you the superior note (1st mortgage) on the property along with any other superior leins. Not all trustee's will sell you a guarantee. If you pull up the recorded document from the accessor's office of the notice of sale, it will tell you who the trustee is. Once you find out who the trustee is, just give them a call and ask if they can furnish you this document.
Wingnut, I dont believe anyone said a HOA foreclosure wipes out all other liens (only junior liens) Each state has its own version of law on this topic (condos and HOAs) and not all states have Deeds of Trust. Not all states have foreclosure sales where a Trustee Guarantee is avail. I believe the original poster is from SC. South Carolina is a Mortage state, while AZ is a "Deed of Trust" state.
Here's a list:
www americasbestcoach.homestead.com/States.html
Quote:
On 2004-02-27 03:36, Wingnut wrote:
Someone stated that if the hoa forecloses, all other leins are whiped clean? I don't think so. Most likely you will be responsible for any leins, deeds (1st, 2nd mortgage) that are recorded prior to the foreclosing hoa. If you have a property and want to know the chain of title, call the trustee who is going to have the sale and request a "trustee guarantee". normally this is about $20 and will give you the proper information you will need before bidding at the sale.
[ Edited by nasof on Date 03/03/2004 ]
im a newby in this site but can you please clarify what you meant when you say that the the Quote:
On 2004-02-26 13:30, sammyvegas wrote:
Floriida has some tough Homeowners Associatiions. Some HOA's have first rights of refusal on any proposed sale and the approval of the new purchaser..
They have the right and frequently do foreclose. The purchaser at the auction take the property "subject to " the seniior liens while the junior liens are extinguished( divested).
hi, im a newby and my first time to this forum, do you mean that the purchaser at the auction can buy the property for the amount on the bid, then pay the senior lin holder like the first mortgage, property tax lien, and irs tax lien(if any), and homeowner association lien, then dont worry about any other junior lien attached to the property? please advise.
FL is becoming a hotbed for these sorts of HOA foreclosure actions ... seems to me the atty's (who persuade HOA's to allow them to handle) are the only ones who are really coming out ahead. I recently attempted a short sale proposal wherein the homeowner owed the HOA $3k. She lost her job, owed the senior mortgage holder approx. $160k, and $8k in property taxes over 3 years (that she didn't escrow when she refinanced). Fair market value for the property is approx. $170k.
HOA forced the foreclosure sale where there were no bidders ... thus, property reverted to HOA (which is not in the business of owning property) and homeowner was dispossessed of her home. There were no other existing liens, but I do believe any jr. liens would have been extinguished by the HOA foreclosure action. The HOA now has legal title subject to the mortgage which is senior. I negotiated a tentative agreement with HOA to pay half the amount owed, pending approval of my short sale proposal by the mortgage lender. Problem was, I was dealing with Household Finance ... a seedy company that refused a very reasonable offer. They wouldn't counter my offer(s) and I didn't want to keep bidding against myself.
These can be good short sale deals, if you can make the case for the sr. lienholder to discount the note ... thereby making payment of the HOA lien, any tax liens, or IRS liens affordable ... and leaving you with a decent profit margin. Didn't work out for me in this case ... but I'm on to the next deal and keeping it moving.