Yes, they can and they do. If you're short on cash, call the HOA and try to work out a payment plan. They'd normally rather do this then foreclose. It will be less costly on your part too as they will charge you for all the legal fees of foreclosure which might be much more than the HOA dues. I am seeing more and more HOAs foreclosing on properties in the DFW area.

Eric,

Yes, in the state of Texas our HOA's do have the legal right to foreclose on your property for unpaid association dues. However, that does not mean that they can take your home into foreclosure and wipe out your mortgage. This is what we would call "foreclosure non-free and clear". The buyer of your HOA bids would only receive ownership of the house, but w/ all higher seeded liens still in place. It still means that it's not a very good thing for your, so I would highly recommend paying your dues before the matter escalates to that point.
Best of luck.
Josh

Hello Eric. The HOA will have to first put a lien on your house and I don't know what the process is for that in TX, but you'll have to be notified. Once they have a lien on the house, they can theoretically foreclose, but the cost of the foreclosure is most likely so high that it would not make sense to go through it just to collect one year's worth of HOA fees. However, I have heard of people losing their house because the HOA foreclosed collecting a relatively small amount. Whether the HOA can benefit from a foreclosure will of course depend on how much equity you have in the home since they'd get house with the existing loan and they'd have to sell it to recover their cost, which only makes economic sense if the house is worth more than what's owed on it. You should check with a TX attorney concerning the details of foreclosure in your state. Good luck to you.