Foreclosure in Sacramento>Question Details

Vwsales, Home Owner in Roseville, CA

HOA forclosed/purchased at auction, they now responsible for the 1st lein? Must I still pay the 1st or does the HOA now have to pay it?

Asked by Vwsales, Roseville, CA Sun Apr 29, 2012

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Justanother Investor’s answer
The HOA is "subject to" the first not responsible for the first trust deed. The HOA is in the unique position of owning a home with a mortgage that it is not "responsible" to pay. They can simply rent the property until the first forecloses or they can sell the ownership rights on a site like trionx.com to an investor that can deal or negotiate with the first mortgage. HOA's are non profit entities that are created to pay the Common expenses of the community. Most HOA's are only interested in getting the account current and will sell you the home back for the past due amount that you owe. You are in the position now of being responsible for a loan on a home you no longer own. A Bad deal no doubt but where you are all the same. If you want to maintain your good credit rating you will need to pay the payments because it is not likely that the HOA will make the mortgage payments. It would be taking on a debt as a non profit charged with paying the common expenses. Call Them & Buy It Back!
Web Reference: http://trionx.com
0 votes Thank Flag Link Wed May 9, 2012
Note that my comments below are specific to Nevada. Other states probably differ. I have seen cases where the first security interest has payed the super priority portion and the foreclosure still went through and cases where the first security did not respond to the foreclosure notices. They second case is the one where I buy!
Flag Fri May 2, 2014
You need to read the State of Nevada real Estate Division Advisory Opinion 13-01 which covers this exact issue. A portion of the HOA lien is considered a "Super Priority Lien" and is distinguished from the other portion of the lien that is subordinate to a first security interest.

According to the above stated advisory "The ramifications of the super priority lien are significant in light of the fact that superior liens, when foreclosed, remove all junior liens." So, when an HOA forecloses its Super Priority Lien the first security holder can either pay the super priority lien amount or lose its security.
Flag Fri May 2, 2014
You should read the State of Nevada Real Estate Division Advisory 13-01
Flag Fri May 2, 2014
I recommend speaking to an attorney, which we can recommend some affordable ones if you contact me.

If the HOA forecloses they may be able to evict you even if the 1st does not, so it's important to speak to someone who can provide you with legal advise and the next steps to take.
0 votes Thank Flag Link Mon Apr 30, 2012
Sounds like, the HOA has foreclosed on your property.
If there is equity in the home, you should definitely consult an attorney right a way, cause you might get evicted and lose your home. If there is no equity in the home, I suppose it does not matter that much, but either way, an attorney can advise you as to what should be the best course of action for you.
Try http://www.lawguru.com, you can pose a question there to a real estate attorney for free.
Hope that helps
0 votes Thank Flag Link Sun Apr 29, 2012
Thanks for the legal advice web site. I will keep that in my favorite. Do you know if they are all attorneys that responsd? I only ask because the response that I got stated that they didn't know about the 90 day period (redemption time). But, I will still use it again...Thanks
Flag Mon Apr 30, 2012
The first lien allowed the HOA to foreclose, without stepping in and getting involved?!
0 votes Thank Flag Link Sun Apr 29, 2012
Yes...All is current and good on the 1st.
Flag Sun Apr 29, 2012
Lawyer up....................
0 votes Thank Flag Link Sun Apr 29, 2012
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
The party that foreclosed has the right to evict you. The other lienholders still have a right to get paid but the question is what is in your best interests with the current circumstances.

Now, more than ever, you need to speak to an attorney about your rights and negotiating some agreement.
0 votes Thank Flag Link Sun Apr 29, 2012
If there is a foreclosure on the first loan, it will be reported
under the name of the borrower. Talk with an attorney, but
a junior lien foreclosure should not release you of liability,
just ownership. You may have yourself in a no-win
situation. Definately should seek legal counsel to see where
you stand.
0 votes Thank Flag Link Sun Apr 29, 2012
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