You've already received lots of answers and advice from throughout the country. I see you are located in Nevada. I am not licensed in your state but if you are in financial stress and your property has become a hardship, I would stringly suggest you begin the short sale process. If you need a local REALTOR, I can refer you to someone.
As to your actual question, NO ONE shoudl be telling you to stop paying anything EXCEPT an attorney who is familiar with your specific situation. ANY Real Estate Licensee who tells you to become delinquent on your obligations should not be in our business.
If you stop paying the HOA fee, it is likely the association can 1) file a lien and 2) foreclose subject to any other mortgages on the property - this is becoming more commonplace these days. The HOA can foreclose faster than the bank and coud eliminate any other options you may still have.
Also, in a short sale, most lenders will not allow the HOA fees to be paid from the sale of the property so it is more important these fees be kept current. As for taxes, your lender will have to cure the tax issue prior to any sale BUT, that may be put onto the Buyer which will make your property less attractive to buyers.
As others have said, consult with an attorney and list your property for sale as quickly as possible. If you have only one mortgage, contact your lender and ask about a "Deed in Lieu" - basically you give the house back to the bank and they MAY help you with relocation costs.
Best of Luck to you,
Broker / Owner
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We never double-end a transaction in our brokerage.
If this property is your principal residence do see someone about a short sale. The rules have changed and the banks are now willing to cooperate with a seller rather than do a foreclosure (this is under the HAFA program - foreclosure avoidance, and is new within the last few months and just now really being implemented). Under this program not only will the banks not pursue a deficiency judgment against the seller but you will receive $3000 relocation costs. Let me know if you are in the McKinney area, I would be happy to discuss this further with you. In any case I wsih you well.
taxes - HOA - mortgage, but often HOA documents subordinate their liens below the mortgage
What this means to you is that if the mortgage lender wants to maintain their position (claim to the property), they will protect their lower-priority claim by paying the taxes and adding that amount to what you owe. Also, if the HOA is higher priority, they'll pay those liens off, too, to avoid having the HOA foreclose. The reason foreclosure by a taxing entity or possibly a HOA is important is that when a foreclosure occurs, lower priority liens are automatically wiped out. So, if a tax lien were foreclosed, the mortgage company would lose its claim on the property.
You decide what you want to do, but you should be seeking alternatives and speaking to your lender about alternatives.
I like Thom's answer. See an attorney quickly. This week. Also see a short sell specialist in Las Vegas.
We can recommend some of the best in the city. We need to get working on your home quickly. It is much better to control the sale, than go to foreclosure. If you are out of money, do your best to up your income. You might take in friends or family who can help pay rent and split expenses. Perhaps a college student for a semster. Do whatever you can to keep the foreclosure off your credit.
It would be illegal and unethical for any realtor to ever tell you not to pay your mortgage, HOA or taxes. It really becomes a matter of what you can afford.
Understand, if your taxes are escrowed by the lender, they will continue to accumulate as money owed.
If your taxes are paid directly by you as I assume the HOA is as well, you will most likely begin to incur late fees and or penalties. At some point, both the County and HOA can start foreclosure to recoup the payments.
If you are unable to afford the payments on your property, you should contact your lender(s) immediately. You may be able to work out a loan modification plan with them. Understand, it will not be an easy or guaranteed process.
If you can not afford to continue paying for you property, you may consider a short sale rather than letting the home go into foreclosure. A short sale allows you to negotiate a reduced payoff to the lenders, allowing you to sell your property at or below current market value. In addition, the lenders will pay for all your closing costs.
Make sure you deal with a realtor that is experienced in short sales. We network with several in NV, and would be happy to help you find one that can assist you. Feel free to call me at 832-330-4588.
Recommend short sale happy discuss these options, keep in mind you also have insurance are you paying that tooo?
Short sale has less of impact than a foreclosure. Where you are currently living be happy there for 2 - 3 years for fact limited options to lease OR purchase a home with foreclosure. Your credit scores will tank
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Your HOA and the appraisal district are separate inteties from your mortgage company and they can both file liens on your property and affect your credit rating. However, it sounds like you are approaching the point of foreclosure with the lender. If you are not already represented by a broker, I would like to talk to you about selling your property. If you don't have equity in your property, then I would like to refer you to a Short Sale specialist who can negotiate with your lender and sell your property without the level of damage to your credit that foreclosure will cause.
REALTOR, GRI, ABR, E-Pro