Foreclosure in Valrico>Question Details

Dance2tb, Home Buyer in Valrico, FL

If a HOA forecloses on a property, and the HOA fixes up the house for resale, can the Lender come back and claim the property?

Asked by Dance2tb, Valrico, FL Tue Nov 20, 2012

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9
Yes. The mortgage or mortgages still have to be satisfied whether the HOA forecloses or not.
1 vote Thank Flag Link Tue Nov 20, 2012
Yes of course. You see an HOA foreclosure does not extinguish the 1st mortgage. Hopefully your HOA has gotten competent legal advice from the attorneys that made a lot of money foreclosing the lien. If the 1st mortgage was already in the final stages, hopefully your HOA attorneys did not recommend foreclosing since you would have very little to gain if the 1st mortgage foreclosure was imminent. You wouldn't be able to rent it out in good conscience if the foreclosure would occur in a few months.

Unfortunately I've seen many sleazy HOA attorneys who appear to be acting in their own best interests and not that of the Homeowners in an HOA that have hired them (via an incompentent/complacent board of directors and/or unethical hired property manager).

Check out this helpful website about HOAs and Condos:

http://www.ccfj.net

Governor Scott has a bill sitting on his desk right now that he needs to sign to protect homeowners from mismanagement by Board of Directors of HOAs. Contact the Guv to encourage him to sign... see the above link for more info.

All the best,
Alma Kee
http://www.SoldOnTampa.com
0 votes Thank Flag Link Mon May 6, 2013
In the case of a third party buying an HOA foreclosure, who is responsable for t a mortgage from a previous owner/borrower and is the third party liable for the mortgage? How does a subsequent bank foreclosure affect a third party holding title regarding credit ratings and scores after foreclosure?
0 votes Thank Flag Link Tue Mar 5, 2013
If you mean that you are buying a foreclosure, then the buyer of a previously foreclosed home is buying the home Free and Clear, there is no concern about the previous mortgage, or collections accounts. This is the role of Title Insurance, to guarantee the buyer is going to enjoy "quiet title'" I hope this helps, if not, contact me directly.
Garth
Flag Wed Mar 6, 2013
An HOA foreclosure is in response to a lien the HOA has placed on the property. In an effort to collect past due fees and costs the HOA will collect rent on the property to recoup its losses.

This does not satisfy a mortgage or any other lien against the property. For that reason, you should be mindful that, while the rent may be very attractive, you could well find yourself being not so kindly asked to vacate the property when the mortgage holder forecloses.

My professional recommendation would be to find a property that is unencumbered by liens of any kind so that you can make it your home for as long as you choose.
0 votes Thank Flag Link Tue Nov 20, 2012
It depends on what is going on behind the scenes at the court house. You will want to ask the HOA to show you proof of clear title if you are purchasing or renting from them. If you are renting and they do not have clear title then I would ask if they are negotiating with the primary mortgage companies and where they are in the process. You do have some protection with the new federal regulations for renters but it doesn't prevent you from getting the notices or having the bank coming by and inspecting the exterior if the property is still in foreclosure. Your current situation dictates whether you want to take the chance on a distressed home or find one with less issues.
0 votes Thank Flag Link Tue Nov 20, 2012
Yes the bank can still foreclose on the property as HOA'S do not payoff they bank liens on a property. All they do is fix it up and rent it out to get their fees back until the lender forecloses.



Thank you,
Tamika Moses
Keller Williams Realty
954-404-4646
tmrealtor@yahoo.com
0 votes Thank Flag Link Tue Nov 20, 2012
Hello,

Yes and the lender will foreclose on the property. It may take the lender a long time to complete the foreclosure process but they will foreclose on it. The only thing a HOA can do after foreclosing on a property is rent it out. The HOA will have the pay off the mortgage to sell the home. When the HOA forecloses it does not wipe out any mortgages. You might be able to short sell them home with cooperation from the previous owner but the HOA will not receive any money from the sale.

Please feel free to call or email me with any questions.

Andrew Schmitt
Yellowfin Realty
Sales Associate / Property Manager
Cell: 813-857-1543
andrew.yellowfinrealty@gmail.com
http://www.andysellstampabay.com
0 votes Thank Flag Link Tue Nov 20, 2012
Typically, the HOA forecloses, and then can either rent the home themselves until the bank forecloses, which takes precedent, OR, what occurs a lot now is the HOA forecloses, then sells the deed to a third party for a fee, say $10,000. The third party then rents the home, and hopes to make the money back in rent collected, before the bank gets around to the foreclosure. Any renter should be made completely aware of what they are getting into, and will get a low rent payment in return for the uncertainty of the time which they will be in the home.
0 votes Thank Flag Link Tue Nov 20, 2012
That's an excellent question, and I look forward to someone smarter than me giving a definitive answer. My educated guess would be that the HOA, when they foreclose, has to pay off or assume the bank loan, or the bank will then take it from them. They are taking the property to satisfy an outstanding lien for what the previous property owner owed them, and since the bank's loan is superior, they would have the authority to do the same. I know government liens have the most authority. Very interesting topic, thanks for asking...Jim
0 votes Thank Flag Link Tue Nov 20, 2012
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