In a short sale, making sure that clear title is provided, is the responsibility of you and your Realtor.
If you cannot pay the back due dues yourself, you have some options for help.The first place to go looking for help is the lender/servicer that owns your first loan. They almost always pay the HOA some, if not all (depending on what you owe,) of the past due fees.
If the amount your lender/servicer is willing to pay is not enough to get the HOA to settle and release their lien, then you and your Realtor need to get creative.
You can ask the buyer to help out. Sometimes buyers are willing to pay the back dues or, at least, pay enough to get the HOA to release the lien.
Any way you look at it, HOAs generally don't just go away. They will want something from someone. Find out what it will take to get them to settle and release their lien, then work with your Realtor, lender/servicer, the buyer's agent, and the buyer, to make it happen.
There are two important issues:
It is in your best interest to get them to settle. If all they are willing to do is release the lien, then they maybe leaving the option of pursuing you for the remainder owed, open. If they settle, you will not be pursued for the remainder.
If the lender/servicer is not able to pay everything the HOA wants, they must agree to whatever terms you and your Realtor have worked out to get the HOA to settle. In example, if the buyer is going to help, the first must say it is ok for them to do so.
Rodney Mason, NMLS #151088
Sr Loan Officer
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia
Prospect Mortgage offers a full selection of mortgage programs including:
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My suggestion would be talking with the HOA and notify them that you'll be going through foreclosure if they don't release the HOA dues at the time of sale. They may relieve you of the debt.
The bank may also pay the fees as part of the short sale or negotiate them down. They stand to lose much more if they let you go through foreclosure all because of just a thousand dollars in past due fees. The bank typically pays the Realtors involved in the sale and taxes and other "junior" lienholders.
Best of luck to you!