Unfortunately, this will stay on your credit report as a paid item and will hurt.
Lynnda, I am assuming that the reason that the HOA placed the lien is not because of the foreclosure, but because they also were not paying their HOA dues. This not only affects you, and your parents, but the entire complex because banks will not lend in condos if there are more than a certain percent of owners behind on their HOA dues. I believe that is 10%, but not sure. It is a more recent guideline, but definitely affect the entire association. What you can do, if you parents do not have any money at all, is find out what that outstanding amount is and pay it if you can. You should also make sure that either you or your parents keep the dues current until the bank takes posession of the property.
As far as your credit goes, most likely the credit bureaus will pick this up in a short period of time, and it will affect your score.
This is and will continue to hurt your credit you most find a way to settle with the HOA because they can file for foreclosure as well. I would assume that title transfer into your name happened after the mortgage so the HOA may be deterred from filing for a foreclosure because they would have to pay the mortgage off in order to take title. Get on the phone and start negotiating you do not want a foreclosure on your record it is life changing and your parents will have nowhere to live.
Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like your job, yes employers are checking credit records these days.
Your credit score will be reduced by 200-400 points, short sale a little less 100-200 points.
All forms of foreclosure stay on your credit report for 10 years.
After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure
* Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
* Buying After a Foreclosure with Extenuating Circumstances
The waiting period is 3 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure with Extenuating Circumstances
The waiting period is 2 years up to 7 years.
* Buying After a Short Sale
The waiting period was just upped from 2 to 3 years. However, if a seller does not have a 60-day late pay, that seller may immediately buy another home. It's a reason to stay current on your payments while the home is on the market as a short sale.
In addition to the waiting period, most loans require a minimum down payment of 10% and a minimum FICO score of 680. The home purchase must also be the principal place of residence, not a rental nor a vacation home.
Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.
The only way to get removed is to complete a quit claim deed to transfer interest. This will help going forward, however, you may have some legal work to remove for actions already started while your name was on title.
First Weber Group
Certified Distressed Property Expert
If you quitclaim yourself off of the title, this lien will not affect your credit.
**If your parent's owe more on the home than it is worth your parents CAN Short Sell the house, do NOT let it go into foreclosure and taken back by the bank. Ultimately I can get the bank to pay the lien, if it is for missed dues payments & other late fees.
If they've also stopped making their property tax payments, I can get the bank to pay their back taxes.
Even if they're 14 payments behind, I can get the bank to agree to a short sale. Your parents could buy again in less than 2yrs so long as they stay current on all other bills.
If it goes into total foreclosure there is not hope for negotiating something like a deficiency judgment that the bank may impose to collect on your parents in the future. If the home goes back to the bank your parents wouldn't be able to purchase again for a min. of 5yrs.
Let me know if you have any questions or concerns at all, I'd be happy to give you guys some more pointers, tips & tricks!
*If you post again in this thread, I won't see it, so email or call me directly*
PMZ Real Estate