Then you have to pose the additional question which I thought of when this started occurring, IF the HOA takes title for a year, you would think they would be responsible for th HOAs during those periods.
I haven't seen a reason that would prevent them from evicting the occupant OR start collecting rent from a tenant in possession once they gain title, this may be the focus, to recoup some of the money they stand to lose, maybe they just let it go once the banks foreclose
Now the approach that is happening in Florida has been that the HOA will take title and then if the property is vacant they will start the process of renting it out with the disclosure that the property could eventually be foreclosed by the bank, if it is occupied they will start evictions and then rent the unit out to recoup as much as they can before the bank forecloses.
In some cases the bank will take months if not years to finish the foreclosure process. The bank in some cases will also settle with the HOA to make sure they can have clear title so its a win win for the HOA.
This has only just started happening in CA so its too early to see how it will actually play out.
The HOA can foreclose much easier than a bank which may be another reason you may start seeing HOAs foreclose first and negotiate with the HOAs for title, an HOA does not have to prove ownership and they are not involved in the robo signing issues we have had. So again, not being an attorney I could see how a bank who had chain of title issues may allow an HOA to foreclose and then negotiate with the HOA to give them title.
Its almost the same as if you would quit claim your condo to your uncle with a 1st lien on it. Your uncle would "own" the unit until the bank foreclosed on the lien and the action would be against you still instead of your uncle. They may list the uncle in an unlawful detainer later but the liability for the loan would still be against you.
Google HOA foreclosures in Florida and I am sure you will see the trend that is going on.
Best of luck
Realty World eCurb REALTORS