The declaration usually contains language that puts those liens subordinate to your purchase-money mortgage, but not all the time. This is because the banks don't like to be less than the "first" mortgage.
Mortgage means pledge. You pledge to pay back the money you borrowed to buy the house. Behind only government liens, the first mortgage lienholder can foreclose for non-payment or other breach and that action will wipe out all subordinate liens. Any superior liens will remain intact and 'run with the land' meaning they still are attached.
The importance of subordination is that if the HOA forecloses, but they are subordinate to your mortgage, then the mortgage company can foreclose on them if they fail to pay your mortgage (or someone fails to pay). It the same situation as taxes on the property. They must be paid or the government can foreclose, even if the lien for the taxes were filed after the mortgage lien.
Normally, the sale is not a trustee sale, but the effect is similar. You lose title to the property, but it is encumbered by the existing mortgages and taxes liens, if any. You should consult an attorney about your rights and obligations.
****Please email me directly so I can get the full story, it is only then that I can give you correct answers.******
Do you owe more than the home is worth? If so, you CAN still do a short sale & get the bank to pay your back HOA dues. You CAN do a short sale without ever missing a payment!! Not every Realtor can accomplish this though, I have done this before with multiple clients.
If your home is worth more than you owe & you can sell & make a profit, you will need to pay the HOA dues in order to close escrow.
Realtor Since 1996
Main Street Realtors
Distressed Property Expert
You will want to read the documents Homeowners Association Documents as they in most areas have the right to file foreclosure proceedings for not paying your HOA Dues.
The best thing to do is contact the association - determine if they have started any proceedings and whether they have or have not put together a strategy that benefits both you and the HOA. Perhaps a repayment plan every month and maybe setup automatic payment so they are assured of getting paid.
If the balance is small; it is not worth losing your house over, and
If the balance is sizeable, you probably should contact an Attroney.
However, if you contact the HOA and set up a repayment schedule, you can probably work your way out of it.
Good luck and may God bless
Just like the answers we gave in your previous question - the short answer is YES they can foreclose on your condo / house if you do not pay them whether you are paying your mortgage or not - one has nothing to do with the other.
However, as I said on your other question, if the HOA forecloses, they are subordinate to the Superior Liens (Mortgages).
You need to get some professional assistance very quickly. As Emily said, the HOA is likely filing liens against the property and if they begin to take legal action the legal fees will add up quickly.
Speak with an attorney or a REALTOR as soon as possible so you don't get into the hole too deep.
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END Transactions in our Brokerage. IN MY OPINION, there is NO benefit to the Seller or Buyer and only benefits the Agent. Also, NEVER use your RE Agent / Broker as your Lender or vice versa. Also, be careful when using Real Estate Broker-owned Escrow and Title Companies - they can be loads of trouble.
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Suggestion: Don't let the matter proceed that far. Call the HOA management company, if there is one, and offer to work with them until you can resolve whatever issues led you to be late on paying your dues. I think you will find many companies willing to work out a plan. But, this likely doesn't mean they will excuse any missed payments.
Hope that is helpful, Beesha.
PML of Longmont
Due to a high number of homeowners not paying HOA fees, they are getting more agressive in collecting. Typically after 60 days late they issue a letter, then after 90 days start the lien and foreclosure process. They would rather get paid than go through all of that. Call the attorney that issued the letter and ask them to work out payments immediately. I hope it works out well for you.
I would love an opportunity to sit down and talk with you about your plan. If I can not help you I can get you in touch with a Real Estate Attorney that can answer all of the legal questions that you may need answered.
If you are pursuing a short sale there are things that can be done to help work with the HOA to keep them from foreclosing while pursuing other options. There are no guarantees but if you would like to discuss your situation further, we are very experienced in the distress processes. This has been our area of specialty for the past 3 years and have successfully helped many families work through their situations. We would be happy to get you any information that could assist you.