Can a HOA foreclose on a property that has a mortgage with a balance worth more than the property?

Asked by cdelgado0412, 33594 Wed Oct 10, 2012

The previous HOA company went bankrupt and is now threatening foreclosure on a property for unpaid fees. The new HOA is now threatening the same. There are no leins and the mortgage balance is more than what the property is worth. I can barely afford the mortgage which is also past due and they are threatenging foreclosure. I just applied for a mortgage modification but if the HOA is going to end up with the property, should I even do all of this and keep paying what I can? Not sure how to solve my financial problem! Thanks

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11
Tarahayley, Both Buyer And Seller, Providence, UT
Tue Aug 18, 2015
If you don't pay HOA assessments, the homeowner's association can initiate foreclosure proceedings. An HOA foreclosure is similar to a foreclosure of your home by a mortgage lender. However, there are a few differences. http://ForeclosureIQ.com
2 votes
Lisa Reeves, Agent, Tampa, FL
Thu Oct 11, 2012
Technically there are three entities that can foreclose: County for taxes, Homeowners Association, and Lender. However the mortgage should be the primary on any foreclosure proceedings. What happens is when a homeowners association starts foreclosure action, the lender will have to join the proceedings or start their own proceedings and it all gets worked out in court. But many cases the mortgage company may not know that foreclosure has been started and when the HOA becomes the owner they create a cloud on the title. The other outstanding liens will then have to vacate their lien or fight in court. It gets really messy.
0 votes
Kerry Heron, Agent, Brandon, FL
Thu Oct 11, 2012
According to Chapter 720 of the Florida Statutes, a property owner that is at least 90 days late in paying HOA assessments may have his/her rights to common areas and association amenities suspended until the assessment is paid. In addition, Florida law allows the HOA to charge a fine for each day the account is in default. Once the fines reach $1,000 or more, the HOA can place a lien on your property. Most HOA boards do not do this type of work themselves, so they hire an attorney to handle liens, collections, and foreclosures. These services can get very expensive and the statute allows the HOA to stick you with the bill. Nonpayment of these amounts can lead to the HOA filing a foreclosure against you and the property.
0 votes
Debra B Albe…, Agent, Port St Lucie, FL
Thu Oct 11, 2012
I have seen this happen. In Florida, yes, the HOA can foreclose on a property. I have seen people avoid the HOA action by renting the property and having the HOA receive the rent monies. You could also try just talking with them and trying to work something out.
0 votes
Alma Kee, Agent, Tampa, FL
Wed Oct 10, 2012
Yes, absolutely, it happens all the time in Florida. If you are even one day behind on your HOA assessements the HOA can foreclose and take ownership and then evict you and rent it out until the first mortgage eventually forecloses. You will end up with a "foreclosure" on your record and may not be able to do a short sale. You certainly will pay rent to the association or have to pay rent to live elsewhere.

If your final judgement amount at the courthouse auction is not too high then an investor will pay the HOA the final judgement amount (will be $2k extra for legal fees) and take ownership and then require you to pay rent to them or get evicted.

Bottom line is the first mortgage will still stick to the property but HOAs are foreclosing their lien anyway to have an investor pay them in full or to take ownership and rent it out for income until it eventually gets foreclosed on by the first mortgage.

So don't delay and give me a call or send me an email.
All the best,
Alma
Alma Rose Kee, PA
http://www.SoldOnTampa.com
813.244.9898
Future Home Realty
0 votes
Gerardo Luna, Agent, valrico, FL
Wed Oct 10, 2012
Hello there! ,The best possible advice any Real Estate agent can give you is to consult your situation with a Real Estate attorney. Every situation is different and this is the best way to go. Don't feel that is going to be expensive since an attorney is involved. Their expertise can save you a lot of money and I'm sure their initial consultation is affordable.
Best Regards,
0 votes
Lori Newberg, Agent, VALRICO, FL
Wed Oct 10, 2012
I have experienced a few homes in Valrico where the HOA did indeed put liens on the properties that have dues that have not been paid. In theses case, the HOA now has the legal right to lease out the units in hopes of collecting revenue until the foreclosures are final. It's also possible for them to collect the rent from the current tenant (if the home is already rented). I would recommend seeking the advice of an attorney to discuss what your best interest would be at this point in time.
0 votes
John Bennett, Agent, Orlando, FL
Wed Oct 10, 2012
HOA company? Do you mean a Management company?

What you need to do, as others well suggest, is to talk to an Real Estate Attorney, then a CPA. What I suggest you do is to ask Trulia Agents to recomend a attorney in the area that does HOA Law. They should be able to suggest good Lawyers in the area.
0 votes
Liane Jamason, Agent, Saint Petersburg, FL
Wed Oct 10, 2012
P.S. Short sale also may be an option for you. Check out the website I've posted below to see if your home could be an asset again in the foreseeable future. This may help make a decision easier for you, and it gives you other options as well.

Liane Jamason, REALTOR, Certified Distressed Property Expert
Smith & Associates Real Estate
813-486-4997
http://www.LianeJamason.com
http://www.ShortSaleorStayTampaBay.com
0 votes
Liane Jamason, Agent, Saint Petersburg, FL
Wed Oct 10, 2012
You need a real estate attorney STAT. :)
0 votes
Danielle Sha…, Agent, Cape Coral, FL
Wed Oct 10, 2012
Your best option is to speak with an attorney that understands real estate law. A short sale may be a good solution for you but first meet with an attorney and tax professional to discuss any ramifications.
0 votes
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