In the state of Texas, Homeowners Association can foreclose on the existing lien that runs for the life of the property. Many might think that itâ€™s not right to do this, but we are simply doing our job; enforce the rules and regulations that each homeowner agreed and signed to when they chose to buy a house in an Association. Also, in the state of Texas most, but not all the Association are junior liens. Some are superior and do not subordinate their place to any mortgage, some are superior and sign a subordination agreement with the mortgage, and some are junior. To know exactly in what place your property falls, you must review the governing documents (usually referred as â€œDeclarations of Covenants, Conditions and Restrictionsâ€) for the Association you belong to.
Confused & Tired base on what you said, the Association you are member of informed you that they foreclosed on their lien in November 2009. That means that they foreclosed on November 3, 2009. Foreclosures are only the first Tuesday of every month and you must be notified 21 days before the sale by certified and regular mail. Whichever date you received notice that the foreclosure sale in fact took place; you have 180 days from that date to redeem your property. Pursuant to a new law that came in effect on September 2009, your lender can also redeem the property but not until the expiration of 90 days. Your questions are if the HOA supersedes the mortgage and who do you pay your mortgage. As previously mentioned, if the HOA supersedes the mortgage or not is a matter of investigating. Who should you pay your mortgage? That would be your decision after you read the below.
How an HOA foreclosure affects you? You will loose your property regardless of what position the HOA lien holds. Letâ€™s assume that you are current with your mortgage and that there is not threat that your lender will foreclose, but you are not paying your HOA dues. Since you are still in default of the HOA lien, the HOA will foreclose on your property; give you 180 days to redeem it. Letâ€™s assume that your HOA is not superior to your mortgage, which puts them in second positions. Even though, they are in second positions, they can still foreclose on your property and take possession of the property through eviction process. After a judge signs an eviction order, you must vacate the premise. Not vacating the premises after the order is given can bring you bigger legal issues.
Once you do not have a property, the probability of you continuing to youâ€™re your mortgage note will likely not happen. This is when the lender will come and foreclose on its liens whipping the HOA lien, but that also means, that the Association will begin to receive payments from the lender since he is now the owner of the property by foreclosure and the property is free and clear of liens.
I hope that the above information helps you understand how the HOA foreclosures work. I recommend that if you still confuse seek the opinion of legal counsel. Although let me tell you that even after your property has been foreclose, you can still contact the firm who conducted that foreclosure and work something with them. Do not think that just because they foreclose itâ€™s the end of the world and you have lost. Remember you still have 180 days of redemption. One thing is for sure, get ready for high legal fees which per the governing documents, an Association is entitled to reimbursement from the debtor.
All the information provided above is base of my personal years of experience as a HOA paralegal. In no way am I representing my employer, or clientâ€™s views on this matter.