I bought an HOA foreclosure in Florida, would I be responsible for the existing mortgages from the bank.

Asked by Mirlyn99, Miramar, FL Mon Oct 25, 2010

The HOA foreclosed & I purchased the property. I did research & found a newly lis pendens on the property. Do I need to call the bank & resume the mortgages. The 1st is $400,000 & the 2nd is $170,000. This is money that I dont have. I thought it was a steal to own the home for $12,000 from HOA but more debt are coming up.

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14
Alma Kee, Agent, Tampa, FL
Tue Mar 6, 2012
You need to rent it out to recoup your $12k until the lenders foreclose. Also if you do not make the payments to the HOA they can collect that money from your tenant. If there is someone still living there you may also have to pay money for an eviction or have them pay you "rent" immediately.

This is the reason why investors are buying up HOA foreclosures.

Also you might try to get "CASH" from the 1st mortgage to do a Deed In Lieu... hopefully they'll give you the $12k you just paid.

Good luck.

All the best,
Alma
1 vote
This was the most irresponsible answer I ever heard. Do you have any idea what this does to an unsuspecting tenant. I am one of those tenants. I was completely blinsided by this and now have no where to go. To tell a person to take someone's money for a home you don't own is fraud and criminal at best.
Flag Tue Sep 20, 2016
I think the answer you gave is so irresponsible. I am a renter in the situation an right now I have no idea where I am going to live. I had no idea this was possible and for you to suggest that it is okay to take money from someone for a home you do not own without disclosing it is insanity. You should lose your license.
Flag Tue Sep 20, 2016
If you choose this option, you are committing FRAUD and can be prosecuted for it. The Mortgage Lender can, and will come after you, and likely report you to the proper authorities for criminal prosecution as well.
Flag Mon Apr 16, 2012
Savo, Home Owner, Tampa, FL
Sun Jan 29, 2012
Probably should have figured that out before making the purchase buddy... Just saying...
1 vote
Tom Priester, Agent, Tequesta, FL
Sat Dec 11, 2010
Mirlyn99,

Please make sure that you research completely the auction process as you might just end up on the losing end if you do not do your homework. It sounds like you may already be in trouble and probably had parted with $12,000 of your hard earned money. Any party with lien rights can file a foreclosure motion and if you outbid them there may be senior liens that you will be responsible for. It is imperative that you have a title company do a complete lien search so you know what outstanding obligations there are on that property and where the lien you are bidding on stands in that line-up.

I hope this information is helpful but again please do your research as you do not want to be on the losing end in the auction process.


Always at Your Service,


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com
Web Reference:  http://www.tompriester.com
1 vote
Jose Castillo…, Agent, Hollywood, FL
Mon Oct 25, 2010
Hello,
there is a crucial point to this question missing but: in general this is roughly how its treated.
OF Course your best bet is to Consult a real estate attorney;

For the condo association foreclosure to be valid, the bank who holds the mortgage must be notified of the foreclosure action, and the mortgage company has the opportunity to do a couple of things:

They can pay the delinquent condo fees themselves, to protect their own interests, and force the borrower to pay them back. If the borrower is unable to repay the condo fees, it could put the mortgage payments in default, and be grounds for the lender to begin foreclosure proceedings.

If the borrower is behind in their mortgage payments, the bank can join in the condo association's foreclosure action themselves. This is actually a great assistance to the bank, as it saves them the time and trouble of initiating the lawsuit - they just get to piggy-back on the condo association's foreclosure, which makes the foreclosure sale happen that much sooner. And since the bank's lien has priority over the condo association, the bank would be the one to get paid off first if the property got sold to a third party at the foreclosure sale, or if nobody bid on the property, they would be the ones who would become owners of the condo.

If, for whatever reason, despite getting proper notice, the bank does nothing and the condo association forecloses on the property. The first mortgage holder has a lien that always survives the condo association's foreclosure. In fact, second mortgages are usually superior to the condo association's lien for unpaid maintenance fees. Usually the condo association gets stuck with owning a property with at least one outstanding mortgage with an outstanding mortgage balance greater than the actual value of the property because of the decline in real estate value. Most condo associations allow the first mortgage holder to foreclose on the property after their foreclosure is done.

The main point is that in Florida a condo association foreclosure has no effect on the first mortgage.

Best Of Luck
Jose Castillo Realtor, CIPS, ePro
Web Reference:  http://www.josesellsfl.com
1 vote
noldaker, Renter, Clearwater, FL
Sun Jul 30, 2017
Just read about several people who rented these HOA foreclosed homes are being evicted...What is bothersome is in none of the comments below I've read does anyone suggest going after their state's legislators to fix the laws they are writing to protect everyone but the renter from these scams. At the very least there should be a disclaimer document warning for the renter to review and sign beforehand that they could and will be evicted once the bank forecloses.
0 votes
Mchiriboga, Home Buyer, De Leon Springs, FL
Thu Apr 6, 2017
My research has shown that in all but a few cases a first mortgage survives an HOA foreclosure and the auction "winner" will be responsible for such existing liens. I HAVE AN IMPORTANT QUESTION ON THIS MATTER. What rights do I have in insisting on seeing the records of such an existing mortgage. Court records on a property I purchased show the mortgage ballooned in 2013 meaning it had to be paid off or modified. There is no public legal record of either. Now the mortgage holder comes after the foreclosure demanding $84,000. Do I not have a right to see the records of the mortgage, what was paid and what wasn't leaving the determination of $84,000 still owed? Why should I give the mortgager the money just because they say I owe it without them showing me legal documentation to prove it is a legal lien on the property. Anyone?
0 votes
Mary, Home Owner, Miami Beach, FL
Thu Mar 22, 2012
WHAT DID YOU DO? I MADE SAME MISTAKE
0 votes
Danny, , Miami, FL
Mon Mar 5, 2012
Call me tomorrow 305-790-7979, I'll tell you exactly what to do brother.
0 votes
What did you do?
Flag Wed Aug 16, 2017
What did you end up doing, and did it work?
Flag Thu Jul 6, 2017
Help! I made the same mistake. Do you think the bank that holds the mortgage will pay me what
I won it for if I sign over the deed?
Flag Thu Mar 24, 2016
Wow...2 years later and I just made the same mistake...I am on forums tryung to figure out what to do. My mistake is a LOT more expensive. If you are willing to share what you did please email or call me: tameika_kdbl@hotmail.com
Flag Tue Jun 10, 2014
dang, i just did the same thing.. so what is the solution?
Flag Thu Mar 21, 2013
what can I do? I made the same mistake
Flag Thu Mar 22, 2012
Keith Manson-…, , Milwaukee, WI
Tue Dec 14, 2010
The foreclosure market is not a place to guess! Each state is different but there are lots of things that can happen and if you risk funds you have to be willing to loose funds invested. People who try to get steals and not pay for advice get into trouble. You might even have more issues if there is recorded information about your ownership in the property. The foreclosure could hit your credit report. The banks should not report it because you are not on the mortgage but credit reporting agencies also report items from the public record.

This should be a leason learned by you and others that read your blog!

Keith Manson
First Weber Group
Certifed Distressed Property Expert
Metro Milwaukee
http://www.milwaukeebailout.com
0 votes
Luis E. Loza…, Agent, Weston, FL
Fri Dec 10, 2010
Why in the world would anyone want to live where there is an HOA?

I understand that these can vary from place to place but every one of them that I have seen stated something to the effect of rules are subject to change.

So you like their rules when you buy your property and 3 weeks later they can change to everything that you do not like?"

The reason people want HOAs is it protects your investment. If you've ever lived next to a "neighbor from hell" you'd understand. Someone who keeps junk piled in their yard, junker cars parked all over, etc. It really reduces values.
0 votes
Alma Kee, Agent, Tampa, FL
Tue Oct 26, 2010
Hi Mirlyn,

Likely you were the only bidder at the courthouse auction--unless the first mortgage is less than the current market value of the property.

You may have just lost $12k. To try to recoup some of your loss you should immediately rent out the unit. It may be a few months or a year before the 1st mortgage ultimately forecloses. With florida law your tenant should be able to stay in the house until their lease expires. To attract the highest possible paying tenant you may want to offer to renew the lease every month so that they will get almost a year to stay after the bank ultimately forecloses. They have to be paying close to "market rents" to be able to stay in the house until their lease expires.

Good luck!

Alma

Of course talk with an attorney.
0 votes
It is NOT fraud to rent a property that you bought at an HOA foreclsoure sale. You ARE the owner of record once you purchase it. The mortgage(s) are just still attached to the property.
Flag Thu Feb 9, 2017
Again, FRAUD. If you do not pay the Mortgage with the Rents you collect. If you rent the home to a NEW renter, who was not in the home before the foreclosure action commenced, then they are not a "bona fide renter" and the lease does not have to be honored. I am an attorney, unlike Ms. Kee.
Flag Mon Apr 16, 2012
Tom Priester, Agent, Tequesta, FL
Tue Oct 26, 2010
Mirlyn99,

How did you purchase the property? Were you the winning bidder at a foreclosure auction? If you did participate in the auction process I hope you understand that any senior liens to the one you bid on are superior and need to be taken care of. The first step when bidding at these auctions is to fully understand the rules and never bid without paying for a title company to do a complete lien search.


As the others have stated below I would strongly suggest you contact a good real estate attorney as soon as you can and wish you the best of luck.


Always at Your Service,


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com
Web Reference:  http://www.tompriester.com
0 votes
Edyta Gryc, Agent, Naperville, IL
Mon Oct 25, 2010
Mirlyn,

Only a real estate lawyer will be able to advice you on your situation. Let him/her review all the documents and see what your options are.
Good luck.
0 votes
Jose Castillo…, Agent, Hollywood, FL
Mon Oct 25, 2010
Mirlyn99
i thought this link would help you abit more with your questions
i hope it helps
http://www.floridacondohoalawblog.com/2010/10/articles/asses…

Jose Castillo, Realtor, CIPS, ePro
Coral Shores Realty
0 votes
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