I purchased an HOA lien at a foreclosure auction, I now have ownership. I want to do a shortsale with the old owner how would I go about doing so?

Asked by reconsultants1, Tampa, FL Sun Nov 18, 2012

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Lidialia, Both Buyer And Seller, New York, NY
Mon May 30, 2016
HOA liens are "super liens"! They go in front of first position mortgage, so they can foreclose the bank out, so the bank has a choice, pay off the lien with interest or loose their lien. Same with back property tax liens. Hope that helps.

In many instances Ron is correct.... HOA liens can be superior, but only when purchasing the lien rights to collect the outstanding debt. If you were to purchase that debt from the lienholder, you will be repaid for the face value of the debt plus an lawful interest and legal fees.

However, in Florida for instance, when a successful bidder buys a HOA lien at a foreclosure auction, they get title subject to the existing mortgages and other junior encumbrances. This is a good thing when the sum total of the outstanding liens are less than market value of the property. However, the OP clearly states the properties are underwater. Therefore, it would not make sense for the purchaser to payoff the existing mortgages.

Superior liens or not, when an HOA lien is paid of at a foreclosure auction, the successful bidder now owns the property subject to the inferior lien-holders. Since these are paid off, they cease to be a lien and therefore are no longer superior. Plus, you cannot put a lien on something you now own, so that money used to purchase the lien is now gone.

This is why both Eddie and me believe the investor buying these up must be renting out the property in order to make a profit. He may also have inside information which allows to take such a large gamble.

you and the homeowner and show them why its advantageous to short sale. Call me if I can help - http://ForeclosureProcess.net
3 votes
Simon Campbe…, Agent, Miami Beach, FL
Tue Nov 20, 2012
Here's the deal. When you purchase a HOA lien at foreclosure, you are in a 2nd or even 3rd lien position. There is most likely a bank loan ahead of you. This mean you received a dirty title, one that is subject to other liens.

So, you do not really own the property. If the owner has not paid the HOA dues, he is probably not paying the mortgage either and will be foreclosed upon. In this case, the future owner will be the lender.

Your goal is to either pursue ownership (short sale purchase) from the lender or evict whoever is living in the unit and rent it out to recoup your "purchase" price before the bank forecloses on the property, resells it and evicts the occupants.

You just bought an extremely high risk investment and if not handled properly, you will most likely lose whatever you paid.

Simon Campbell - http://www.bankforeclosuressale.com
2 votes
i bought 5 of them I have 3 left 2 years later....everything you said is spot on correct the original mortgage company has evicted my tenants and sold the properties since.
Flag Wed Jan 14, 2015
Dyana Metcalf, Agent, Tampa, FL
Sun Nov 18, 2012
Probably the best advice would be is to contact a Real Estate Attorney. Did you just purchase the HOA lien ? Is still an lender holding the mortgage ? I use a great attorney for all my shorts. He also owns a title company so he closes the transaction also.
My email is Dyanahomes@gmail.com if you send me a message I'll get you his information.
Dyana Metcalf
Florida Executive Realty
1 vote
Blgipson, Home Buyer, Tampa, FL
Sun Nov 8, 2015
What if the property does not have a mortgage of any kind? Would you gain title them?
0 votes
tameicapirtle, Home Buyer, 89128
Sat Jul 12, 2014
I live in NV. Here when a HOA lien/foreclosure is purchased by an investor. The investor has firs position.

0 votes
Michelle McD…, Agent, Henderson, NV
Tue Jul 9, 2013
If you need answers or help with your HOA lien, evictions, quiet title or short sale call attorney Robert Noggle @ 702-525-4113 or 450-6300
0 votes
Cesar Aguero, Home Buyer, Margate, FL
Tue Jun 4, 2013
i jumped on the same bandwagon and bought a hoa lien and all it has brought me are headaches. Now, i know the bank is coming after the house to foreclose it and my fear is that my name will be included in the complain filed to court by the bank because i am a title holder. i was never a borrower on this property however if the claim goes to court with my name on it it will show in public records WTF! Ive met with an attorney and he says this will not happen and i will just be evicted but ive heard otherwise from credible sources, who to believe???
0 votes
What happened? What did you do?
Flag Wed Aug 16, 2017
Lynn Brock, Agent, Sarasota, FL
Sun Nov 18, 2012
Reconsultants1, why did you purchase the HOA lien? Did you just get captured into the spirit of the moment? Purchasing a Tax Lien would have been a better choice.

Purchasing the HOA lien and wanting to do a short sale with the owner are unrelated "events". Purchasing the HOA lien does not provide you with leverage to force the owner into a short sale. The HOA lien, is not in first position as a lien holder. The first mortgage lender is the first lien holder, only a tax lien jumps in front of the first mortgage lender holder. This is why banks pay the property taxes to avoid this situation.

As mentioned you have a lien on the title but you fall in line with other creditors to be paid.

If you'd like to approach the owner regarding a short sale, you will have to utilize a realtor to handle the transaction.

Did you read a book or attend a seminar on wealth in real estate? Did you read the whole book or attend the entire seminar? You have spent money on a lien that created a mess rather than launching you toward real estate riches.

Check with a real estate attorney how you can be resolve the HOA lien acquisition and then find a realtor to assist you with approaching the property owner regarding a short sale.

Best regards,

Lynn Brock
Brock Realty Inc.

If you'd like to search the MLS like an agent in real time, you can visit our website and sign up for a free Listing Book account. You will be able to change the search criteria to suit yourself and received morning reports regarding new listings, price changes and recent pendings.
0 votes
John Bennett, Agent, Orlando, FL
Sun Nov 18, 2012
Last I checked, holding a lien does not make you owner. Bank MAY also have "lien" and it would be first in most cases. So I don't believe you have ownership until you have clear title. Call me stupid! And since you are talking about short sale, looks like you have a bank in first, and I really don't think you can short sale to owner without the MAN in first (bank). If bank does so, they must be very stupid.

What you need is a Florida Real Estate Attorney to sort this out.

Looks like you are holding a bag, question is . . . what is in it, and I think I know.
0 votes
Sandra Sanna, Agent, Tarpon Springs, FL
Sun Nov 18, 2012
You need to contact a lawyer. Realtors cannot give legal advise.
Sandra Sanna
Coldwell Banker
0 votes
Lisa Reeves, Agent, Tampa, FL
Sun Nov 18, 2012
What you have done is created a cloud on title. While you may have created ownership - you don't have clear title. Contact an attorney to fix, it should be similar to a tax deed so it will take awhile. Good-luck.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Sun Nov 18, 2012
If you've watched the news this week. you will have met a fellow who purchased as you did, tricked it out to the max and was foreclosed on. Left with nothing but memories.

What you are attempting to do is possible, but there is so much we do not know.
When I do a short sale I always settle with the second lien holder first, which may be the same process you are using. The big clue we all see is your "NOW WHAT DO I DO?" question.

No one can give you actionable data. It is important to know what, if any options you have created or eliminated or compromised.
We don't know what, if any, agreement you have entered into with the owner.
We don't know what, if any, experience, credentials or resources you have with which to work.

The best, next step, truly depends on your knowledge and capability. What you will attempt to do is contact the bank. Doing this, unprepared, will make the outcome predictable.

The safest next step is to call Dyana.
No, don't use that 'contact' button.
No, don't use Trulia email.
IF you are serious, and this IS a serious situation, you will acknowledge this by picking up the phone and calling.

Best of success to you.
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Nov 18, 2012
I don't agree with your method;
You purchased the TAIL and are working your way to the HEAD.
You could easily be left with nothing.
Talk to a Realtor.
0 votes
Liane Jamason, Agent, Saint Petersburg, FL
Sun Nov 18, 2012
Have you spoken to the old owner? You'll need a licensed Realtor who specializes in Short Sales as most banks won't allow you to do a short sale without a Realtor. Perhaps the Realtor could be the intermediary between you and the homeowner and show them why its advantageous to short sale. Call me if I can help.

Liane Jamason, REALTOR, CDPE
Smith & Associates Real Estate
813-486-4997 cell
0 votes
Octavia Chev…, Agent, Indian Rocks Beach, FL
Sun Nov 18, 2012
Call me and will discuss Octavia 7274038948
0 votes
Octavia Chev…, Agent, Indian Rocks Beach, FL
Sun Nov 18, 2012
Call me and will discuss Octavia 7274038948
0 votes
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