HOA’s have a lot of power in Florida, and you must realize your HOA will foreclose & eventually (somehow) get its money….
Lately, I’m facing more and more HOA liens….
And that means I’m facing more and more challenges in trying to sell houses & help property owners avoid foreclosure.
Upfront, please allow me to say that if you have no choice but to default on your mortgage, PLEASE keep your HOA dues paid in full.
Do NOT stop paying your HOA fees unless absolutely necessary and unless you absolutely understand the consequences.
According to one seller’s attorney, a homeowner association (HOA) has a 12mo priority lien over all mortgages. That means they can put a lien on your property and foreclose.
Please click READ MORE below now for the harsh reality of HOA’s beating banks to the foreclosure courtroom, desperate to get its unpaid due.
Okay, so an HOA can move on a 12-month priority lien BUT they cannot foreclose out the 1st mortgage unless they specifically name the mortgage lender in the lawsuit.
HOAs CAN BE VERY DIFFICULT TO WORK WITH, CAUSING HOUSES TO GO TO FORECLOSURE:
- HOAs (in my experience) will foreclose and consider 2 options:
- HOA will lease the property until the bank forecloses, allowing HOA to collect its unpaid dues in tenant rent.
- HOA will sell the property to an investor who has or has not completed its proper due diligence re: lien search to discover the mortgage lender’s superior lien. What this means is that the bank still can (and will) foreclose eventually.
- HOAs don’t have to sort through reams of paper desperately searching for the original mortgage NOTE.
- HOAs don’t have to worry about robo-signing scandal.
- HOAs don’t have to sell for full market – they only need to recover their delinquent HOA fees (and accrued fees & expenses)
- HOA can wait for the first mortgage to complete their own foreclosure and wait for the lender to pay them back the 12mos of assessments they’re due. It’s quite a game out there and a total mess. The HOA’s and their attorneys (from my experiences) try to take advantage of the situation to squeeze every dime they can out of the homeowner and the lenders.
To be clear, I believe HOAs deserve every penny they’re owed.
Law firms, on the other hand, do NOT deserve to treat an HOA lien as its own private ATM..
On one short sale file, an HOA lien has exploded from $9,748.00 to $19,788.00! Nearly 50% of assessment is attorney fees…outrageous!
Sadly, the title company processing the short sale failed to inform seller and me of the EXTENT of the HOA lien until bank rejected the buyer’s fair market offer.
Seller, who had informed me at listing time of HOA lien, was shocked to discover lien had exploded to $19,788!
This is the kind of obstacle that kills many short sale attempts.
We quickly need to get another offer before the law firm for the HOA will allow us to appeal bank’s decision.
We’re on a tight schedule.
HOA will foreclose on its lien.
Forget trying to discredit HOA in media – if a property owner hasn’t paid his dues or cut his grass in 3 years, who’s going to sympathize with property owner…regardless of offer on property?
Now you know the rest of the story. If you want to short sell and you live in a homeowner’s association, PLEASE pay your dues if you can.
If you or someone you needs to buy or sell (or short sell a property) in or around the Sarasota area, please call me @ (941) 928-8145. I know how to help you get the search out the opportunity on a property, and I know how to SELL properties by reaching buyers outside the US who are looking for a house just like yours.
Sarasota foreclosures face an aggressive party: your homeowner association. You can put them off for a while. Eventually, they will bite your ass & throw you into foreclosure if they don’t get their money. While you’re down, your HOA’s hired gun (i.e. LAW FIRM) will pile on the fees.