RICH

Is that realistic? Does the bank get a second crack? They instigated the action I suppose. and lost...

This is the scenario I was thinking about to nab the house next door from the bank!

Pulaski

For that to happen there have to be multiple points of failure.

If it was a vacation rental, I would say that the managing agent dropped the ball (did not pay, or did not notify the owner), or notified the owner, who failed to send payment.

I still think the bank will try to come after the HOA, though whether they would win in court may be a moot point as I doubt the HOA will have a deep enough pocket to fund a legal action they might lose when they're just fighting to keep a windfall gain. In other words the bank's lawyer may just intimidate the HOA into settling.

scrubbedexpat099

First thing would be if the HOA charge is valid, maybe not.

RICH

If it makes a difference, it was not just the hoa fees delinquent, the mortgage was too, if it was not clear.

scrubbedexpat099

HOA are not going to do that for $100.

RICH

I wouldn't do that for $100 either. (What are we talking about?)

scrubbedexpat099

I thought the lien was $100 Duh

RICH

OK. The HOA lien for fees is an unspecified amount, presumably inferior to the $250k mortgage.

$100 I mentioned was the sale price at auction for the property last month.

edit - it was specified - about $6k

sir_eccles

In trying to find a link about hoa insiders being in on selling off houses cheap with hoa liens (which I couldn't find) I found a link about the superiority of liens. Hoa liens being quite superior apparently.

What happens to superior liens during foreclosure? • Mortgage Insider

Tarkak9

It depends on (the) state laws and foreclosure laws. Many states, HOAs retain extremely senior rights to a property in its community, even over that of a bank (and basically are second to Tax on the totem pole). Therefore they do infact have the right to foreclose on the property for unpaid dues; because of that, all they have to do, like normal procedure, is notify subordinate interest holders of their foreclosure, but not be obligated to accept pay off of their lien from the junior position holders, who do run the risk of being s.o.l. (Bank). Often though, they will go ahead and be paid by the bank as its easier to get their owed funds that way rather than go through the foreclose procedures. There may also be state laws as to how much an HOA is allowed to capitalize from such sale after foreclosure. The bank probably will sue somebody, probably not the HOA because, afterall, it was a legit foreclosure and sale, but the foreclosed homeowner as they are still owed money from them by means of the deed of trust, so such judgement would probably continue to follow them rather than they be forgiven on the note. It would be very common to see bankruptcy in such extreme situations.

RICH

This is the most eye-opening thing I have read in a long time. Thank you.

RICH

A 100k house came up in my neighborhood for auction tomorrow - I just put in a $200 bid. So exciting!

Pulaski

RICH

Sold for 80k to the bank. Serious bids started at 40k.

mrken30

I had a $400 lien put on my house by a contractor. they ended up dropping the lien after we had both paid a few thousand in attorney fees.

This sort of stuff should really go through small claims. Welcome to America.

It's very easy to lien a property, and yes, some HOAs will put on a lien for $100