Will HOA help me force bank's foreclosure?

Hello,

My name is Nick. My unit is in Illinois. After a financial hard time, I moved out of my house and went delinquent on my homeowner's assessments. Ultimately my difficulties led me to file bankruptcy in September of 2010. I surrendered the unit in the bankruptcy. My lawyer had not informed me that I would be liable for assessments after the bankruptcy.

I have since moved out of Illinois and I just received correspondence from the attorney of the association indicating a growing balance of pass due assessments. Now that I am aware of the problem I am prepared to deal with it. However, the bank has not set a sale date and although I am willing to pay off the balance and monthly assessments until the sale, I want to be done with this and not have this be dragged out for years with me paying assessments for a unit in a different state that I hadn't lived in for 2 years.

If I offer to cover the association's costs of filing a foreclosure motion along with my assessments in arrears and I advise the court that I am not contesting and request summary judgment, is there any reason the association won't go along with it?

The bank gets the money no matter IF the Association forecloses on you or not. They are FIRST to get paid and any extra is divied out to the other debts. If the HOA has a lien on the property, they would be next in line before credit card debts and such.

Is it the bank or the HOA that is actually foreclosing on you? It can't be BOTH. If the bank is foreclosing and the HOA has a lien on your property, then this will be part of the proces of foreclosure for the assessments to be paid off. Believe me, the HOA does NOT want your property and would rather the bank have it.

It's just best to let the bank finish foreclosing and walk away. Which is what you have done anyways. Paying the amount owed on property in bank foreclosure is just tossing money away. However, IF it was a HOA then you would have been keeping your house instead if you paid.

The HOA foreclosure process is different than a banks. NO the bank does NOT get first dibs on the foreclosure auction. Matter of fact the FIRST bid is $1 more than the amount owed the HOA and it goes to the HOA. Which means the HOA has the potential to be stuck with the home. Which is NOT good because they have to pay the auction price which is the amount owed to them again, plus pickup the leftover mortgage payments, fix the property, and pay for selling/maintenance till sold.

He mentioned the bank had not set a sale date for the property. This doesn't mean the foreclosure process of the bank hasn't been completed. Banks sell off their foreclosed properties. However, this process can take a very very long time to complete. If indeed the HOA had a lien on the property prior to the bank's foreclosure, then the bank may be dealing with that. Most likely won't pay until AFTER they sell the property.

Find out if the HOA has a lien against your property. Find out if the actual bank foreclosure process is complete. Just because they haven't sold the place doesn't mean they haven't done a foreclosure auction. If no one bid at the auction, then it remains bank property but it isn't yours. Which means you may not be on the hook for these past due.

You were correct that any money owed to a HOA is NOT covered in a bankruptsy. People are unaware of this and so are HOA's in some cases. It's a frustrating lesson when it comes to light...

Windfall for the HOA? NO. A foreclosed property is NOT a windfall for a HOA to own. It's an expense that drains their account. If your HOA truly only has 3,600 in their account how could they ever afford the property or even legal costs alone? They aren't going to get paid the back dues unless they have an existing lien. They have to purchase the home just like anyone else purchases a foreclosed property. A HOA isn't in the business of "house flipping".

The case sounds like the bank is still processing paperwork of which a HOA lien may be part of. If no one buys the home, (which banks can use realtors to sell the property not just auction)then the home gets turned over to HUD. A government agency. Which ultimately means the HOA has an abandoned property sitting in their neighborhood bringing down their home values.

It would be nice to live in your head where your sugar-coating the outcome/situation. However, the reality is...There's a house sitting on HOA property NOT contributing money, draining their resources, and generally an eyesore to deal with. Sorry to be so blunt but it's no longer your place to fix the situation you left things in. You left a mess and you can't go back and decide to clean it up now that you have the cleaning tools. It's a lesson learned and hope you don't file for another bankruptsy.

Your still not getting it. He does NOT own the property. The bank does. So why would he be on the hook to pay anything to the HOA? The bank simply hasn't sold the property off. Which isn't any of his concern because he's not getting any money off the sale. Plus IF the HOA has a lien or had done the foreclosure process the bank is STILL the one that gets the money. The HOA gets whatever is leftover if any.

Now the HOA would NOT be included in his bankruptsy. This would explain why he is still on the hook for the backdues. However, since the bank now owns the home they also own that debt. It may just appear on his credit report.

I some 1 person in my town that hasn't paid a mortgage payment in 3 years. Bank still has not foreclosed. It happens everyday.

Nick, bad idea.

This is what they call a reverse forclouser. Many HOA have tried this tatic and failed. Many banks have lots of very powerful attorneys and they will drag this out in court and bankrupt your HOA before it even goes to sale.

If the real world ready worked this way, dont you think everyone would be doing it. You are not special.

In our community, we have about 15 houses in some sort of loan forclouser. about 7 of those house are abandoned. all of these houses have back HOA dues, which is a HUGE strain on our community right now. I would LOVE to get these banks to just deal with the problem and not dily daly, but you just cant.

Instead of asking your friends to buy a bank owned or HOA unit, ask them to pay your back dues. You being that "in the hole" is making others in your community have to pay extra and serivces are not being preformed because of this.

Have you asked your HOA to give you a payment plan? Have you offered to just pay for the back dues and no other fees and also reminding them that if they dont take this, they will get nothing?

It looks to me you have already done your research, so why are you asking? So, to answer your first question, YES. Should you ask your HOA to do it even though they are aware of the risks, as well as you? NO. Let the board member decide if they want to take that sort of risk and if you want to go to the meeting to give them your research, by all means, do it. However, when you give them that information make sure it is balanced and if them the “negatives” as well.