Foreclosing on a Bank?

I did a foreclosure in my HOA. Won't bore you with the details.. The property didn't sell to the bidder who backed out. The HOA didn't want the property either. The bank eventually turned over the property to HUD. It became a HUD foreclosure in the end. Which is another entity than the bank. None of which is going to pay the dues during their ownership.

IF you didn't have a lien on the property prior to the bank foreclosure, your NEVER going to get the money. However, if you did have a lien doesn't mean you get paid either. A foreclosure the bank ALWAYS gets paid first and whatever money leftover goes to pay off the other debtors. The HOA's lien being one of them.

Don't expect the bank/HUD to pay any of the backdues owed when the property went into foreclosure. They MAY pay ONLY the amount of missed dues when THEY owned the property. No owner would be responsible for previous owner's debts anyways. So until the bank/HUD unloads the property, do NOT expect to get the money they owe. You will be lucky to get it even after it's unloaded. It's kind of a guessing game unless you keep up with the situation.

Banks do pay for the dues while they own the property.(Most of the time) However, most bank's hold out on paying until they sell the property. It's how we knew how some of our properties were sold. We'd get a big check from a bank. No use in putting a lien on a bank. They already own the first lien...

I can't say that it's 100% that bank's pay current dues on their HOA property. They don't have a copy of the rules of the HOA nor have an interest in how the property is run. A bank won't come to a HOA meeting nor vote at elections. It depends on the HOA and how it operates if the bank pays. A functional HOA would be in contact with the bank to let them know about the HOA's dues. A disfunctional HOA, is too lost and confused to know what to do. This is where the "fudge factor" of "MOST" comes into play. A bank/mortgage company can be just like any other potential buyer who may or may not be aware of the HOA existance...

The HOA really does NOT want to own the property. It means the HOA has to make mortgage payments. Can they afford that? It's NOT like it's "free property". The property has value and that value is whatever is still owed the bank. The HOA may have other related expenses when it comes to purchasing foreclosed property. There are legal fees and possible tax responsibilities. The HOA would have to pay the dues on the property, maintenance costs, and any other costs associated with home ownership. Some states even allow the original owner to purchase back their foreclosed property up to a year after the foreclosure plus any improvements.

Unless your HOA can afford to own a home or afford to buy/sell a home. It's not worth going down that path...

I believe where we are it's taxes (city and state) first, 1 mortgage holder, HOA, 2 mortgage, and then other liens in order of filing. The taxes are current. My understanding is, and what I was trying to find out for others with experience, once the home forecloses and the redemption period expires, all liens except taxes are discharged. The bank has accepted the home as payment for their secured dept. So, in a case like this, the bank would now essentially be the owner free and clear... there is no longer a mortgage lien, as it was discharged when the bank accepted the house. So, if the hoa foreclosed on the bank, there would be no mortgage payments to make.

While it wasn't the intention of this original post, as far as being "cold-hearted enough to kick your neighbor to the curb, and take on the task of selling the newly foreclosed house," as I mentioned previously, the house has been bank-owned and it has been empty for over a year with no signs of trying to pay their dues or move the property. There are no neighbors being kicked to the curb or newly foreclosed homes. Although, I am not in principle opposed to initiating foreclosure on homes that don't pay dues or make any effort to make payment arrangements ... I believe that it IS "cold-hearted" to expect your neighbors to pick up the slack when you don't make any effort to pay your share of the association bills ...

WillV posted earlier as ChloeC and the moderators removed that one.

When will companies learn that if they can't follow the simple rules of a forum, why would potential customers expect them to follow the more complex laws of the State or Federal governments?

You're right Kelly. You can't hold a lien on a property you own outright. The post-foreclosure title is clean. And the bank is 100% liable for the post-foreclosure assessments.