HOA foreclosure

Heather, I would try to get their mortgage companies to foreclose. Another approach, when allowed by the Covenants, is to go to court for garnishment of assests. A judicial foreclosure could be prudent if an account is thousands in arrears.

I have done a HOA foreclosure. It's a better situation for the HOA IF a mortgage is up to date than not. The reality is the HOA is doing the work for the bank when the do the foreclosure. That is because the bank ALWAYS gets paid FIRST before the HOA or other debtors. IF the owner doesn't owe the bank money, then the full amount the HOA is foreclosing for and legal fees are potentially covered. If they owe money, then the bank SUBTRACTS that money from the amount the HOA is foreclosing for.

A foreclosure STOPS as soon as the amount owed is paid. It really that easy to stop a foreclosure but people tend NOT to make it that way. Expect a nasty legal battle that the HOA can win. Just have to stay strong. It's cheaper to counter-sue to if they threaten to sue. The counter-suit can also contain monies they may owe.

The process can take just a few months. Some states allow the foreclosed owner the right to purchase back the property to a year after the foreclosure. HOwever, they will have to pay all the money owed originally and any improvements the new owners may have done. They will of course have to re-purchase the house with a new mortgage payment.

The actual foreclosure process IF it goes that far. The owner will have to be notified by certified letter and an AD in the LEGALS section of the local newspaper will be posted. The ad in the paper will cover the PUBLIC notice requirement if they refuse to answer the letter or claim they weren't notified. The lawyer will do their lawyer stuff until the final auction. Our county does the auction at the outside of the courthouse on the stairs. The lawyer simply stands at the stairs and screams out the foreclosure information. This is what they call "Public Outcry". It's in your documents.

The first bid goes to the HOA for $1 more than what is owed. The HOA should PASS this up and have other bidders lined up if possible. The HOA does NOT want the property. If they were to buy it, they would have to pay not only their legal costs but the amount of the bid/auction. This starts out at the amount owed the HOA. However, don't think your getting a house for 5K...The HOA would have to pay the 5K PLUS get a mortgage for the home, pay for any repairs, dues, maintenance, and sales cost if it is sold. Unless your HOA can afford a house payment and dues, it's NOT worth buying the property.

The HOA can foreclose for amount owed, late fees, interest on the amount owed/late fees, and legal fees involved. The interest amount may be in the CC&R's or whatever legal amount is allowable by law. Which is about 5-6%. The HOA best hope is to find a new owner who will start over paying the dues from scratch and continue paying. The foreclosure process allows for that to happen instead of continued bleeding...

Heather - I have just come across a very helpful website...

http://www.floridacommunitylaw.com/lawyer-attorney-1612986.html

In the menu across the top there is a section "Helpful Resources".
The article "Should my board foreclose on its lien during this foreclosure crisis?"
pertains to your question.

Also, there is a lot of excellent information about the Florida foreclosure process in Florida.