NC Foreclosing on Zombie House?

The situation you describe is not uncommon. The former owner's military status may be holding the bank from foreclosing.

A good case can be made that the bank has constructively taken possession of the property if they are maintaining it even to the slightest degree and/or paying taxes. If I were in your position I would seriously consider suing the bank for those unpaid assessments. Considering the amount owed versus the cost of defending against the lawsuit, the bank my choose to settle rather than fight. Have your association's attorney make a demand on the bank and see what happens.

Suicide is also a way to stop bleeding and in this case, foreclosure would likely be suicide.

Foreclosure is a judicial procedure in which the defendant homeowner must be given notice, by way of summons and complaint, and an opportunity to respond. A defendant who cannot be located presents a problem as personal service of process is the desired method of giving notice.

There are alternative methods of service, such as by publication in a newspaper, but the courts normally require the plaintiff to show some evidence that the defendant cannot be found before allowing some other means of service. This means that your attorney will hire some number of process servers and/or private detectives to provide affidavits that they could not locate the defendant and that an alternative method of service is justified. All of this work must be paid for by the plaintiff HOA and can easily run into a thousand dollars or more.

Then there is the issue of whether the homeowner is in the military and whether federal law would protect him from an HOA foreclosure five years after abandoning the home. An attorney is going to charge his client for his time in researching this issue and writing up a memorandum of points and authorities.

One should never lose sight of the fact that when litigating, there is no upper limit to what you may need to spend.

If the HOA prevails in the foreclosure, they or someone else, will become the proud owner of a dilapidated home with a superior lien hanging over their heads. I don't know about NC but in my state the new owner would have 30 days to pay off the first mortgage. Good luck finding a buyer.

Foreclosures on properties with superior liens are always risky. In this case where the owner is at an unknown location, his military status is uncertain, and the bank has a superior lien, there is a lot of risk and a lot of foreseeable expense, all to collect a whole $5000. This is a suicide waiting to happen.

LetA,

There are databases that are required to be searched to prove if a member is military or not when dealing with foreclosure. Our attorney checked that (as required) prior to filing a collections action in court.

The Service Members Civil Relief Act of 2003, which replaced the Soldiers and Sailors Civil Relief Act of 1940, no longer requires that the member be deployed to have these legal benefits.

For more info on SCRA see:

https://scra.dmdc.osd.mil/

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