What to do after winning an hoa foreclosure and now the bank come to foreclose on the property

Started by VilmaW • 13 replies • 565 views

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VilmaW (Florida)
Posts: 1

Posted:

We purchased an HOA foreclosure through a county website for $18,100.00
Three months after we took charge of the property, the bank came to foreclose on the property.
They sent us paperwork with inflated fees including a second mortgage.

We tried to negotiate with the loan servicer but they refused to communicate with us, instead they told us to get a lawyer.
They eventually took us to court but the judge refuse to acknowledge us as third party owners to the property.
When we won the bid,we were given a title to the property.

Unfortunately we didn't do a title search so we didn't know there was a 2nd mortgage on the property.
However we did learn that we were only responsible to pay the balance of the 1st mortgage not the 2nd.
The bank insisting they wanted the inflated price took the person they gave the mortgage to court.

We went since we are now living at the property and spent money to refurbish property to normal living condition.
Judge still denied us and gave rights to the bank to sell property in foreclosure auction.
Property went back to the bank in foreclosure for $180,900.00

Since we realized it was partly our fault, we didn't do a title search, we decided to purchase the property for what the bank took it back for from the auction.
We made several attempts to connect with the loan servicing dept.to give us a payoff for the property however they refuse to respond to us instead they just want to evict us from the property.
We need your input as to what to do from here,we are lost for words,really need your advice.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Oh boy... Was this your first time doing this? It sounds like it. Hopefully you weren't taken in by watching those "House flipping" shows. There are many details they don't talk about. Like the foreclosure types they do are usually TAX foreclosures and not necessarily bank. A whole different ball field. (1 thing assured is death and taxes...)

My guess is that this was a HOA foreclosure? Or atleast it started out as one... When a HOA does a foreclosure it's usually for back dues owed and prior to the bank foreclosing. Otherwise the HOA is doing all the work for the bank. Which the bank in most states gets paid first and foremost.

So if I follow the bouncing ball, you bought this at a HOA foreclosure, then the bank decided it was time to do theirs. Well hate to tell you but you are on the hook also for what is owed the bank. The HOA was most likely foreclosing on their end for the unpaid dues. After that you as the new owner was to take over the mortgage of the home. Something I often inform people on this forum about....

You also may live in a state where there is a period of "right of redemption". This can be a period of time of Zero to 1 year. Meaning the original owner can come back up to a year later and get the property back. They just have to pay what they owe the HOA, foreclosure costs, and pick up the mortgage again. Plus if did any improvements that may or may not be need to be paid for. Hence why when you buy a foreclosure you do NOT touch the property or do any improvements till that period of time is up. You'd improve the house and lose it in that time frame.

When the HOA foreclosed you should have had a lawyer to assisted you with finding out about a few things. Especially the fact you all had to pick up the amount the bank is owed. I can't say if they are really artificially inflating costs. You have to remember there are also property taxes to be paid. There is a cost associated with foreclosing. Which foreclosing fees can be several hundred dollars. Taxes if not paid can be the NEXT foreclosure this property faces... Make sure to check that too.

Unfortunately, you did make some mistakes. Identifying them may be one of the 1st steps in rectifying the situation. Sorry not best news but hope it gives some clarity on what happened.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

This is really a legal issue.
Since you went to court, you will need to go to appeals the court ruling, if possible.
Research on web sites is one thing.
Actual legal advice should come from an attorney.
In this case, one versed in foreclosures.

It is possible that you have lost your home unless something can be worked out.

I know it's not what you want to hear.

You also need to make sure that the foreclosure action doesn't go on your credit report but on the actual individual who defaulted on the loan.

NpS (Pennsylvania)
Posts: 4,216

Posted:

As Tim said, you should be getting your advice from a lawyer who specializes in foreclosures.

Be sure to talk with your lawyer about putting a lien on the property for all the money you put into upgrading things.

Sikubali jukumu. Read all posts at your own risk.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Yeah - horrible story, but wrong forum.

PaulJ6
Posts: 990

Posted:

Would you be able to go after the seller for fraud or misrepresentation, for failure to disclose the second mortgage?

You may have claims under the Fair Debt Collection Practices Act against the bank and the servicer, although damages are normally nominal.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

nothing you can do. you failed to get a title search done, and now you are going to loose all that money and time. very sad, but you cant get something for nothing

MelissaP1 (Alabama)
Posts: 13,836

Posted:

There was no "seller". It was a foreclosure held in the PUBLIC. This means when you buy a house by these means you are responsible for doing the research and taking on the liability. Spending money fixing it up BEFORE the right of redemption ends is a huge risk.

It is best to talk to a lawyer for the best foreclosure advice. Each state varies. Just so many mistakes made that really need a professional help.

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Vilma

And you thought you were getting as deal.

AugustinD
Posts: 5,144

Posted:

Quote:

Posted By VilmaW on 12/21/2019 8:37 AM
We purchased an HOA foreclosure through a county website for $18,100.00

VilmaW, was this property on sale at the county web site specifically due to non-payment of property taxes? In other words, was this a tax lien sale? Else I do not see why the county would be involved.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By AugustinD on 12/22/2019 10:07 AM

Posted By VilmaW on 12/21/2019 8:37 AM
We purchased an HOA foreclosure through a county website for $18,100.00

First sentence in the OP's posting:

Quote:

Posted By VilmaW on 12/21/2019 8:37 AM

We purchased an HOA foreclosure through a county website

AugustinD
Posts: 5,144

Posted:

My bad. I see HOA foreclosure sales are often run by counties and do not have the kind of lien prioritization yada that tax deed sales often have.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I re-read the post. Had gotten some #'s wrong. County website could indicate a HOA foreclosure. A tax lien foreclosure is usually after a bank foreclosure and no one picks up the property.

Does anyone else feel the OP went to one of those seminars for house flipping? Think may be the first time setting their toe into the home flipping business. Much to learn and little do they discuss at those seminars or TV shows. Leaving details out like the type of foreclosures they pick up are usually Tax foreclosures not bank/HOA/county.

They aren't getting listened to because they aren't the "owners" as they think they are. At this point, they may need to show up at the public auction when the bank puts it up for auction. However, the bank may negotiate a deal if you go directly to them. If your getting a loan elsewhere, that may be the real issue here. They aren't going to loan the money out for a foreclosed property.

Have you contacted the bank that actually is foreclosing? Can a short-sale be arranged? Maybe talk to a Realtor. Typically not suggest a real estate attorney in a HOA. However, this is a real estate issue.

Trying to be helpful but there are some glaring mistakes been made here that it's hard to not recognize fault...

Former HOA President

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

We went since we are now living at the property and spent money to refurbish property to normal living condition.
Judge still denied us and gave rights to the bank to sell property in foreclosure auction.
Property went back to the bank in foreclosure for $180,900.00

Seems like the bank already foreclosed in court and they lost title.

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