Foreclosure Problem

Our foreclosures require a 3 month public notification ran in local newspaper every week. After the 90 days public notice it then is going to public auction. Which is also posted.

Get a copy of newspaper or other source used to give public notices. Look in the legal section to see if it is posted. Make sure HOA is still sending notices to the HOA address itself certified. Do not open. Need proof being sent and ignored.

Melissa,

I believe the notice requirements kick in once the court authorizes a foreclosure.

Yes, courts are backed up everywhere, and legal procedures can be time-consuming at the best of times. It's frustrating, but it's how things go.

I also question if the right process was followed. Meaning was their liens files first? Has the HOA tried to add fines into the mix?

A HOA can only foreclose for unpaid dues. Plus interest, late fees, and legal Cost.

I would question is this a lawyer who said I will do what you tell me to do or went through the actual process?

The judge will not sign off if the process was hinky.

I would contact the lawyer not the judge. Plus this is not a situation to sue. Foreclosure is the best route.

The more rejection you get showing notices delivered to the proper HOA address the better. They may live somewhere else but the HOA address is necessary to show proof.

Can check your local tax office to verify you have the right person. It could be an unknown situation with the ownership.

The lawyer should be contacted to find out the issue. Something may be off if they claim fines are included. They should not be. If so, then need to redo the math.

Let me add to this, We have a property that for all intensive purposes is 4 years behind in assessments. Instead of cutting their losses and selling, the
owner let the house become a HUD home. They are so deep in arrears that they are on a payment plan with the collection agency. when the collections
to the CA stop, we have voted twice in executive sessions to exercise our right to foreclose. in my opinion the foreclose should be filled immediately while
the ink is drying on the NTP. NO, the law say we have to wait, and wait and wait some more, phooey.

Yes, and there was a lengthy delay in many cases before COVID, so I feel Dennis’ pain, having dealt with this crap for 5 years as board treasurer. Unfortunately, HOA foreclosures can be a massive “hurry up and wait” game – first you wait to see if the owner will even respond to the association’s letters, followed by the attorney’s letters, then a notice of lien (which the mortgage company should get a copy of), then a bankruptcy notice and/or tax lien, public auction, etc., etc., etc.

Since the foreclosure won’t go anywhere until the judge signs it, I’m afraid everyone’s correct in that you’ll need to wait. You might ask the attorney to explain the procedure to the board – and why things are taking so long. They still won’t be happy, but at least they can’t blame you for this.

To be blunt, waiting four years before taking legal action didn’t help the association either – one of the primary lessons I learned was that you have to jump on delinquencies quickly because the longer you wait, the less likely you’ll get to collect. However this case ends, I hope you've made changes to your collection policy and that everyone knows how these things will be addressed.

I understand LetA’s point about some HOA boards using the foreclosure process, but I also know (and so does anyone else dealing with HOA delinquencies) that there are unscrupulous homeowners who are really good at gaming the system. That’s how some wait until just before a sheriff’s sale is announced and then apply for bankruptcy the day before. They know bankruptcy stops all collection efforts until the court sorts it out – or throws out the case because they don’t comply with the payment plan in a chapter 13 filing. And then it starts all over again – we had a homeowner that we went round and round with this stuff. Your homeowner sounds like our homeowner’s evil twin.

In fact, have you checked to see if this homeowner has filed bankruptcy? Chances are good that if you aren’t getting paid, neither is anyone else. You may also find the mortgage company is pursuing its own foreclosure, in which case, you may as well suspend your action, ensure the association has an active lien and then wait some more (because you may have no other choice) before someone makes a move. In the meantime, if these people are driving late model vehicles, I wonder if the HOA attorney can attach that (I seem to recall our association attorney did this for some of his clients).

After 4 years of this, I hate to say it, but y’all may as well prepare for eventually writing off this entire account. It may happen a year or two from now and it’s best to wait until the homeowners are gone for good because they will stay in that house until the last second.

How to fix it? I’ve said and will continue to say the banks and mortgage companies need to start enforcing the language in their agreements that state the homebuyer cannot do anything that would result in a lien being placed against the property. What should happen is that the association should be able to contact the bank or mortgage company and compel them to have a come to Jesus meeting with the homeowner and either get him/her/them to cough up the money, or they can pay it. It would be even better if they simply added the HOA fee to the mortgage payment – if the homeowner doesn’t pay, take the bloody house, as long as the HOA gets its money and doesn’t have to contend with reduced services or higher costs for everyone because they have to indirectly subsidize people who can’t/won’t pay.

Max, who no longer posts here, worked for mortgage companies and listed out several reasons why this will never happen, starting with the difficulty of keeping track of self-managed HOAs vs. those that are managed by property management companies. I contend that just because it isn’t easy doesn’t mean you get to avoid doing it. Somewhere, there’s someone or several people who can come up with a solution with the right support and backing – it’s a matter of finding them and doing it.

We would need more details on the situation. However, foreclosure without a doubt is what your HOA needs to pursue. It stops the bleeding. Basically gets rid of the owner whom doesn't contribute to the HOA income. A lawsuit holds absolutely no weight or punishment. It is more expensive than a foreclosure. Just bleeds the HOA funds.

Don't take offense but some HOA's hire lawyers whom favorite phrase is "I will do what you tell me to do". This is a HUGE Red flag. It also may play a factor in the situation your HOA is currently in. A lawyer isn't going to tell you a lawsuit is a bad idea. Especially if your HOA board is uneducated and likes to watch a lot of "Perry Mason". Tell a lawyer you want to sue and they will sue. Ask a lawyer what other options are available and then decide amongst those "evils". If your HOA has already pursued the lawsuit route, it is probably hindering the foreclosure process.

Honestly, I feel your HOA is dealing with a lot of "muddy water". A foreclosure should be a clear cut case. You file the paperwork. Wait the proper notification time. The public auction happens. There is a period of "redemption" time that varies in each state. That period of redemption can take up to a year. So just because the HOA foreclosed doesn't mean anything can happen to the property during that period of time.

It is NOT a fast process. Expect atleast a year. The HOA does NOT want to own the property. Don't even entertain that idea. It's a huge BAD idea. Your goal needs to be to un muddy the waters. Get the foreclosure back to unpaid dues, late fees, interest, and legal fees. That may help grease the wheels...

The lawyer isn't going to be able to do anything if the traffic jam is in the courthouse. The lawyer could check to make sure that they've done everything correctly on their end, but a pesky lawyer can also antagonize people that shouldn't be antagonized. This is one of those situations where being a squeaky wheel can be counterproductive.

We have something called fast-track foreclosure here in Florida that can be used if the defendent doesn't contest it or if they simply don't have a case. Even then it can take more than a year for a foreclosure.

We have a home in our community that is in foreclosure and we are owed a large amount in assessments. We had a lien on the property and probably would have started foreclosure but the bank beat us to it. We're officially a party to the suit, so we will get our money when the house is finally sold or the owner redeems it (she won't, she simply doesn't have the funds). But the games the owner is playing are delaying the foreclosure and we won't see the money for a long time. First, she claimed the foreclosure wasn't valid because the loan has been through many servicing companies and the original note was lost along the way. That was ruled invalid. Then, the night before the foreclosure hearing, she submitted a "sales contract" for the home. However, it was a sales contract from one of those "we buy houses" organizations that you see the signs for on the side of the road. It wasn't even signed. She had gone on their website and gotten a rough offer from them. I don't think she has any intention to sell the house - she was trying to delay. The judge gave her an additional three months. That was six weeks ago. We know the house isn't under contract because there hasn't been an estoppel request. She could legitimately sell the house for a couple hundred thousand dollars more than the loan amount, but she is not letting go. So even when they get the foreclosure judgment it will be at least six additional months and they will have to evict her. She knows exactly what she is doing. Usually they delay by setting up payment plans with the mortgage company so that they get additional time, then don't follow through on the payment plans.

I can follow all of this because the case is on our county court website. Most states allow this information to be public. It's worth looking at. I look there for any cases where we have a delinquency to I can get information about whether the person may be having other financial difficulties (being sued by credit card companies, for example) or if they maybe just forgot to pay.

In the case of the original poster, who hasn't been able to contact the owner for years, you may want to see if they are having other court cases or you can figure out if there is something else (guardianship) going on.