LindaD4 (South Carolina)
Posts: 12
Posts: 12
Posted:
A home is foreclosed on. Can the HOA collect the dues from the bank from the time the bank took possession? or is the HOA out that money?
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Foreclosed homes and HOA dues
Started by LindaD4 • 4 replies • 1219 views
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SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
Well, you can TRY, but don't be too surprised if you have to write it off or find another way to collect.
Our HOA attorney has told us that generally the HOA is left holding the bag because the mortgage company holds the mortgage and so, they'll get their money before anyone else does.In many case, the HOA is left with little or nothing and has to hope someone else buys the property and begins paying again.
I'm told you can sue the homeowner for the unpaid amount, but that doesn't always work because if he/she didn't pay the mortgage, chances are good that little else was paid.
You may want to use the search mode on this site and find dozens of posts on this subject - hopefully, someone has a novel approach on how to get some of the money back.
Our HOA attorney has told us that generally the HOA is left holding the bag because the mortgage company holds the mortgage and so, they'll get their money before anyone else does.In many case, the HOA is left with little or nothing and has to hope someone else buys the property and begins paying again.
I'm told you can sue the homeowner for the unpaid amount, but that doesn't always work because if he/she didn't pay the mortgage, chances are good that little else was paid.
You may want to use the search mode on this site and find dozens of posts on this subject - hopefully, someone has a novel approach on how to get some of the money back.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
BrianB (California)
Posts: 2,820
Posts: 2,820
Posted:
the dues are paid/owed by the owner. When the first owner defaults, usually the HOA loses to other more senior groups who hold higher liens on the home. However, once the bank owns the home, then THEY are the legal owner, and you can certainly hold them responsible for the dues incurred SINCE the filing of foreclosure.
It can be tough to collect, but keep at it, be persistent.. often, they will pay them when they find a new buyer, rather than let the title be clouded by a lien or potential lien from you.
And, as stated, the previous dues are still owed by the person who owned the house before, so you can sue them for it, good luck there.
It can be tough to collect, but keep at it, be persistent.. often, they will pay them when they find a new buyer, rather than let the title be clouded by a lien or potential lien from you.
And, as stated, the previous dues are still owed by the person who owned the house before, so you can sue them for it, good luck there.
KirkW1 (Texas)
Posts: 1,665
Posts: 1,665
Posted:
The fees are typically both a personal debt of the owner, and a burden on the land. That being said, normally the HOA assessments are junior to the primary mortgage (but not always). That being the case if the first mortgage company forecloses then if they sell the home for more then they are owed, the HOA will get what they have next. In this area, it is not unusual for the bank to leave the land encumbered to the HOA. (Or at least a board member who has purchased two houses from foreclosure said that was his experience.)
Brian is very correct that once the bank owns the land, they are still subject to any new fees assessed. And you can file a new lien and then it would be first in line.
Brian is very correct that once the bank owns the land, they are still subject to any new fees assessed. And you can file a new lien and then it would be first in line.
BruceF1 (Connecticut)
Posts: 2,535
Posts: 2,535
Posted:
You would have to check the laws in your state and the mortgage agreement with the lender. State laws snd mortgage agreements vary.
I was discussing this matter just the other day with an attorney who handles real estate, HOAs, foreclosures, etc. He told me that in Connecticut HOAs have a statutory lien on properties that takes precedence over the bank's lien. Mortgage agreements in CT generally have a clause that if the borrower fails to pay the assessments, the bank can force the borrower to escrow the assessments (same as for taxes) and the bank then pays them on behalf of the borrower. This makes the bank's lien primary and they can foreclose on the property.
In other states, the HOA's lien is secondary to the lender's lien. I've read articles in the news where that has been a problem for some HOAs.
I was discussing this matter just the other day with an attorney who handles real estate, HOAs, foreclosures, etc. He told me that in Connecticut HOAs have a statutory lien on properties that takes precedence over the bank's lien. Mortgage agreements in CT generally have a clause that if the borrower fails to pay the assessments, the bank can force the borrower to escrow the assessments (same as for taxes) and the bank then pays them on behalf of the borrower. This makes the bank's lien primary and they can foreclose on the property.
In other states, the HOA's lien is secondary to the lender's lien. I've read articles in the news where that has been a problem for some HOAs.
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