Replies to This Discussion

Permalink Reply by James ferebee jr on June 3, 2010 at 1:29pm

How in the world can HOA foreclose & take over the property without paying off 1st mortgage....???????
Never knew that one could happen...

Jim

Permalink Reply by Lori Young on June 3, 2010 at 2:09pm

Yes. On the foreclosure filing was Chase included? Did anyone from Chase show up at the sale? We had one where the HOA did NOT include the senior lien holder. We found a buyer for the property, had the HOA President sign the offer. We included the deed and foreclosure documents to the lender. On the HUD-1 we included the commission and total due to the HOA. We closed last week. The lender was mad that the HOA attorney never noticed them about the foreclosure proceedings stating "this could have been taken care of with communication".
P.S. HOA has the property and HOA has a mortgage this never makes since to me for the HOA to file foreclosure. Why not call the lender if the borrower is not paying?

Permalink Reply by Ben Benita on June 4, 2010 at 3:35am

something is wrong here....if the home is upside down, the HOA would be VERY foolish to foreclose as they would get paid AFTER the first and second with Chase.....

I would double check, maybe the HOA is threatening to foreclose?
I also know the HOA can take the owner to court for fees even AFTER the sale if they are not paid for at the short sale closing....

Permalink Reply by Jeff Payne on June 5, 2010 at 5:24am

I believe that the HOA can foreclose on the property for past HOA fees and it would be up to Chase to purchase the property at the foreclosure auction. I am sure Chase was named in the foreclosure suit and if they did not show up at the foreclosure sale to protect their interest, too bad so sad for them.
We recently had a foreclosure sale here in Panama City Beach where a BEACH FRONT house was sold for something like a few hundred dollars (can't remember the exact amount) because the lender did not show up at th foreclosure auction to set the minimum bid.
Gee, I really hate it for Jamie Dimon at Chase to lose out to the HOA, NOT!

Permalink Reply by Ben Benita on June 5, 2010 at 1:49pm

Jeff, are you certain on that?
I thought title could not be transferred with liens in place and that Chase having a first and second lien, got paid first and second accordingly? I thought he ONLY exceptions to this were tax liens in certain instances?

We bought and sold foreclosures in the past and that was the case, maybe it varies by state? I again thought that in order to transfer ownership, all liens had to be cleared from title (unless maybe someone was paying all cash and title insurance was not purchased?

Christine, can you verify for certain the HOA owns this property and that Chase was never paid? If so, you have a HOME RUN real estate deal in the works.

You could likely pay the HOA ten times what they were owed for late fees, take over the property, then resell on the open market for a MONSTER profit?

Same thing to you Jeff (and you know I like you, just trying to learn), did you see actual proof where the oceanfront home was sold so cheaply? I again thought the title transfer could not be recorded without some type of written acknowledgmenet that previous and current lien holders had agreed to same.

Thanks for educating us with your response......I like your contributions.

Permalink Reply by Jeff Payne on June 7, 2010 at 7:35am

Hey Ben, I am not 100% certain but it has been my understanding that the HOA can foreclose on the property but they rarely do because the first lien holder will make sure that they have someone at the foreclosure sale to redeem the property to protect their interest. The ownership actually transfers thru a clerks deed. Again, I am not 100 % sure but it makes sense because when the HOA files suit, the include the property owner and the other lien holders.
As far as the ocean front home slipping thru the cracks, I got the information directly from the clerk of courts. He also told me that there is a 10 day period in which these foreclosure sales can be contested before he can record the clerks deed.

Permalink Reply by Christine Donovan on June 7, 2010 at 6:18pm

Jim - My understanding is that they can foreclose just like a second or third. They just do it subject to the other lien being in a superior position.

Lori - I don't know if anybody showed up from Chase. According to my title company, the two liens are still on the property despite the foreclosure and were not extinguished by the foreclosure.

It would have made more sense to me to negotiate this rather than foreclose, but I wasn't involved.


Ben - The HOA owns the property and currently holds title.
They may have to go after the former owner to get paid. I'm just wondering what the lenders might do about HOA fees where the HOA is now the owner.

Jeff and Ben - It's my understand that the HOA took title subject to both of the liens that were on the property.

Permalink Reply by Ben Benita on June 7, 2010 at 6:43pm

Christine -- the only way I see this making any sense is if there is equity in the property. You noted above that there is no equity, as such, what is the motivation for the HOA to own and take title to a home that is upside down?

I NEVER claim to be the brightest bulb in the box, but, am I missing something here?


I am familiar with subject to but again, why would the HOA pay to take title?
As the owner via subject to, won't the HOA need to start paying taxes, insurance, etc.?
Why would the HOA or anyone take title to an overfincned property, particularly being in 3rd position behind first and second liens?

For the HOA, i would seem much much easier to just take the owner to court and win a judgment against him/her for any monies owed. Most HOA's will not bother with this unless many many payments are missed, or, when title is about to be transferred....again, can anyone here clarify.

I asked a few other persons I know that have been around the block and none of them could make sense of it either?

Thanks for the education.....

Permalink Reply by Ben Benita on June 7, 2010 at 6:45pm

ok, last thing, any chance I can get the phone number for the HOA, I would honestly like to see what they are thinking and if I am missing something???
If you have it, or an address, you can e-mail it to me off of here, [email protected], and I will them and report back.....