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HOA liens and past due

Posted by Drew Ludlow on May 1, 2013 at 8:10am in Short Sale Discussions

It used to be that I never had any trouble getting the banks to pony up on HOA liens and past due amounts.

Though, on my two most recent transactions, BoA and Wells Fargo are both saying that they do not pay HOA past due amount - even if they are liens.

I don't get it.  If it is a lien, shouldn't it be treated like any other Jr lien to be satisfied up to $6k or whatever percentage is used?

One of these transactions is FHA, and the other is a Fannie streamline.

Any tips on how to shove these through? 

How do you note them on your prelim HUD?

In both cases, the Sellers can tackle most of it, so I think we'll be OK.  But it just makes me mad that I'm being caught off guard here.  I don't like potential roadblocks.

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Replies

  • Jonathan Katz May 1, 2013 at 10:12am

    Drew,

            For the Pre Foreclosure Sale (FHA) you should be able to have the lender release 1,500 or 2,500 ( seller's incentive included ) to the HOA.  The Fannie Mae deal probably won't allow a release to the HOA and FNMA doesn't allow contributions to outside liens to show on the HUD. I'd contact the HOA to settle for less.

    If you have any questions please feel free to contact me as my door is always open.

    Brett@ishortsalenow.com

    www.ishortsalenow.com

    310-564-6389

    • Drew Ludlow > Jonathan Katz May 1, 2013 at 11:18am

      yeah... once the FHA negotiator learned that it was a lien, she said the incentive can cover the first $1000 and then FHA would kick in another $600.

      So... if it were just 'past due' and not a lien, then HUD won't pay?

      Also, with Fannie, would they not pay regardless of whether it is a lien or just past due?

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