HOA is foreclosing its lien


Sarah: Hey. I wanted to kind of piggy-back off that foreclosure question. My mother is actually foreclosing on her home; she is been in the home still for the last three to four years during the foreclosure process. Now, recently she got a letter in the mail saying that the community was coming after the home, because it’s a deed community, so she hasn’t been paying the HOA bill. Now that process is really confusing for me looking over it.  My father is the one actually on the financial portion of the home and they are divorced but my mom was on the deed of the home, he is the longer residing in the house.

Attorney Tom Olsen: Okay. Sarah the lender has for the last three years; the bank has been doing their own foreclosure. You’re telling me that your mom has not been paying HOA fees, so the HOA can do their own foreclosure.  

Sarah: That’s correct. What is the situation on that? I understand the--

Attorney Tom Olsen: Excuse me. Nancy, ask me that question again; what is the what?

Sarah: What is going to happen with the HOA? I don’t understand..

Attorney Tom Olsen: Okay. Let’s say that your mom owes her HOA $10,000. They are going to file a mortgage foreclosure like any other foreclosure, they are going to do an auction on the courthouse steps. And if somebody’s there bidding on it they will become the owner of it; if they don’t, then the HOA will become the owner of your mom’s house. 

Sarah: I see. It’s not something where the bank will pay out the HOA to get the home?

Attorney Tom Olsen: No, the bank doesn’t care if the HOA does their own foreclosure. Whoever buys that piece of property, at the HOA foreclosure sale, will buy it subject to the bank’s loan. 

Sarah: Okay.

Attorney Tom Olsen: So Sarah, your bank has fooled around for three years, your HOA has not. So your mom’s days are limited in that home. 

Sarah: I listened to your earlier question about-- how long can they tell you that you have to be out? Or is there no date; they just--

Attorney Tom Olsen: The very last step in a mortgage foreclosure is where they sell the property on a courthouse steps, so there is an auction-- I say courthouse steps but Orange County does it on the computer now. I went to a foreclosure sale Seminole County and Seminole County is a bit old school; we were literally in a room with people bidding on property. So in Seminole County still do this auction; live auction. So at that auction, the title to the property is transferred to the new owner whether it’s the HOA or third party buyer and that auction sale becomes final 10 days after the auction. So if your mom continues to receive mails she is going to find one of the pleadings that she will get is a sale date; 10 days from that sale date is when it is over.