HOAForeclosure Of Lien

HOAForeclosure Question

I paid an hoa lien foreclosure at a county auction. How do I get out of it? It is a joke because the bank has seniority and I have wasted $40,000!!

HOAForeclosure Answer

Kimberly, very sorry to hear of your situation. This situation is unfortunately more common than many know. If you have purchased a property at the county foreclosure auction and the foreclosure was brought forward to satisfy a lien then the mortgage would be superior to that of the lien which foreclosed, if the mortgage was recorded prior to that of the lien.

2. Sell the property and pay off the mortgage or if mortgage exceeds value lender may agree to a short sale

3. If you do not work out a repayment/satisfaction with the mortgage holders they will foreclose on the property. Live in or rent out the property until the bank forecloses, which in the current environment could take up to a year. By renting the property out, on a month by month basis, you will be able to recapture some of your funds and you will have prior notice of the auction date so your renters can be out before that occurs.

An avenue to follow
If the $40,000 was your winning bid and more than the opening bid, the overage from the auction would be allocated to those parties having a superior interest in the property. They have 90 days to claim it. So if the opening bid was $10,000 and there were no other mortgages, encumbrance holders, then the $30,000 in excess could be claimed by the mortgage holder. The question is, have they done it? It would reduce the amount that you would have to pay, out of pocket, to satisfy the mortgage.

First step would be to pull the foreclosure file at the court house, take a look at the owners and encumbrance report and decide who else would be paid form overage. If bank is to receive any overage, contact them and make them aware of the overage available and offer to pay a percentage of remainder for the release of the mortgage. If there are numerous mortgages to contend with, getting releases on multiples would be a huge undertaking as each would receive a diminishing amount based on recording dates of the mortgages. Recording dates would determine order of superiority of the encumbrances.

FYI-I have numerous pages in the tax deed and foreclosure sections of my site which are devoted to explaining superior and inferior liens and give examples. Search my site for term "Superior" and a list of the pages will be returned.

Hope this helps

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