How can homeowners association foreclose

Easier Than You Think. She says there's a surefire way to prevent foreclosure. If you fall behind, try to set up a payment plan with the HOA board," says Endres.

It's always best to communicate and find a solution if you're unable to pay. Plus, resolving the situation sooner versus later will save you money. Got a beef with your HOA? Also, "consider running for a spot on the HOA board. Then, try making the changes you desire," suggests Markel. If a lien is filed against you, review it carefully. Consult a lawyer for legal advice.

If the action is not filed within 90 days, the HOA lien is void," Pelaez explains. Note that, at any time before the entry of a foreclosure judgment, you have an opportunity to prevent HOA foreclosure. That's because it means the debt will be paid off. Once you file a qualifying offer with the court, it postpones the foreclosure action for the period of time stated in the qualifying offer. That gives you time to submit payment," Pelaez notes. If the HOA foreclosure is a done deal, you could try buying back your home.

In order to initiate foreclosure proceedings, the HOA must wait for the assessment to be delinquent for 90 days before initiating these proceedings. Once the process starts, the foreclosure will usually proceed as a nonjudicial foreclosure , which occurs without court supervision.

A judicial foreclosure is initiated through a lawsuit and involves much more oversight from the court. If the court does not oversee the foreclosure process, the property owner is still entitled to the procedural rights and remedies associated with foreclosures. Specifically, property owners are entitled to proper notice and hearing of the foreclosure, have the right to remedy the delinquency before the foreclosure window closes, and can bring any issues of bad faith that may arise throughout the foreclosure process to the attention of the court.

Though an HOA has every legal right to engage in this conduct, property owners can take affirmative steps to stop this from happening. HOA foreclosures can be a frightening experience, however, there are affirmative steps property owners can take once this process has begun.

First, property owners should make every effort to work with their HOA to resolve the issue without litigation.

However, if legal proceedings are the only way forward, property owners can also raise defenses against the foreclosure or bring claims against the HOA for its conduct in the debt collection process. Though bringing a claim against the HOA will not directly stop the foreclosure, it could be the leverage property owners need to reach a solution with the HOA. First, if falling behind on your assessments, property owners should talk to the HOA executive board about payment options.

The HOA is comprised of neighbors, and they may be willing to work with property owners in creating a repayment plan or removing some late fees through negotiation. Additionally, if the day window is not long enough to come up with the funds, property owners should try to repay the debt before the foreclosure process begins. If possible, property owners should pay off the assessments before attorneys get involved. If this is the case, a property owner may have the ability to contest the foreclosure if the HOA failed to comply with the procedural requirements outlined above.

Specifically, the manner in which the HOA went about calculating the assessments, notifying the property owner of the debt, filing the claim of lien, or initiating the foreclosure could all provide grounds for contesting the foreclosure. If the HOA is attempting to collect assessments that do not meet this threshold, a property owner can petition the court to stop the foreclosure process.

Property owners may also be able to contest a foreclosure if the HOA has violated its Declaration of Covenants, Conditions, and Restrictions , Articles of Incorporation , or By-laws in the foreclosure process. Any creditor with a lien on your home has the legal right to foreclose. So, if the HOA has a lien on your property, it may decide to initiate a foreclosure—even if you're current on your mortgage payments.

The foreclosure will be judicial or nonjudicial , depending on the law in your state and the circumstances. To start a judicial foreclosure, the HOA will file a lawsuit against you in state court. For a nonjudicial foreclosure, the lender must follow specific procedures as set out by state law. HOA liens are often junior in priority to a first mortgage.

The HOA doesn't have to consider the fact that you're current on your mortgage payments when it decides whether to start a foreclosure. If you're current on your mortgage payments, it would be pretty unwise to lose your home to an HOA foreclosure and hurt your credit because of delinquent HOA dues. In other cases, the HOA might begin a foreclosure because its lien has super-lien status. Some states give HOA liens priority over a first mortgage for a specific number of months worth of delinquent assessments.

If the HOA forecloses a super lien, it might depending on state law eliminate the mortgage. For this reason, the mortgage lender will usually pay off the super-lien amount to stop the foreclosure and keep its mortgage lien in place. So, if you live in a super-lien state, the HOA may initiate a foreclosure because it knows that if you don't pay, the first-mortgage lender probably will.

Ultimately, if you're current on your mortgage but behind in your HOA dues, and your goal is to keep your home, you should pay the HOA dues, or else you might lose your property to a foreclosure. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.