Homeowners Association’s (HOA‘s) precedence in claims on your property over the bank

Question: We recently got a loan modification on the mortgage on our primary residence with very attractive terms. We have two HOA‘s and we communicated to them that we would catch up on our dues when the loan modification became permanent. One of the HOA‘s put us in collection. What will happen if we stop paying anything to the HOA? Will they foreclose and get someone to pay the bank the amount due on the note. What risks do we take if we don’t pay one of the HOA‘s? Can the HOA foreclose and ignore the bank and the money owed to the bank? Who pays the money to the bank?

Response: You are better off not messing with the HOA. HOA can put your home/condo for sale, recover its fees, pay the rest to the bank. Oftentimes, the bank will itself pay the amount due to avoid any type of lien sale and then charge you for it. HOA fees are not even extinguished when you file for bankruptcy. So, they will not be extinguished in foreclosure. If you want to save your property, you should make an arrangement with HOA to catch up on arrears.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.

Copyright © 2015 Law Office of Svetlana Kaplun, P.C.

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