HOA foreclosure

perhaps someone can  answer this for me.

Condo association forecloses on unit  and obtains deed in their name since the person walked away from the unit. The unit was foreclosed on before the bank had any chance to do so which made the condo association the first lien holder through the sheriffs sale. Two opinions from the same bank but different people in the bank state 2 different conclusions.

One says the unit is ours and the other states they will not foreclose on the unit. Since the bank never foreclosed on the orininator loan and the HOA obtained it through a sherrifs sale who legally owns the unit ? can the bank force the HOA to pay the mortgage or did the property actuallt transfer to the HOA with no liabilty since theyare the first holder. can the original mortgage be removed from the property since the hoa never borrowed on the  original loan?

Michael Donovan:

perhaps someone can  answer this for me.

 

You did not say which State the property is located in and each State has different laws governing foreclosures it is impossible to fully answer your question.  I would suggest you contact a Real Estate Attorney.

However I can answer the first question regarding the priority of liens.  Just because the Condo Association foreclosed on the property and placed a lien for the amount owed does not make them the primary 1st lien holder.  Liens on a residential property are prioritized by the date in which it was recorded in the County of origin records.  The lien that was recorded first becomes the 1st lien holder therefore the Lender will still maintain the 1st position unless they agreed to subordinate the 1st position or by order of the Court the 1st lien holder is subordinated to the 2nd position.

When the property is sold first any Government taxes owed are paid then the 1st lien holder and if there is anything left the 2nd lien holder will get paid.  If there is not enough money left over to pay the 2nd lien holder and it is allowed in your State then the 2nd lien holder could file a judgement against the owner of the property.

I used to manage a large HOA and I had the unfortunate experience of causing liens to be placed on the homes of homeowners who fell behind in their payments. 

Mark is correct.  The mortgage holder still has priority.  What our attorney told me was that after we (HOA) foreclose, we just wait for the bank to take the property back.  Then the bank starts paying the HOA fees.

Jen:

Mark is correct.  The mortgage holder still has priority.  What our attorney told me was that after we (HOA) foreclose, we just wait for the bank to take the property back.  Then the bank starts paying the HOA fees.

I've read that banks are refusing to pay the HOA dues...in particular, in Florida...I believe there's a big suit against Wells for this...