The truth about HOA foreclosure and how you can expertly navigate it.

If you are in an HOA, can they foreclose on you if you don't pay your dues? The answer to that question is that it depends. Sometimes, the HOA can't foreclose on you if you're not making the payment, but they can absolutely place a lien on your property. Other times, depending on how the covenants are written, the HOA can foreclose on you sometimes in advance of the mortgage as well.

We've had situations with clients in the past, and even currently, who were facing losing their homes through the HOA, and we were able to step in and help them through the process. They were able to re-modify their mortgage because they were in a financial bind, but when they tried to do it with the HOA, they wouldn't let them and they continued with the foreclosure. The good news is we were able to help them avoid foreclosure, maintain some equity in their home, and guide them toward the next steps in their lives. If they had gone through the HOA process and actually been foreclosed on, they wouldn't even be able to get a rental due to the impact on their credit.

“The key is to reach out ahead of time.”

Also, we're currently dealing with another situation where there's a lot of equity in this home. There were multiple issues between HOA changes and property management turnover over the course of two years, during which the company misapplied the owner's payments. As a result, she received a notice that her property was up for Sheriff Sale, and we were able to assist her with that. They were ready to proceed with a Sheriff Sale without properly assessing the situation, but she sought our help, and we've been assisting her in resolving it.

So don't assume your hands are tied if they're indicating that foreclosure is the only option. Reach out and ask us questions. We have experience in helping people navigate these financial situations in the past, and we're here to assist you too.

The key is to reach out ahead of time. If you or someone you know is struggling and thinks foreclosure is the only way out, there's often a good solution if we act early. Whether it's related to the HOA, mortgage company, tax liens, or any other situation, getting ahead of it can make a difference. In our next blog, we'll explain how if you're in a position to buy a foreclosed home, there are opportunities in this market and the future market as well.

If you're considering investing in distressed assets, stay tuned for our next update. Also, don’t hesitate to call or email us for any of your real estate needs. We’re always happy to help.