I have had a Claim of Lien placed on my condo for late maintenance payments ($865). I cannot pay it by the deadline.

It is important that you get some comprehensive legal advice about your rights from someone like a short sale attorney or other financial counselor. You have a complicated financial situation that you need information on so that you can make a proper decision. Basically, the condominium Association has the right to file a lien and then foreclose it in the same way that the lender can foreclose their mortgage on a default. The difference is that if the condominium Association goes to a foreclosure sale, it will be sold subject to the first mortgage amount. Sometimes, associations adopt a strategy of commencing a foreclosure against the unit owner in order to force some action on the part of the first mortgage holder. If they can get the first mortgage holder to take over the property, then they can look to have Association assessments paid by the lender