QUESTION

When a HOA forces a sell on a home with a mortgage who owns the mortgage?

Asked on Apr 16th, 2013 on Real Estate - Florida
More details to this question:
When a HOA forces a homeowner to sell their home for the collection of unpaid assessments and their is a current mortgage who owns that mortgage? Is the HOA required to contact the mortgage holder (bank) and advise them of the sell? What if the mortgage refuses to accept the sell from the HOA; what happens to the house and the homeowner?
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1 ANSWER

Real Estate Attorney serving West Palm Beach, FL at Ward Damon
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When a HOA forces a homeowner to sell their home for the collection of unpaid assessments and their is a current mortgage who owns that mortgage?   Simply put, a 1st mortgage has priority over the Association assessments, and the Association foreclosure does not, in any way, affect the lien of the mortgage.  The ownership is also unaffected by the HOA's foreclosure. Is the HOA required to contact the mortgage holder (bank) and advise them of the sell?  They do not have a legal obligation, but the information is public record. What if the mortgage refuses to accept the sell from the HOA; what happens to the house and the homeowner?  The mortgage holder has no legal obligation to approve a short sale by the HOA, but if the HOA is paying off the lowan in full, the mortgage holder cannot refuse to accept same.  However, the mortgage holder cannot stop an HOA sale, and such sale does not affect the mortgage holder's lien (which can still be foreclosed).  
Answered on Apr 16th, 2013 at 4:26 PM

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