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  1. #1

    Default Condo In Foreclosure With HOA Debt, in California

    I am in CA and own a condo that is in foreclosure.
    Here is my background story: my home has been on the market for 9 months and fallen out of escrow twice during that time. I have a 1st loan in the amount of $190K and a 2nd for $15K. The 2nd lender filed a NOD 90 days ago and I have a NOS date for 24 days from now. Since then, I am also 60 days deliquent on my 1st loan. The 2nd lender has agreed to postpone sale if I enter into escrow before the NOS date (he is just protecting his debt recovery). Another condo is REO going for $275K-so I have some equity in my place! However, I owe ~$40K in back HOA dues/assesments (3 big assesments!).
    My question is: If my condo doesn't sell before the foreclosure sale date, then does the HOA debt convey with the condo and be automatically paid-off with auction sales profits? Also, if there is any money left after lien-holders are paid will I see any of it?

  2. #2

    Default Re: Condo In Foreclosure With HOA Debt, in California

    The HOA Board must go through due process in order to put a lien against the property for the HOA assessments (explained in CCRs). When it sells, the lien will be satisfied, but I don't know in what order, if there are not sufficient proceeds to pay the lenders (1st and 2nd TD). As to your second quesion, I think the property belongs to the lenders by the time the auction sale occurs - not to you. So if there are any "profits", it would go to them. Also, there would likely be attorney's fees to be satisfied as a part of the HOA lien process.

  3. #3
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    Default Re: Condo In Foreclosure With HOA Debt, in California

    Any surplus from a foreclosure sale must be paid to the next most junior lienholder(s) in order of their priority and, if none or if they are all paid from the surplus, any remainder goes to the homeowner.

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