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FLRealEstateAnswer, Attorney
Category: FL Real Estate
Satisfied Customers: 27198
Experience:  Experience handling landlord/tenant issues, mortgage foreclosures, eviction, purchase and sale agreements
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A party foreclosing on a real property (a condo HOA) has a

Customer Question

A party foreclosing on a real property (a condo HOA) has a judgment for 24k. If at the bidding, someone offers more, can they keep the difference?
Submitted: 2 years ago.
Category: FL Real Estate
Expert:  FLRealEstateAnswer replied 2 years ago.
Just to be clear, the HOA is foreclosing as a result of the owner not paying their dues?
Customer: replied 2 years ago.
Expert:  FLRealEstateAnswer replied 2 years ago.
Thank you for the additional information. No, the HOA could not keep the difference. The HOA would be entitled to their 24k judgment. The owner, who is being foreclosed on, would get any surplus, once the mortgage is paid off and the HOA is paid and the 3rd party purchaser would take the property and any equity contained within.
Customer: replied 2 years ago.
In this case, there are two foreclosure processes, the HOA with sale date this month and the bank with no sale date yet. If there is a surplus at the HOA sale, who would get it, the owner or the bank? Will it make any difference on the answer to my question, if bank had Final Summary Judgment or not?
Expert:  FLRealEstateAnswer replied 2 years ago.
It is better if I share with you an overview of the process, which will make it clearer about what happens, when the HOA forecloses. When a property owner becomes delinquent on fees, a lien automatically becomes attached to the homeowner property as of the date the assessment became due. The HOA records a lien at the county recorders’ office, which provides a public notice that the lien exists. It may include:Late chargesPenaltiesInterestReasonable costs of collecting the debt-- attorneys’ fees and administrative costsThe lien puts a “cloud” the title to the property, which obstructs the homeowner’s ability to sell or refinance. The HOA has 90-days in which to file foreclosure action to enforce the line, but cannot file the paperwork until 45 days after the owner has been provided notice of the association’s intent to foreclose and collect the unpaid amount. Failure to file the lawsuit means the lien becomes void after 90-days. The HOA must file a lawsuit to obtain a judgment from the court. The HOA can foreclose on the property and take title subject to the right of the first mortgagee.The property will continue to have the encumbrance from the lien of the first mortgage. The HOA will have to take additional action to work with the lender to eliminate the mortgage on the property. However, the HOA can lease the unit at market value to recover the costs of the unpaid assessments. Once the HOA officially forecloses on its lien for unpaid assessments, the borrower remains responsible for making the mortgage payments. The first mortgage lien and any tax lien hold a superior position to the HOA’s lien. The HOA also takes on the responsibility for or taxes, utilities, insurance and maintenance. The HOA must secure the unit and ensure the systems are functioning properly. As such, while the property is sold, it is still owned, so it is not as if the HOA forecloses and gets their 24k, the bank gets 0 and the 3rd party purchaser gets the property with tons of equity in it.
Customer: replied 2 years ago.
Thank you, ***** ***** familiar with the process as I do short sales. I only need to know who gets the surplus, as specifically stated in my last question. Please read my last question and let me know
Expert:  FLRealEstateAnswer replied 2 years ago.
When the property is actually sold, satisfying the mortgage, it would go to the borrower, since he still remains on the note. As you know, the HOA takes the property over but the borrower/previous owner is still on the note and it remains and secures the property. The bank is entitled to their money so it would need to be sold and once that happens, the surplus would go to the previous owner.
Customer: replied 2 years ago.
Sorry, but still unclear (why did you mention "satisfying mortgage, when this is an HOA sale), so I will state the scenario and repeat question. Both HOA and bank are foreclosing and have case numbers and liens on the property. Bank has no sale date and I think they don't have a final summary judgment yet (not sure). Bank is responsible for taxes. HOA, who is responsible for insurance and which fees are built into the judgment, has a sale date this month. At auction a third party pays $50k and gets the house. As you said, HOA is entitled only to 24k. Who gets the $26k? Owner or Bank?
Expert:  FLRealEstateAnswer replied 2 years ago.
Who started the foreclosure first? Was it the HOA ?
Customer: replied 2 years ago.
Expert:  FLRealEstateAnswer replied 2 years ago.
If the bank is foreclosing and the HOA was named, then once the property is foreclosed on, the HOA would be entitled to their statutory amount under Florida Statute(###) ###-#### ***** I have provided a link for below.
If there is equity in the home, then the HOA will likely want to assert their right to recover all that is owed, prior to the owner getting any surplus from the sale.
Customer: replied 2 years ago.
You are not reading my questions or the question history. Therefore you are not answering my very specific questions. The fair grading to you for the time lost is Bad, but I would rather have you release the question now, so I can get someone else to answer me. Please release the question. Thank you
Expert:  FLRealEstateAnswer replied 2 years ago.
Not a problem.

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