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I have a condo that was foreclosed on IN NC. MUST KNOW NC

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LAW. Foreclosure happened April 13...
I have a condo that was foreclosed on IN NC. MUST KNOW NC LAW. Foreclosure happened April 13. Bank took the property back. In the meantime, there is a lawsuit outstanding for back HOA dues that was served to my ex-husband but has not been served on me. The HOA is trying to get a judgement of 20k plus. It was just served in February of this year. I looked it up and apparently NC is a "super lien" state. But the loan servicing company ehas told me that any hoa lien would have been wiped out by the foreclosure. Then they were not sure and just said, if we have to pay a lien we will. They told me to call the hoa. I have been advised to avoid service of the lawsuit so I don't want to call them. I live in another state. For further information. Can you tell me if the bank will have to pay any back dues?
Submitted: 1 year ago.Category: Real Estate Law
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Answered in 1 minute by:
6/1/2016
Real Estate Lawyer: Barrister, Lawyer replied 1 year ago
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 38,724
Experience: 17 years real estate, Realtor. Landlord 26 years
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Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.

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Real Estate Lawyer: Barrister, Lawyer replied 1 year ago

Was the house actually sold at a foreclosure auction?

.

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Customer reply replied 1 year ago
The bank took the property back. No one bid on it or purchased it.
Customer reply replied 1 year ago
Please let me know if you have any experience in this field.
Real Estate Lawyer: Barrister, Lawyer replied 1 year ago

Just a couple minutes while I type out a thorough response..

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Real Estate Lawyer: Barrister, Lawyer replied 1 year ago

Ok, if the bank now owns the property, then that means that they bought it at a foreclosure auction. They don't just "take it back" unless you executed a "deed in lieu of foreclosure" (DIL) where you agreed to transfer it back to them.

,

So if you did not execute a DIL, then there was a public foreclosure sale, normally at the courthouse, and the bank was the high bidder.

.

So when there is a foreclosure by the lender, it extinguishes any liens on the property that were placed on it, including the mortgage and any other liens. The priority of the liens determines who gets paid first. Normally it is the mortgage and then any lower priority liens. North Carolina is not a Super Lien State. In a Super Lien State the HOA’s lien jumps ahead of the mortgage in a foreclosure so they are always paid in full. In North Carolina the HOA lien falls in line behind the mortgages/deeds of trust and always gets extinguished in the foreclosure.

.

So if there is not enough money to pay off the mortgage and the HOA lien, then the HOA lien remains unpaid. But just because it was extinguished in the foreclosure sale doesn't mean it was "forgiven" or is unenforceable against the former owners. HOA liens are both liens against the property as well as personal debts owed by the owners. So if the foreclosure sale doesn't pay it off, then the HOA can still sue the former owner personally for the debt.

.

But with regard to you being served, as long as you avoid service, they can't sue you personally for the debt.

.

And no, the bank isn't obligated to pay the debt if there was a foreclosure sale since it was extinguished as a lien on the property. But you and ex are still personally liable for the debt if they can serve you with a summons to come to court within the 3 year statute of limitations for breach of contract.

.

.

thanks

Barrister

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