When Can a Florida Homeowner’s Association Foreclose on Your Home?

The economy remains on shaky ground and more homeowner’s association are still aggressively foreclosing on Florida homes. An association may initiate a Florida foreclosure action if dues are not promptly paid.

For example, two families are stuck in a bind after a foreclosure sale purchase of an Orlando home. The initial owners of the house are packing and ready to move after their homeowner’s association foreclosed on their home for missed dues.

A third party purchased the home through an auction on the Orange County Clerk’s foreclosure website. The new owners bid $16,000 on the house and bought the home through the auction, however they were unaware that they would also be liable for the previous owner’s $200,000 mortgage.

The new owners must also evict the current occupants. The family has not yet moved and they hope to stay in the house by renting it from the new owners.

Some of those taking part in the online foreclosure auctions think they are getting a steal until they do more research. In many cases, they find a bank mortgage and they are on the hook to pay back an underwater mortgage.

One Way to Avoid HOA Foreclosure in the First Place

This story is a cautionary tale. Homeowners who have fallen behind on HOA dues have options. An Orlando foreclosure relief attorney can outline available forms of relief.

One way to stay in your home is a bankruptcy. If your property is underwater, or you owe more on your mortgage than the value of your home, a Chapter 13 bankruptcy may be one way to stop the foreclosure and strip the association arrears. Those unpaid dues become a lien against your property. However, on a home with an underwater mortgage a lien may be considered unsecured debt.

As long as associations continue rapid foreclosures on unpaid dues, it is important to seek counsel. There are ways to avoid a possible foreclosure and stay in your home.

Source: WFTV.com, “2 families now suffering after HOA foreclosure in Orlando,” June 7, 2012.