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Old Today, 11:14 AM
 
209 posts, read 139,109 times
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Quote:
Originally Posted by ddrhazy View Post
You think some lost paperwork is going to stop a bank foreclosing on a delinquent mortgage indefinitely? Those properties might've been the last ones to get repossessed but a bank is not going to walk away from a 6 figure asset because of paperwork.
I work for a national law firm who has an office here in Las Vegas and all we do is litigate HOA foreclosure lawsuits. Over the past few years we have had around 2000 lawsuits and I can only imagine how many cases other law firms in town have. My firm represents the banks and I can tell you with certainty, the bank will do everything in its power to take control of the property. These cases have been going on for years and there are still thousands of cases pending.

Most people don't realize that Nevada law allows the community HOA to foreclose and take over ownership of a property if the occupant/owner is delinquent on their HOA payments. Trust me, if the homeowner stops paying the mortgage they stop paying the HOA bill. At that point it's a race between the HOA and the bank to see who can take over ownership of the property first. Once the banks are made aware that the HOA is attempting to foreclose they will step in and attempt to pay the outstanding HOA bill so that the HOA cannot take control, and I've seen countless times where the HOA rejects the payment! The HOA will then take the home and sell it at auction for NOTHING..I'm talking like $10,000. They sell them to local investment companies here in town who buy up all the HOA foreclosed properties and then rent them out and/or sell them. Home foreclosure is big business in this town.
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Old Today, 12:21 PM
 
Location: Las Vegas
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Wow, great to hear it from someone on the inside. Good information to bear in mind. ^
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Old Today, 12:47 PM
 
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The lien from the mortgage is still on the title even if an HOA forecloses on a property. Future buyers will not have a clear title until the bank is also paid the remainder of the mortgage.

There may be some people who have figured out how to buy a property at auction and negotiate with a bank a price lower than what the mortgage remaining was, though I never did it and I'd be hesitant to suggest others to do it. When houses were being auctioned off in large numbers several years back, it behooved you to research all the liens that were remaining on a particular property to see if a purchase would pencil out financially.

Eventually everyone gets their money.
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Old Today, 03:13 PM
 
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There was a NV supreme court case a few years ago that asserted a HOA foreclosure would indeed wipe out a mortgage. That has been litigated and it looks like it recently may have been reversed.

Plenty of HOA foreclosure purchasers are still holding title. Take a look at 4 Singing Dove Ave in Henderson NV. A 4000sf newer home in a nice area of Henderson, purchased at HOA foreclosure auction by Red Lizard Productions for $9,000 in 2012. Still owned today, seven years later, by the same entity.

Quote:
Originally Posted by ddrhazy View Post
The lien from the mortgage is still on the title even if an HOA forecloses on a property. Future buyers will not have a clear title until the bank is also paid the remainder of the mortgage.

There may be some people who have figured out how to buy a property at auction and negotiate with a bank a price lower than what the mortgage remaining was, though I never did it and I'd be hesitant to suggest others to do it. When houses were being auctioned off in large numbers several years back, it behooved you to research all the liens that were remaining on a particular property to see if a purchase would pencil out financially.

Eventually everyone gets their money.
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Old Today, 03:22 PM
 
11,352 posts, read 4,040,531 times
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Quote:
Originally Posted by ddrhazy View Post
The lien from the mortgage is still on the title even if an HOA forecloses on a property. Future buyers will not have a clear title until the bank is also paid the remainder of the mortgage.

There may be some people who have figured out how to buy a property at auction and negotiate with a bank a price lower than what the mortgage remaining was, though I never did it and I'd be hesitant to suggest others to do it. When houses were being auctioned off in large numbers several years back, it behooved you to research all the liens that were remaining on a particular property to see if a purchase would pencil out financially.

Eventually everyone gets their money.
Much more complicated than that. At present it appears mortgages sold to the GSEs cannot be overridden. All of the others however can be. And if proper procedures and notifications are used the mortgage holder has no defense. One would think by now the lenders know and can easily prevent the HOA foreclosure by simply offering to pay the super priority portion of the HOA claim.

For those who are interested there is a reasonable blog that follows most of the major decisions at...

https://www.financialservicesperspec...riority-liens/

And note that none of this has any impact on tax sales.
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Old Today, 04:48 PM
 
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In all honesty I'm surprised current loans don't include the HOA fees, sewer and trash within the price of mortgage similar to how PMI is priced into FHA loans. With the amount of corruption by so many HOAs trying to take advantage of the housing crash, it would be wiser to do so to prevent such abuse in the future.
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Old Today, 05:07 PM
 
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Quote:
Originally Posted by ddrhazy View Post
In all honesty I'm surprised current loans don't include the HOA fees, sewer and trash within the price of mortgage similar to how PMI is priced into FHA loans. With the amount of corruption by so many HOAs trying to take advantage of the housing crash, it would be wiser to do so to prevent such abuse in the future.
The HOAs don't generally make out big on these deals. Best they get is the money owed. The big winners are the guys who pick up the properties at 10 or 15% of market value. in general any hanky pank between the HOA and the buyer would be grounds to reverse the HOA foreclosure.

In fact the loan originators could easily build the dangerous payments into the loan payment. But that can get tricky too. Does a mortgage holder want to make those payments on a property that goes under water in a recession?
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Old Today, 05:40 PM
 
2,172 posts, read 2,245,472 times
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Quote:
Originally Posted by lvmensch View Post
The HOAs don't generally make out big on these deals. Best they get is the money owed. The big winners are the guys who pick up the properties at 10 or 15% of market value. in general any hanky pank between the HOA and the buyer would be grounds to reverse the HOA foreclosure.
I purchased a property in 2008 and near the end of the transaction, the bank told me that I had to pay an extra $2500 because of the HOA's lien. It seemed insane to me that a monthly HOA fee of $15/month could build up to that much in just 1 year. The HOAs are definitely padding their accounts with these liens in excess of what is legitimately owned on the account. That's why the cap was put at a certain amount of months.

Quote:
Originally Posted by lvmensch View Post
In fact the loan originators could easily build the dangerous payments into the loan payment. But that can get tricky too. Does a mortgage holder want to make those payments on a property that goes under water in a recession?
Well, the "dangerous payment" is priced in via your credit score. Lower score = higher payment. But when the HOA super lien is a type of zero sum game, it would behoove all the banks to not allow these opportunists to put a lien above their own.

Anyhow, I thought it was a good idea. But not all good ideas materialize.
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Old Today, 09:35 PM
 
209 posts, read 139,109 times
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Quote:
Originally Posted by WestieJeff View Post
There was a NV supreme court case a few years ago that asserted a HOA foreclosure would indeed wipe out a mortgage. That has been litigated and it looks like it recently may have been reversed.

Plenty of HOA foreclosure purchasers are still holding title. Take a look at 4 Singing Dove Ave in Henderson NV. A 4000sf newer home in a nice area of Henderson, purchased at HOA foreclosure auction by Red Lizard Productions for $9,000 in 2012. Still owned today, seven years later, by the same entity.
This is correct. The Bourne Valley case in the appellate court has established how HOA foreclosures will move forward from now on. The lawsuits will always continue but the law is more clear so judgments or settlements will happen more quickly. It's still crazy to see how in bed the HOAs and investments companies in town are. The state court system also sides with the HOA while the federal court level thinks the state law is ridiculous. The HOA had some legal pull in Nevada, and the people really running the HOA show are the suits way above your neighbor on the board.

https://www.tysonmendes.com/nevada-s...d-due-process/
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