Phone: (407) 497-
The Orlando Foreclosure Attorney
133 W Robinson St
Orlando, Florida 32801
Foreclosure Attorney C.W. Franklin
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133 W Robinson St. Orlando FL, 32801
All initial consultations are completely free and we can contact the same or following business day.
If the Home Owners Association says you owe them money, you better pay them. They can foreclose on your home even if you are current with your mortgage. What is worse is they can potentially sell your home for much less than what it is worth.
If you move into a property that has a Home Owners Association, you most likely agreed to pay monthly or yearly HOA dues. Condos and town homes typically have higher HOA fees because the HOA is more involved with the community. This money you pay them is used to keep the community up to the standard it was when you moved in. Landscaping, security, maintaining a clubhouse, etc.
The Danger of an HOA Foreclosure
When the HOA tries to foreclose on a home their goal is to collect payment for the money you owe them as quickly as possible. They cannot make a profit when they auction off your home because they are only eligible to collect what they are owed. This means there is no incentive for them to try very hard to sell it at auction.
For example let's say you live in a home that is worth $100,000. You have the home halfway paid off, you are still current on your mortgage, and you only owe the lender $50,000. Problem is, you have not kept up with your Home Owners Association fees which ran you $2500 per year. Maybe because you are not informed or you just don’t feel like you should pay it but it goes unpaid for 2 years.The amount you owe adds up to $5000.00 but the HOA needs to hire an expensive attorney to perform the home foreclosure.
Now your HOA claims you owe $10,000 in past due HOA fees, attorneys fees, and other legal fees. The goal of the HOA will be to collect $10,000. They could care less about what the home is worth or what it sells for because they cannot profit any more than what is owed to them from the sale of the home. They are legally supposed to auction the property for the current market value but this does not always happen.
HOA Foreclosure Auctions can Sell Homes for Drastically Less than What they are Worth
(Why this can Devastate the Home owner)
Ideally, the home will sell for the current market value of $100,000. The bank will get their $50,000, the HOA will get their $10,000 and you will be still left with $40,000 to pocket.
There is a chance that of the home could sell for only $10,000 (the amount the was HOA is owed). If this happens, any equity you had in the home will be gone and you are left owing the original lender $50,000 for a property you no longer own.
The $50,000 that you had paid toward the home is gone.
You still owe the lender $40,000 for a home you don’t even own anymore.
All because you refused to pay the $5,000 owed in HOA fees.
What happens to the lender if this happens? They still have a superior lien on the property so whoever purchases it will be still be forced to deal with that lien. If the original loan is not paid for, the lender will eventually foreclose on the home to get their investment back. Yes, the home can be foreclosed on twice: Once by the HOA and again by the original lender with the lien on the home.
Someone else can pick up the lost equity in the home by selling the home newly purchased home at current market value ($100,000). The original lender will get their $50,000 and the person who bought the home for $10,000 can still profit $40,000. It is a gamble for the investor who buys the HOA foreclosure because the original lender could still foreclose, auction the home for what is owed to them and the investor would be left with nothing.
Consults are free, even if you are asking general foreclosure questions.