Foreclosure

questions & answers

Question: What right does the HOA have for collecting on a personal debt when the home is foreclosed on and their is a lien against the property from the HOA Association

Answer: The past due HOA dues are considered personal debt. the lien against the property is a way to acquire a security interest in the property if the debt is not paid. A debt is a promise to pay; a lien is a security interest in some real or personal property,which can be liquidated to satisfy the debt. When a lender forecloses,all junior liens against the property are dismissed. In other words, the junior lien holders (which usually includes an HOA)can no longer sell your home to collect their debts. However,the debt still stands. The HOA may collect on the debt, they can attempt to do so themselves, hire a collection agency, or take you to court. Consult an attorney concerning your specific situation.