When someone loses their home, most times it is because the bank foreclosed. Few people know your HOA also has the power to foreclose on your house if you do not pay their fees. How is this possible?
Why Can The HOA foreclose on your home?
Neighborhood HOA’s have two main functions:
- to collect assessments and fees, and
- to enforce the rules of the community.
When the developer who set planned and developed the neighborhood he created an HOA with the homeowner having no choice other than being its members. The HOA rules are then set forth in what is called the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Every homeowner needs to follow the rules in the CC&Rs or suffer the consequences most often being additional fees(commonly referred to as “assessments”. Miss your HOA payments or any additional fees they issue and that will quickly attach a lien to your property.
How HOA Liens Affect You
The common belief is that if you have a mortgage an HOA can not foreclose on you. That is inaccurate. The HOA can foreclose either through judicial foreclosure or nonjudicial foreclosure, depending on state law and the terms in the CC&Rs. After an HOA foreclosure, you are still on the hook for the mortgage payments. There is zero obligation from the HOA to the mortgage lender since they did not sign the promissory note, the homeowner did. They have 2 options after foreclosing:
- Pay your monthly mortgage payment to prevent foreclosure. (probably won’t happen)
- Allow for the bank to foreclose. This works in the HOAs favor since it will eventually result in a homeowner who they can collect their monthly assessments from.
What If I Can’t Pay My HOA Dues?
If you can not pay your HOA dues in Texas we have a solution. We help many homeowners who have fallen behind on their HOA payments by purchasing their house with a fair cash offer. Good Neighbor Home Buyers buys housed in whatever condition and helps homeowners avoid foreclosure from their HOAs. Contact us by filling out the form below or calling a licensed agent at 281-713-3255. We will be glad to discuss your options!