HOA has a judgment of foreclosure!!! SCARED!

[ursula]

So, like many on this site, we got really behind on a lot of our finances when our small retail business took a dive. And we let our HOA get in the rear. I figured no big deal, I'll catch them up when i can.....BIG mistake. Before I knew it I was not only behind, but now they were filing for a lien against the house, court costs, lawyers fees and everything else. that $35 a month fee quickly turned into $3000! In the meantime we are getting all our paperwork ready with our attorney to file chapter7 on Friday. And she points out that not only did the HOA do a lien, but they also have a judgment of foreclosure!!! So can they really come here and just evict us? We planned on letting the house go into the chapter7, and figured we have a good 7-8 months of saving before we would have to find a rental....but now I am really scared! Will filing the chapter 7 stop any evictions? Anyone have any advice or first hand knowledge of what I am up against. I have tried to call the HOA's attorney, but the receptionist had no clue, and I have yet to receive a call back.

[dingdong]

Filing BK will halt the foreclosure process. The lender, or anyone will have to file a Motion for Relief from stay to be able to move forward with the foreclosure process once BK is filed.


In California, the foreclosure process is usually non judicial, they go the Trustee Sale route.

The lien placed by the HOA looks like they are going the judicial foreclosure way probably since they are not a part of the original note ( Trust Deed), however since they are junior to the lien to the lender, they probably wouldn't get anything after the foreclosure if you are upside down.

Once you default on your mortgage, the lender has to send you a NOD ( Notice of Default), then after 90 days in default, they post a Notice of Trustee Sale on your door, which gives you a 21 day window until the TS.

I beleive most BK attorneys wait until just before the TS date to file BK to keep owners in their homes a bit longer.

The judicial foreclosure will be halted by the BK, and they will also have to get relief from stay to move forward.

Any debts, HOA, mortgages/deficiencies will either be wiped out in BK unless you reaffirm your mortgage to keep the home.

[dingdong]

You said there is a judgement foreclosure?

Did you get served by the HOA?

Or is there possibly a judicial foreclosure action pending against you, re the home?

Judicial foreclosures can take quite a while, they are calendered on a busy court docket and sometimes can take a year or more.

Do they already have a judgement against you?

How long have you been in arrears on your HOA fees?

[ursula]

yes, they already have the judicial judgment, filed in January. I was served and was supposed to appear in court in December, but I was loosing my small retail business and was working 7 days a week to try to keep it afloat. And the court date accidently slipped by me. I was only a few months in the rear, then they filed the lien, which incurred court costs and lawyers fees and it quickly soared out of reach. Now I am almost 2 years in the rear. I file tomorrow, and hopefully that saves me from eviction. I barely stopped paying my mortgage last month, so I dont see them starting foreclosure for awhile, especially in California's economic state....

[dingdong]

Wow, that sucks!

I am sorry to hear that.

I find it hard to believe that a BK judge would let a HOA be granted relief to foreclose for such a small amount ( considering the value of the home). Especially since they probably wouldn't get anything after the lender forecloses, but I am not sure.

Seems that the HOA's lien is junior to the trust deed. I don't know about them beating the lender to the foreclosure and how that plays out.


I have no personal experience with this issue ( HOA foreclosure)

You probably have 6-8 months until the lender actually kicks you out if you file BK.

Don't know about the judicial foreclosure though. Do you have an attorney?

I would speak to one ASAP.

Good luck.

[ursula]

I have spoke with my attorney, and she is unsure also. I am just keeping my fingers crossed at this point...

[jeb]

I have spoke with my attorney, and she is unsure also. I am just keeping my fingers crossed at this point...

Well, I would tell her to FIND OUT or go find another Attorney. - jb

[dingdong]

I am pretty sure they can't kick you out once your BK is filed. There are some provisions for landlords who have a judgement prior to filing that limits the stay and requires the posting of rent to stay an eviction, but I am fairly certain that is landlord/tenant specific and does not apply to HOAs. So once your BK is filed, you should be able to stay for at least 4 months ish unless the HOA is granted relief to foreclose.

Since the house will become part of the BK estate, I can't imagine a judge allowing a HOA foreclosure for a few thusand dollars? But who really knows. Perhaps you can do a search on HOA foreclosures and relief from stay and see if you find anything?

Here is a link you might find helpful.

http://real-estate.lawyers.com/homeowners-association-law/HOAs-and-Bankruptcy-Foreclosure-and-Workouts.html

[dingdong]

Ok, still poking around for you..

In California, there is a 1 year right of redemption for a judicial foreclosure, as compared to a 90 day redemption for a trustee sale. This fact might work in your favor. Check it out or ask your attorney about it.

[ursula]

Thanks for all your poking around, I'm gonna check out this link