How does an HOA foreclosure work if you are upside down?

[limage]

I have a first at 208k, a second at 50k (this is not including fees- add another 15-20k since I haven't paid in a year). I think the place is worth 180-200k on a good day.

I stopped paying my outrageous $552 condo association fee about 4-5 months ago. They have recently filed to foreclose.

I am filing Ch 7 eventually (I am stalling becuase I think I might have to start paying the $552 again once I file- and there is zero action from the first lien holder).

In a way I will be glad if they can foreclose- because I want to move and leave the liability, but won't they have to pay off both of my loans to kick me out?

[SleepWellNow]

The way I understand it, they are in third position and would have to pay off the first and second to foreclose. Unless you are way off in the value of your property, I think they're blowing smoke.

[HHM]

The way I understand it, they are in third position and would have to pay off the first and second to foreclose. Unless you are way off in the value of your property, I think they're blowing smoke.

That depends on the state, but actually, the truth is the exact opposite. If an HOA perfects their lien, they leap over the mortgage and take the first position. So, when the HOA forecloses, it gets paid first. The thing is the buyer often does not get clear title to the property, the HOA foreclosure does not quash the inferior liens (the 1st and 2nd mortgage).

[SleepWellNow]

HHM - You may be right in this case. I was talking about California and didn't think about other states handling it differently. Thank you for the clarification.

[limage]

I'm in Florida if that makes any difference.