Google+
  • Ocwen3.86+0.05 +1.31%
  • Zillow41.19+0.17 +0.41%
  • Trulia4.01+0.33 +8.97%
  • NationStar19.71-0.43 -2.14%
  • CoreLogic48.59-0.51 -1.04%
  • RE/MAX66.95-0.05 -0.07%
  • Fannie Mae3.07-0.03 -0.97%
  • Freddie Mac2.99-0.01 -0.33%
  • Wells Fargo53.75+0.34 +0.64%
  • CitiMortgage72.88-0.24 -0.33%
  • Bank of America26.58+0.10 +0.38%
  • Fidelity National Financial35.59+0.57 +1.63%
  • First American50.65+0.28 +0.56%
  • Black Knight Financial Services43.05-0.55 -1.26%
  • AUDUSD=X0.7847-0.0030 -0.3821%
  • USDJPY=X113.2180+0.6610 +0.5873%
Home | Commentary | Are HOAs Taking Advantage of Mortgage Servicers?
Print This Post Print This Post

Are HOAs Taking Advantage of Mortgage Servicers?

While Homeowner Association (HOA) liens for unpaid assessments typically have priority over second mortgages and other junior liens (because the HOA liens may “relate back to” the HOAs’ previously-recorded declarations), first mortgages receive special treatment in various states, such as Minnesota. Despite that special treatment, HOAs often demand payment of substantial bills by lenders foreclosing first mortgages. In addition to the regular monthly dues, the HOA bills may come riddled with line items for special assessments, attorneys’ fees, late charges, interest, and more that may not be the responsibility of the lender to pay. When the bills threaten to delay sale closings, lenders must quickly decide whether to pay the bills or delay matters, potentially losing sales, to challenge the HOA’s invoices.

As an example, Minnesota law generally provides a clear outline of what charges must be paid by foreclosing lenders. The foreclosing lender for a first mortgage is only required to initially pay the “unpaid assessments for common expenses levied which ‘became due,’ without acceleration, during the six months immediately preceding the end of the owner’s period of redemption.” The lender is not responsible for late charges and attorneys’ fees assessed during or prior to this six-month look-back period, because the Minnesota HOA statute specifically omits these amounts in the list of allowed charges.

Unfortunately, unscrupulous or ill-informed HOAs may add all of the unpaid association dues, late charges, and attorneys’ fees to bills regardless of their timing. Often, these unlawful charges are paid by lenders who are too busy to challenge every line item. When an HOA bill looks suspect, a lender should determine what assessments are legally allowable before making payment. It may be more cost effective for a lender to hire an attorney for an invoice review and challenge, than to repeatedly pay substantial sums that are avoidable.

Of course, once the first mortgage holder completes foreclosure and that lender becomes the outright owner of the HOA property, that party must timely pay all HOA dues and assessments going forward. If those assessments become delinquent, the lender or its successor would become subject to collection costs, including attorneys’ fees, similar to any other unit owner, as well as foreclosure by the HOA. As soon as the redemption period expires in redemption states, or the lender becomes the outright owner of the property through other means, the lender should ensure the HOA is contacted and that the HOA account is kept current.

Certain associations may also strategically time when they levy special assessments to try to get lenders on the hook for those expenses.  For example, consider the instance when an abandoned, mortgaged HOA unit has a fire in one year causing the HOA to incur costs for repairing that unit, but the lender does not foreclose its mortgage until the following year.  The HOA may delay levying the repair costs until after the mortgage foreclosure sale. Since the HOA lien statute may not define when those repair costs actually “became due,” it may be unclear without court intervention whether the lender is truly obligated to pay those assessments.

A foreclosing lender who claims a first mortgage position should also ensure that property records are consistent with that senior lien claim as early as possible.  This is particularly true in non-judicial foreclosure states, where senior liens can potentially foreclose and wipe out junior liens without notice.  If an HOA forecloses its own lien and has a sheriff’s sale, all junior mortgage liens that fail to redeem from the HOA’s foreclosure, where applicable, will become wiped out.  If there is a previous mortgage that was paid off by the intended first mortgage, but not properly satisfied or released of record, the intended first mortgage could be deemed a second mortgage and wiped out by an HOA lien foreclosure. This same result could also occur when intended first and second mortgages are recorded in the wrong order. A Minnesota court recently decided that the priority order of liens may be set as soon as the HOA’s sheriff’s sale is completed, preventing the lender from establishing priority later through a judicial action.  

Mortgage holders should record Request for Notice documents for prior lien foreclosures wherever applicable. In certain states such as Minnesota, these Request for Notice documents must be recorded separately from the mortgage. Importantly, mortgage holders should also diligently review any foreclosure notices immediately upon receipt—as well as related property records.  Lenders should never assume they hold first mortgages until after they have reviewed property records confirming that status.

If a lender does successfully challenge an HOA through litigation, it is possible in certain jurisdictions that the lender can recover attorneys’ fees and litigation costs.  In various jurisdictions, a court may award reasonable attorneys’ fees and litigation costs to the “prevailing party.” Moreover, if the lender is able to establish that the HOA willfully failed to comply with the HOA statutes, the court may award punitive damages as well in certain jurisdictions, such as Minnesota.

In sum, lenders need to be wary of HOA liens and their foreclosures, and act quickly to spot and resolve issues as soon as they arise. Otherwise, lenders may end up paying significant and unnecessary costs to HOAs, or worse, lose their liens entirely to HOA lien foreclosures.

About Author: Brian H. Liebo

Profile photo of Brian H. Liebo
Brian Liebo is the Managing Partner of Minnesota Mortgage Default Services Law firm, Usset, Weingarden & Liebo PLLP and is an MSBA Board Certified Real Property Specialist.

About Author: Kevin Dobie

Kevin Head Shots 2-3-X2
Kevin Dobie is a Partner and handles litigation and other matters for mortgage servicers at the firm.

269 comments

  1. Pingback: xmt85c4wx5ctwxw3tcerthve56

  2. Pingback: http://falschgeldkaufen.blogspot.com/2017/01/wo-kann-ich-falschgeld-kaufen.html

  3. Pingback: kudzu alcoholism

  4. Pingback: دانلود قسمت هشتم شهرزاد دوم

  5. Pingback: دانلود شهرزاد قسمت هفتم فصل دوم

  6. Pingback: قیمت پنجره

  7. Pingback: anal sex

  8. Pingback: دانلود قسمت هفدهم عاشقانه

  9. Pingback: دانلود قسمت دهم فصل دوم شهرزاد

  10. Pingback: Marley Brinx

  11. Pingback: Rachel Starr

  12. Pingback: دانلود شهرزاد قسمت هفتم فصل دوم

  13. Pingback: sosyalmarketim kullanmayin

  14. Pingback: hamptonbaycelingfanblog

  15. Pingback: April O'Neil

  16. Pingback: lesbian porn xxx

  17. Pingback: Paleo Diet

  18. Pingback: online movies

  19. Pingback: عاشقانه

  20. Pingback: t-shirts med hunde motiver

  21. Pingback: Loyola College for Sale

  22. Pingback: دانلود قسمت یازدهم شهرزاد دوم

  23. Pingback: دانلود قسمت دوازدهم عاشقانه

  24. Pingback: videos porno

  25. Pingback: porno

  26. Pingback: Gene

  27. Pingback: videos porno

  28. Pingback: medical college in India with 45% marks

  29. Pingback: porno gratis

  30. Pingback: videos porno

  31. Pingback: porno gratis

  32. Pingback: porno

  33. Pingback: videos porno

  34. Pingback: porno

  35. Pingback: porno gratis

  36. Pingback: porno gratis

  37. Pingback: mysql support

  38. Pingback: قیمت پنجره دوجداره در ایران

  39. Pingback: دانلود قسمت هفده عاشقانه

  40. Pingback: ساخت پنجره دو سه جداره

  41. Pingback: پنجره ضد سرقت المانی

  42. Pingback: Facial Spa Services Oakland Park

  43. Pingback: Acne Facial Treatments Hollywood

  44. Pingback: فروش توری

  45. Pingback: پنجره دوجداره

  46. Pingback: دانلود موزیک

  47. Pingback: دانلود قسمت ششم شهرزاد دوم

  48. Pingback: porn

  49. Pingback: hotel search engines

  50. Pingback: free zynga poker chips

  51. Pingback: i88Cash

  52. Pingback: پنجره

  53. Pingback: bitcoin hft

  54. Pingback: coin-banks.com

  55. Pingback: bitcoin hft

  56. Pingback: coin-banks trading

  57. Pingback: coin-banks

  58. Pingback: mdansby software

  59. Pingback: nicocontrol pre�o

  60. Pingback: sur le m�me sujet

  61. Pingback: کول دانلول

  62. Pingback: anime

  63. Pingback: ping g30 irons for sale

  64. Pingback: دانلود شهرزاد قسمت سیزده 13

  65. Pingback: cr cheats

  66. Pingback: دانلود سریال شهرزاد قسمت 15 پانزده

  67. Pingback: پنجره دوجداره

  68. Pingback: Accounting firms in chicago

  69. Pingback: www.plurk.com/p/m9p1es

  70. Pingback: Supercars

  71. Pingback: Social Media Marketing

  72. Pingback: zobacz

  73. Pingback: blazing key

  74. Pingback: rhymes for kids

  75. Pingback: kids cartoons before and after

  76. Pingback: five little

  77. Pingback: Dresser As Changing Table

  78. Pingback: video for kids

  79. Pingback: Automate Money Making Make Money Online

  80. Pingback: Daine

  81. Pingback: air conditioner repair

  82. Pingback: 16 دانلود شهرزاد

  83. Pingback: دانلود قسمت دوم سریال عالیجناب

  84. Pingback: work from home

  85. Pingback: دانلود سریال عالیجناب قسمت اول 1

  86. Pingback: دانلودسریال عالیجناب قسمت دوم

  87. Pingback: دانلود فیلم

  88. Pingback: game

  89. Pingback: http://urladda.com/5J6t

  90. Pingback: PJ Max

  91. Pingback: پنجره ضد سرقت ترک

  92. Pingback: kids songs

  93. Pingback: آموزش پنجره دوجداره

  94. Pingback: شرکت تولیدی پنجره دوجداره ترک

  95. Pingback: فروش توری

  96. Pingback: پنجره دوجداره وین تک

  97. Pingback: Upholstery Cleaning harker heights TX

  98. Pingback: taylormade sldr australia

  99. Pingback: funny song

  100. Pingback: Catering

  101. Pingback: la soucre

  102. Pingback: Limos Bus Vancouver BC

  103. Pingback: Safari in Dubai

  104. Pingback: rent home

  105. Pingback: USB-Charging-Cable

  106. Pingback: aws online course

  107. Pingback: sell home

  108. Pingback: دانلود فیلم روز

  109. Pingback: دانلود فیلم با کیفیت

  110. Pingback: click terminal

  111. Pingback: PPC Ireland

  112. Pingback: درب

  113. Pingback: دانلود فیلم ایرانی

  114. Pingback: Pixel Gun 3d hack

  115. Pingback: how to buy bitcoin

  116. Pingback: پنجره دوجداره

  117. Pingback: Peppa

  118. Pingback: Prank video

  119. Pingback: Manufacturers

  120. Pingback: jewelry software

  121. Pingback: پنجره دوجداره

  122. Pingback: پنجره دوجداره

  123. Pingback: پنجره دوجداره

  124. Pingback: gernas mall

  125. Pingback: پنجره دوجداره

  126. Pingback: IELTS preparation in Karachi

  127. Pingback: فروش توری پنجره دوجداره

  128. Pingback: IELTS exam in Karachi

  129. Pingback: پنجره دوجداره

  130. Pingback: instagram porn

  131. Pingback: kids animation

  132. Pingback: مشاوره بازاریابی اینترنتی

  133. Pingback: viagra

  134. Pingback: strange phenomenon

  135. Pingback: walmartone login

  136. Pingback: Mitch McConnell

  137. Pingback: judi togel telak 4d

  138. Pingback: my link

  139. Pingback: Frozen Elsa

  140. Pingback: seomarketing.CooleStart.com

  141. Pingback: artificial plants

  142. Pingback: Vancouver BC Airport Shuttle

  143. Pingback: good to great

  144. Pingback: https://www.youtube.com/watch?v=Bld2NoB1hBI

  145. Pingback: low flow shower head

  146. Pingback: walmart1 login

  147. Pingback: Kostenlos werben

  148. Pingback: private proxies

  149. Pingback: ed sheeran tickets

  150. Pingback: download best

  151. Pingback: فیلم اکسیدان

  152. Pingback: karaj

  153. Pingback: window

  154. Pingback: aarp dental insurance plan for seniors

  155. Pingback: click here to read

  156. Pingback: Yakima Web Designer

  157. Pingback: Bad Cat

  158. Pingback: instagram turbanli porn

  159. Pingback: (apple reseller program)

  160. Pingback: Dicas

  161. Pingback: پنجره

  162. Pingback: Yakima Web Design Company

  163. Pingback: EVA TV

  164. Pingback: Seo

  165. Pingback: lead lighting proof

  166. Pingback: Masha & The Bear

  167. Pingback: nikon d5300 lenses

  168. Pingback: Fuzjn 365

  169. Pingback: Fuzjn 365

  170. Pingback: maintenance

  171. Pingback: Schlüsselnotdienst

  172. Pingback: zumbido no ouvido e tontura é grave

  173. Pingback: Web Design

  174. Pingback: slot machines

  175. Pingback: 12 month loans bad credit

  176. Pingback: karajupvc

  177. Pingback: dip dish

  178. Pingback: chips bowl

  179. Pingback: real money casino games

  180. Pingback: Tresoröffnung

  181. Pingback: دانلود

  182. Pingback: Cash Offer

  183. Pingback: download

  184. Pingback: download

  185. Pingback: پنجره

  186. Pingback: دانلود

  187. Pingback: دانلود فیلم

  188. Pingback: Strategy Gameplay

  189. Pingback: garden

  190. Pingback: دانلود

  191. Pingback: پنجره دوجداره

  192. Pingback: garden

  193. Pingback: jacksonville seo services

  194. Pingback: read now

  195. Pingback: home maker on the edge

  196. Pingback: tiffany

  197. Pingback: Self Storage Units and Facilities in Linden

  198. Pingback: new episode

  199. Pingback: animated video

  200. Pingback: Agen Bola

  201. Pingback: russian homemade 3some

  202. Pingback: kids animation

  203. Pingback: how to remove blackheads

  204. Pingback: Mac Screen Service and Repair

  205. Pingback: vape pen battery mods

  206. Pingback: Live Elvis Singing

  207. Pingback: نهنگ عنبر

  208. Pingback: learn colors for kids with balls

  209. Pingback: FINANCE TEST BANKs

  210. Pingback: Agen Bola

  211. Pingback: Private Tour

  212. Pingback: payday loans

  213. Pingback: Judi Online

  214. Pingback: https://github.com/jimstephens3290

  215. Pingback: affiliate network

  216. Pingback: buy illegal seo

  217. Pingback: athletic sport socks

  218. Pingback: car shipping

  219. Pingback: پنجره دوجداره

  220. Pingback: Homepage

  221. Pingback: دانلود شهرزاد

  222. Pingback: دانلود آینه بغل

  223. Pingback: headhunting

  224. Pingback: دانلود فیلم نهنگ عنبر 2

  225. Pingback: music

  226. Pingback: real caller app

  227. Pingback: Stroller cover

  228. Pingback: child abuse hotline

  229. Pingback: SkinAlley

  230. Pingback: missguided coupon code

  231. Pingback: dealfeed

  232. Pingback: Taruhan Bola

  233. Pingback: Locksmith

  234. Pingback: maxima investments

  235. Pingback: porno videos

  236. Pingback: porn movie

  237. Pingback: get redirected here

  238. Pingback: game hack

  239. Pingback: free pay

  240. Pingback: دانلود موزیک

  241. Pingback: پنجره دوجداره

  242. Pingback: Agen Bola Selalu Terpercaya

  243. Pingback: go in my site

  244. Pingback: ΘΕΣΣΑΛΟΝΙΚΗ ΞΕΝΟΔΟΧΕΙΑ ΤΗΛΕΦΩΝΑ

  245. Pingback: watch porn google

  246. Pingback: buy hacklink google

  247. Pingback: USAA Bank

  248. Pingback: bar supplies

  249. Pingback: best earphones and earbuds

  250. Pingback: sink cleaner

  251. Pingback: Oddsmonkey

  252. Pingback: WEB DESIGN PORTFOLIO

  253. Pingback: Oddsmonkey

  254. Pingback: Oddsmonkey

  255. Pingback: Oddsmonkey

  256. Pingback: Oddsmonkey

  257. Pingback: gauze roll bandages

  258. Pingback: menoquil review

  259. Pingback: consumerhealthdigest.com/eye-cream-reviews/eyevage.html

  260. Pingback: somulin review

  261. Pingback: envisionsolutionsnow.com/omega-xl-review/

  262. Pingback: steel funnel set

  263. Pingback: christmas 2017 coupon codes

  264. Pingback: prostara

  265. Pingback: Baby breastfeeding cover

  266. Pingback: رگ خواب

  267. Pingback: baby shower gift

  268. Pingback: San Diego SEO

  269. Pingback: Google blackhat

Leave a Reply

Scroll To Top