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HOA Foreclosures and "Short Sales" in Florida: Can lenders accept short payoffs and what are the mechanics of this?

Palm Harbor, FL |

I'm a Florida Realtor representing an HOA that foreclosed on the title to a property. I also represent a buyer who wants to purchase this property at a fair price with clear title, however, there is an outstanding mortgage lien to deal with. We do many regular short sales, yet this type of scenario I can't find any data on. We've been communicating with the lender for more than 6 months trying to get them to accept a short payoff. We can't get the original borrower's cooperation to do a regular short sale. To further complicate things, the house was stripped a few days prior to the HOA foreclosure and is uninhabitable. I can't understand why the lender would want to foreclose on the mortgage and take the house back when it needs $90K of work to be sellable. What are the possibilities?

Attorney Answers 1


There is not much you can do unless the lender wants to cooperate. You will probably have the same issues even if the borrower was cooperative. You cannot force the lender to give you a short payoff or to cooperate with you. You have another issue now, which is the lender is not obligated to pay the HOA dues because the HOA owns the property. These are the issues that you face when there is no equity in properties. Condo associations do this becuase it is easier for them to rent the palce out in the interim and generate cash flow; but it is much harder for an HOA to do that. The only thing you can do is be persistent and try to get someone that will take the time to help you out.

This response is being provided for informational purposes only, and shall not be construed as legal advice or establishing an attorney client relationship.

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