I have a condo in Florida with a first mortgage, the condo association is threatening to foreclose for association dues.

Absolutely. The Association can foreclose on its lien for assessments despite the superior first mortgage. At the foreclosure sale, no one will likely bid on the property because of the existing mortgage, and the Association will take possession with a small bid of around $100. Within a couple of weeks a certificate of title will be issued in the name of the Association, and they may seek a writ of possession. The unit will still be subject to the first mortgage, which will likely file their own foreclosure action and take possession away from the Association when you stop paying the mortgage (if you haven't already).

Assocaition's sometimes do this with owners that are many months past due, with no end in sight. They rather sacrifice the money to remove the owner and force the bank foreclosure.