The bank is also holding an accepted short sale from the owner that has not been decided upon. Can the bank close on the short sale or are they obligated to deal with me?
As you are now the owner through the HoA foreclosure, the former homeowner has no further authority to proceed with the short sale with the lender.
Similarly, however, since you are not the borrower the bank has no requirement to speak or work with you either.
If you can get authority from the former homeowner to speak with the bank, you can then begin negotiations with them. If you get no cooperation, you might be stuck.
I would recommend reaching out to the former homeowner, the realtor for the homeowner, and of course a local attorney for help.
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Your foreclosure sale purchase gives you a right to title. Prevailing at sale gives you a Certificate of Sale. If there is no objection within 10 days from then, you should receive a Certificate of Title. The bank's short sale negotiations with the prior owner of that HOA property is irrelevant once you get a Certificate of Sale, with the only exception being if the prior owner of the HOA property objects to the sale, and prevails on the objection. That's not easily done, but they do have title until a Certificate of Title is issue to you. Even if they closed that short sale deal, either prior to (unlikely or the HOA would have paid surely been paid) or after the foreclosure sale, the property should end up titled in your name subject to the bank's mortgage lien and any other superior liens and property taxes.
The law is complicated and although the facts expressed may seem to be all that is relevant, there may be many other important facts to consider. Also, the law is constantly undergoing change, so what may be correct today, may not be accurate tomorrow. Only a full consultation with an attorney experienced or knowledgeable in the specific legal subject matter is likely to result in the optimal course of action. My practice has entailed more than a 30 year span of many real estate, personal property, and bankruptcy issues. Find out more about me at: FloridaPropertyLitigation.com.
The bank has no obligation at all to deal with you,and as noted, the borrower no longer has any rights in the property and therefore nothing to sell in a short sale.
It might be possible for you and the borrower to cooperate in some sort of resolution involving a sale to you. Otherwise you are out whatever you have spent.
Bottom line is that by bidding at the HOA auction you have stepped into a mess and need to retain a knowledgable real estate attorney to assist you in extricating yourself with the least possible damage.
Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.