Are investors purchasing properties at HOA lien auctions to flip the property? How would they make money if there is a first mortgage (in the foreclosure process). Are they still responsible to the first mortgage holder or does that remain the liability of the original mortgage holds?
Real Estate Attorney
The mortgage serves as a lien on the property. When the HOA forecloses on the property, the mortgage is still there. The HOA as the new owner of the property is responsible for paying the mortgage or they can lose the house in foreclosure.
If you buy theproperty at auction, you are still subject to the mortgage and any other unpaid liens on the property that were placed there ahead of the HOA lien.
You make money as an investor if there is any equity in the property over and above the existing liens.
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