A friend of ours was the successful third party bidder at a HOA foreclosure sale. The bank was not present at the sale. The bid survived the redemption period and the clerk issued him title. It is now known that the property has another HOA lien (the smaller neighborhood ASSO), that is in process of foreclosure. My first question is can the smaller neighborhood Asso foreclose now after the development HOA has already foreclosed? My friend would like to work something out but just learned of the case. Also, the home has a federal tax lien. My second question is what position is the federal tax lien? The house has a 1st mortgage that is much more than the value of the house. My third question is can the bank foreclose on a house with a federal tax lien? Does the lien stay with the house or does it go with the pervious homeowner? My friend would like to work with the bank perhaps make an offer for their interest in the property. Have you heard of anyone doing this?
A friend of ours was the successful third party bidder at a HOA foreclosure sale ($5200.00). It is now known that the property has another HOA lien (the smaller neighborhood ASSO $2200.00+fees), that is in process of foreclosure. Also, the home has a federal tax lien ($82,000.00). The house has a 1st mortgage ($327,000.00) that is much more than the value of the house($230,000.00).
Here are some Quick Facts about Foreclosure in Florida:
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Primary Security Instruments: Mortgage
Timeline: Typically 180 days
Right of Redemption: Yes
Deficiency Judgments Allowed: Yes
In Florida, all mortgages are foreclosed in equity. In a mortgage foreclosure action, the court severs, for separate trial, all counterclaims against the foreclosing lender. The foreclosure claim shall, if tried, be tried to the court without a jury.
The court order of foreclosure will specify how the foreclosure must take place, and the foreclosure must take place on those terms. Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is required to be placed in a newspaper, it is the responsibility of the lender or their representative to place such advertisement, publication, or notice.
Equitable Right of Redemption ends at the foreclosure sale (or at another time specified by the courts, but this rarely happens). There is a period of time after the sale that "the court reviews the sale to ensure a fair price has been paid." Basically, this period of time allows parties to object to the sale on the basis that proper procedures were not followed or collusion existed between the bidders, for example. This period is usually 10 days, after which the Certificate of Sale is filed and title passes, if the sale is confirmed. If the sale is not confirmed, another sale is ordered. (Reference F.S. Chapter 702)
The lender may sue to obtain a deficiency judgment in Florida.
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Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States.
Buying property at a foreclosure sale in Florida can be a way to purchase property at bargain prices. However there are many risks. Some liens may not be foreclosed because they have priority over the lien that was foreclosed or because the the lien holder was not properly joined in the foreclosure action. There is no way to evaluate the position of your friend without reviewing the foreclosure file in the courthouse and doing a title search on the property. It sounds like there are other parties with interests in the foreclosed property. Many of these people may be willing to negotiate or compromise their claims. I suggest that your friend contact an experienced real estate attorney to evaluate the situation and recommend a strategy for proceeding.
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.