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If the 1st and 2nd mortgages exceed the value of the property then it would be useless for the HOA to foreclose?

Orange, CA |

The HOA would not be able to gain monetarily through foreclosure given the fact that the property value is much less than is owed on the 1st mortgage alone.
Would it be safe to say they would not foreclose given the value issue and the current liens on the property.

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Attorney answers 1


Short term-wise, yes, the HOA gets nothing if they foreclose on you and the value of the unit is less then the loans on it. But what you have to consider is that the HOA wants a paying owner in that unit, so if you completely stop paying your dues, the HOA could initiate a foreclosure to cut their losses and get rid of you, even at the cost of losing what you currently owe, because then, relatively quickly though with some effort for CA non-judicial foreclosure, they'll get a paying owner in there.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.