Foreclosures by your HOA. It hasn't been a common topic that has gotten much media attention, but it is happening. As many homeowners are struggling to keep up with their mortgage payments, many have elected to stop paying their HOA in order to put as much money into their home as they can. This has pushed many homeowner associations to get desperate. They certainly have a duty to fulfill to the other home owners, but many who have fallen victim are outraged.
34 states allow for judicial foreclosures by home owner associations. Most states have a long redemption period so homeowners have the option of paying off their debt to the HOA. The redemption period is the time period that the homeowner has to pay back the HOA and reclaim their house after the Home Owner's Association has taken title. Some states have very short redemption periods that hardly give the home owner the option to get to the bank before their house is gone forever. Florida's redemption period, for example, is ten days.
While this may never affect someone you know, it is happening and it is a stark reminder to mortgage brokers and real estate agents to advise their clients of ALL the costs of home ownership.
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