Buying HOA Liens

[Shawn Dandridge]

I am wondering if I can go directly to property management companies and buy HOA liens? . I've been reading that many investors buy the liens and rent out until the bank forecloses. Has anyone ever done this? The way I understand is that as long as the tenant has a valid lease the bank will have to honor it until it expires.

[Wayne Brooks]

@Conny W. Nevada state laws have no bearing whatsoever on Florida state laws. An HOA foreclosure against an owner who has a mortgage, does nothing to affect that mortgage. Anyone claiming it does is purely misrepresenting the law, and is looking for suckers to sell them to. Every HOA/COA Declaration has a unilateral subordination to a first mortgage. Hence the reason you're selling $150k properties for $32k. If you believed you had clear title, you wouldn't be discounting them so heavily. Yes, a buyer at an HOA auction has title to the property, albeit subject to the existing mortgage, and can legally collect rent....until the underlying mortgagee forecloses them out along with the original borrower. We just looked at a supposed tape of REO's a couple of weeks ago, at 50% of BPO, and they all turned out to be this same HOA auction acquired junk with underlying mortgages. Of course if you're counting on the underlying mortgages being "5 yeared out" that's a whole different delusion.

By the way, even in successful Quiet Title actions, Florida judges don't "issue Warranty Deeds".