Out of nowhere notice from HOA demaning occupany or sell

[Davon Lowery]

So, I get a hit from a motivated seller from Lithonia, GA. 

The property is a 1,300 sqft. 3 bd 2 ba SFR with a community HOA.

After nearly 10 years, they decided to enforce a policy that stipulates, that the properties need to be owner occupied; moreover, only 25% of the homes covered by the HOA's authority may be non-owner occupied. The HOA is demanding that she evict her tenant and occupy her property, sell her property, or loose it to legal action for being in breach of contract.

I asked the seller how much did she think her property was worth, she said $40k, I asked how much did she owe, she said $90k (trying not to say WOW!!!) I calmly asked how did that happen; she said interest only loan and I never bothered to refi to get into a fixed. Jees ma'am...

Well ma'am, I can't tell you what to do, but I can tell you a few things that might happen, would you like to hear more; yes.

If you walk away, the lender will be 1099'ing you for the difference and you will be sued by the lender for the difference and possibly the HOA for any legal cost related to your case.

You could request that your lender approve a short sale for you; unfortunately, you more than likely will not qualify for a loan modification, the property is no your primary residence. Also, even if they approve the short sale, you can still be liable for the difference. 

She said she had a lawyer and that she was fighting the HOA for singling her out, especially after all this time; which made me think, have you received any updates (in writing) from your HOA she said she didn't know.

What I suspect is that the HOA has made subtle change to the charter/agreement which has subsequently allowed this seller to be exposed.

I told the seller that I was unable to buy the house but, I would be checking out a few things and would get back if I found out anything useful.

There are a lot of mistakes to learn from here.