Clarification with HOA Foreclosures in FL

[Parker Detweiler]

I have been thumbing through some of the forums and see a lot of people talking about this in many capacities. In general what I have noticed is that the insight provided by most with regards to FL is wrong.

I do purchase these to clarify.

To clarify there are three reasons that most people who purchase HOA foreclosures are doing it.

1. "Stupidity" - This is very self explanatory.

2. "Rental" - In this strategy the goal is literally to gain legal control of the property in order to rent it for an extremely high rate of return. In some very rare instances the banks in the recent past have legitimately lost all paperwork to a loan and don't know it exists. In these circumstances you can either rent the property forever or take the risk of notifying the bank that it has lost the note by filing a Quiet Title suit. However the most common strategy with these foreclosures is to partner with a foreclosure defense attorney in order to fight the foreclosures as long as possible and prevent the bank from gaining a judgment against the home. Normally you would give the attorney a percentage of the overall net profit from the rental and/or sale. Most of the time these foreclosures can be kept in court for three to five years.

3. "ReSale" - When reselling the property you must get clear title obviously. This is the way in which I am willing to purchase an HOA foreclosure and the rarest of the three. In the state of FL everything is subordinate to an HOA foreclosure except for a first mortgage. If the HOA foreclosure names the Jr Lien Holders they are foreclosed and extinguished. As well personal debt does not attach in this type of foreclosure if it is the defendants homestead. With all of this taken into consideration there are occasions where the defendant is just oblivious and lets homes be sold with equity for no specific reason however the most common in this situation is when there are Jr Liens that do not attach with the purchaser of the HOA foreclosure deed. It is a very risky game to guess loan balances as banks will assess some hefty fees for things such as "property preservation", I have seen as much as $70,000.00 of ridiculous fees like these in my experience. Unfortunately you just have to pay it or walk away from the idea of getting clear title as you have no grounds to stand on in these situations as you ARE subject to the first mortgage at the least.

It is a legal form of gambling and not for those that aren't prepared to lose everything they spend on these deals. 

I am not providing any legal advice nor am I recommending this strategy to anyone. I am in no way representing this as anything other than information of how I handle these types of foreclosures.