Bought HOA Lein (Not on purpose)

[Tim Czarkowski]

I have been buying at foreclosure auctions recently and doing pretty well. Unfortunately last week I purchased what I believed to be a first but it ended up the mortgage company was re-foreclosing the HOA lien because of an error. Needless to say my title company was not doing what I thought they were and confirming which lien was actually being foreclosed. I was planning on switching companies after this deal because the guy seemed disorganized and did not really seem to understand what I was doing. One deal too late I guess. I purchased the lien for 12,700 and have a buyer lined up at 38,000. The first mortgage balance was 33,000 back in October. So basically if I'm looking at losing my entire investment at a minimum and maybe a little more after closing costs. My question is do I have any other options? I am meeting with my attorney on Friday to discuss it but I would love some other opinions on what to do.

I need to act quicker on my gut. I was using this guy because he works out of my office, so it's who the broker pushes us towards. He claimed to know what he was doing but he seemed unable to answer some of my questions and asked others he should have known. Oh well, it could have been a much more expensive lesson then it was I suppose.

[Tim Czarkowski]

Title insurance can not be provided on properties bought at auction, here at least. They will provide insurance when I resell but not on my purchase. Yes I am using them for lien searches. I have some understanding of this but have been trying to learn more. I have not been able to find a class or anybody willing to teach me more about it so far.

It's obvious the reason I would want the bank to short but I agree that it would not be in the banks best interest to do that. That's why I see that as a long shot. You never know though, banks do incredible stupid things day in and day out.

As stated before I will consider holding the property depending on the terms. If it entails my paying the mortgage off and have somewhere around 50,000 tied up in it, I would rather take the loss and move on. If I am able to reinstate it then it might make sense. The "loss mitigation" is the whole reason I have posted here and also the reason I am meeting with my attorney.

Foreclosure is also handled by the courts here but, as stated earlier, all bidding is held online here, so no opportunity to ask the attorney. If I was the junior lien holder I certainly wouldn't announce that to anyone.

Basically yes I made a mistake but everyone does at some point. I am just glad that although it was an expensive lesson it wasn't worse. As stated in the original post I have just recently started and I know I don't have thorough enough understanding of the title search process but I am working on rectifying that. I have read everything on this forum and many others along with countless other real estate books. Also my choice of title agent was extremely poor but that has been taken care of. Thankfully my first couple deals went great and I have made more money year to date working for myself than I made all of last year working for someone else. I've got two I am bidding on tomorrow so wish me luck.