Can they legally do this?

[Steve Stallworth]

I'm looking at a property in Florida that's being foreclosed by the HOA. However, the house is upside down. There's 1.2 million owed in 1st, 2nd and a privately held 3rd. The house is worth about 500k.

I'm not putting my money in this property and obviously don't see it as a money maker, BUT -the owners asked me a question to which I didn't know the answer.

The 1st filed Lis Pendens a few years ago and then just stopped moving forward (Bank of America) after the owner filed a Pro Se "produce the note" defense. So, what would happen if the HOA went through the foreclosure process, the court forced a "sale" at auction, and then the first mortgage holder (BOA) came in and bid the minimum $100?

Could BOA just eliminate their foreclosure process by doing that? Obviously, no one else would bid, but BOA could wipe the 2nd and 3rd out, plus the HOA, effectively wiping out the need to ever have to "produce the note" or defend any other defense the owner may have had.

Surely there's some law which prevents that from happening or it would be done all the time. I've never heard of it happening personally.