Why do investors buy HOA liens at auction?

[Eddie P.]

I constantly see investors buying up HOA liens at the foreclosure auction and wonder what is the reason? If they had no mortgage or a low balance on the mortgage, I would understand. Most times they are way under water and still get bought.

Am I missing something? Do they evict the owners and hope they can rent it out long enough to make a profit, while the bank forecloses? Do they try to negotiate with the lien holder for a low settlement?

Doesn't seem logical.

[Rob Gillespie]

HOA liens are "super liens"! They go in front of first position mortgage, so they can foreclose the bank out, so the bank has a choice, pay off the lien with interest or loose their lien. Same with back property tax liens. Hope that helps. :mrgreen: