NPN owned by home owners association

[Erick M.]

Hello Fellow BPer's 

I came across a NPN for sale which appears, according to the county records, to be owned by the homeowner association. I assume that the HOA foreclosed on the property and now this note is for sale. According to the prelim documents the borrower owes 40K in arrears. My question is.... Is the HOA now responsible for the arrears on this note which could be motivation to agree to a deed in Lieu or does an HOA lien take priority and wipe out other liens?

I haven't run into this situation before and looking for some advice and insight for more experience people.

Thanks

[Chad U.]

Depending on the state, most likely the HOA foreclosed from a junior position and took title but still subject to the first lien mortgage. If they are true super lien States like Nevada or Colorado then the HOA would have wiped the lien