@Anonymous wrote:
We were in the process of applying for a home loan when the lending officer said that we had a second foreclosure...
Details:
10/2008 CH. 7 BK Discharge 10/2008. Home included in BK and discharged
09/2009 HOA does a non judicial foreclosure on the property and a quitclaim deed to transfer title from us to them and forecloses on the property
9/2011 BOFA forecloses on the property again and lists us on th foreclosure along with the HOA etc
BOF A attorney states that our lien/loan was discharged in 10/2008 with the bk and we were completely removed off title in 9/2009. We had not interest or liability to the property.
Our lender that we are trying to get the loan from is now stating that they have to go off the 9/2011 date instead of the 9/2009 date. Is this correct? Is there a lender that will look at just the first foreclosure??
Thank you!
As odd as it sounds, you can have two foreclosures on the same property in the scenario you describe.
In Florida (and maybe other locations too) the HOA can put a lien on your home for the past due fees and then foreclose on the lien.
If they foreclose on the lien, they own the house -but they don't have clear title. The title is subject to the pre-existing mortgage lien. Your bank still has to foreclose on their mortgage lien in order to get the collateral (your property). The reason the HOA forecloses first is because they can do it very quickly and then rent the property while the bank is foreclosing. It is becoming more common here for the attorney's to recommend these types of foreclosures for two reasons: 1) the fee to the HOA attorney is huge and 2) the HOA gets the monthly maintenance paid until the bank forecloses. Naturally the HOA can't sell the house to anyone else without the prior cooperation of the original owner if the market value is less than the outstanding mortgage. If the market value is greater than the outstanding mortgage, the HOA can sell the property because the bank would be paid in full.
The actual final foreclosure is the one where the bank has the sale. That is why your lender is looking at the 2011 date. The HOA foreclosure prior was just temporary.
BTW, the BK only discharges your personal liability. Your surrender of the property is not really complete until the bank discharges its mortgage lien either through foreclosure, deed in lieu or short sale.
