Buying HOA Foreclosures In Texas
Okay, so i amongst possibly bad advice, i have already purchased a HOA foreclosure at an auction. There is a superior mortgage lien on the property. So now i own a property in Texas that has a homestead exemption attached to it and the previous owners are still in the property and i assume they are still paying their mortgage since they havent forclosed on it. They bought in 2006 so if they got a loan for 100%, i am assuming there is not very much equity if any at all in this property. The question, what happens to the mortgage? Will the bank let me assume, if not, will they enforce the due on sale clause and force me to come up with the loan amount? If the previous owners stop paying, will the banks foreclosure go on my credit or the previous owners? Should have had these questions answered first, but i didnt, and its done (just threw that in there for those that like to criticize about how stupid it was blah, blah, blah) Thanks for any help.
I do have the right to evict them if necessary. They do have a right of redemption if they pay me what i paid at the auction plus 25% for the first year or plus 50% for the second year. After two years, thier right to redemption goes away. Because of this, i can not sell the property for two years, which is okay as long as i can rent it out
Good to know that it wont effect my credit should the bank foreclose, but the bank will likely foreclose should i kick the previous owners out and they stop paying the note correct? That said, it sounds like it is in my best interest to keep them in the home paying the mortgage until the redemption period is up. At this point i can sell the property and pay off the remaining mortgage or i can secure my own mortgage on this property for the remaining balance (which hopefully will be less than what the property is worth), evict the previous owners (if necessary, i dont want to be a jerk about this whole thing as i know they just happen to find themselves in a bad financial situation) and use this as a rental property.
Please let me know if i am missing anything here or overlooking something.
Thanks for your help
Ok everyone, help us out here!. I just purchased an HOA Foreclosed property. I will give specifics with the hope someone can give me directionon this matter. Specifics are as follows:
Purchased an HOA Foreclosure for $7,600 in Jacksonville Florida:
4/2 1584 sqft.
Superior Mortgage Lien of $112,000 in 2006.
What should I do with this HOA Foreclosure?
Property worth about $130,000
Quote:
Seems that HOA is not allowing rentals, so would need to sell.
I would get a copy of the CC&Rs and other governing docs to see what the rental restriction actually say, and if you want to spend a little $$$, have a RE/HOA attorney verify the restriction is legal and that the governing doc were legally ammended.
In collaboration with the construction industry, the FHA also recommends the use of clauses that are attached to the property. These provisions include a privilege for HOA assessments of owners that led to the possibility of eviction for nonpayment of fees assessed. In 1964, the Urban Land Institute has published its Manual of Homes Association, which provided a model for HOA commitments. One of the primary authors was the head of the Planning Division of the FHA.
[ Edited by joel on Date 11/10/2010 ]