Superliens and HOA foreclosure in the news

A pair of Wall Street Journal bits today– a blog and a paywall-protected article– discuss HOA foreclosures.  An association can, in Idaho and most states, foreclose on its assessment liens.

What is unusual is that the blog actually looks at the rationale behind HOA foreclosures instead of taking the usual populist anti-HOA tone.  In doing so, the blog reports an argument that we have had to make many times in our own office:

“The problem is that [some] lenders aren’t doing what they need to be doing. They’re not fulfilling their obligation. All they need to do is fulfill their obligation in paying the assessments or to exercise their right to foreclosure in a timely manner,” says Ms. Bauman.

Most of this WSJ coverage is about states where HOAs have a “super-lien” that allows an HOA to get its money from foreclosure before the banks even get paid.  We don’t have that here in Idaho, where most CC&Rs explicitly subordinate the HOA’s liens to purchase price mortgages.  However, HOAs in Idaho also face the same banks and the same problems with foreclosure.  An idaho HOA in extreme cases may even see advantages to foreclosing subject to a mortgage, just to help the process move along.

The blog:

http://blogs.wsj.com/developments/2014/10/14/why-homeowners-associations-want-to-foreclose-on-homes/ 

The article:

http://online.wsj.com/articles/foreclosure-dispute-pits-mortgage-lenders-vs-investors-1413321865

PS, Ballard Spahr posted about similar super-liens in Colorado, recently:  http://www.jdsupra.com/legalnews/implications-of-a-homeowner-association-92787/

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