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Will HOAs Continue To Have The Right To Extinguish Mortgages?

The Supreme Court recently made a ruling that gave homeowners associations the power to extinguish mortgages on residential homes. Many lenders are frustrated with this change, and are asking the court to take back the decision. They simply do not believe that homeowners associations deserve this right.
If the ruling is not reversed, a homeowners association can foreclose on a home that may be negligent on its dues. They can then sell the property in an auction without ever having to take the matter to the courts. This action would extinguish the previous mortgage. Lenders believe that not only is this change problematic for them, but also does not look out for the best interest of the homeowner. If this ruling is to remain, and spread to other states, lenders are worried of its effects on the entire mortgage industry.
Prior to the court’s decision, it was argued that the lender has the ability to step in, and pay the dues that the homeowner had neglected to pay. If the lender takes this action, there is no need for the homeowners association to step in and foreclose on the home. However, lenders fired back with the argument that the homeowners associations rarely disclose the amount of owed dues, and do not accept payment from lenders. It will be interested to note future changes to this ruling, if any changes are to be made at all!
If you are interested in having an advocate in the real estate industry, please waste no time contacting The Barr Team, serving Southern California! With nearly 30 years of experience fulfilling the real estate needs of Californians, The Barr Team at Complete Real Estate Solutions can offer you the exemplary service you deserve! Contact us, today!

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