Short Sale HOA Super Lien Question

[Tim Johnson]

Hoping that the brain power of the masses can assist in providing me with some clarity.

We have been going through the process of doing a short sale on a ski condo in Colorado and arrived all the way to the closing table to discover that the HOA had not accepted the short payment that the seller's agent had indicated and as such was demanding that the short sale be re-approved with the HOA getting more of what they are due or else they will continue with the foreclosure process.

The unit has both a primary and a HELOC on it and then a lien from the HOA. I can't seem to find any resources that help me understand whether the HOA steps into position after the primary mortgage or whether the super lien (6 months of assessments ahead of all other mortgages) will only get the HOA their 6 months of assessments and then the primary mortgage and HELOC will get everything else. At the purchase price, the HELOC is not getting paid back in full and whatever the HOA gets is taken out of that amount. But if the HOA is second in line after the primary loan then HOA could get paid back almost all of what they are owed.

What I'm trying to figure out is whether the HOA is pushing towards foreclosure but would only actually be able to recoup 6 months of assessments. In which case the HOA should really take the current short sale deal as they are getting 18 months of assessments. Otherwise we're out another 30 days to get the short sale approval.

Thanks for any insight you all can provide!

Tim