How to accelerate distribution of excess funds after foreclosure

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How to accelerate distribution of excess funds after foreclosure

Andy Gill
Member since 2020 · 12 posts · 1 vote

I bought an HOA foreclosure at auction and paid about 24k over the foreclosure amount. The attorney representing a mortgage lien on the house is being coy, saying that they'll send me a payoff for the full mortgage amount but the mortgage company hasn't hired them to go after the surplus funds. They've initiated their own foreclosure, and I'm sure I have months to sort it out, but I'd love to know how to get the mortgage company to initiate their claim so I can pay this off and get the house sold?

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Chad U.
Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
5y
Originally posted by @Andy Gill:

I bought an HOA foreclosure at auction and paid about 24k over the foreclosure amount. The attorney representing a mortgage lien on the house is being coy, saying that they'll send me a payoff for the full mortgage amount but the mortgage company hasn't hired them to go after the surplus funds. They've initiated their own foreclosure, and I'm sure I have months to sort it out, but I'd love to know how to get the mortgage company to initiate their claim so I can pay this off and get the house sold?

Since the HOA was an inferior position to the mortgage lien, the mortgage company is not entitled to the surplus funds. Those funds can be claimed by any other subsequent lien holders after the HOA, or the former owner if there are none.

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  • Chad U.
    Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Andy Gill:

    I bought an HOA foreclosure at auction and paid about 24k over the foreclosure amount. The attorney representing a mortgage lien on the house is being coy, saying that they'll send me a payoff for the full mortgage amount but the mortgage company hasn't hired them to go after the surplus funds. They've initiated their own foreclosure, and I'm sure I have months to sort it out, but I'd love to know how to get the mortgage company to initiate their claim so I can pay this off and get the house sold?

    Since the HOA was an inferior position to the mortgage lien, the mortgage company is not entitled to the surplus funds. Those funds can be claimed by any other subsequent lien holders after the HOA, or the former owner if there are none.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Chad U.:
    Originally posted by @Andy Gill:

    I bought an HOA foreclosure at auction and paid about 24k over the foreclosure amount. The attorney representing a mortgage lien on the house is being coy, saying that they'll send me a payoff for the full mortgage amount but the mortgage company hasn't hired them to go after the surplus funds. They've initiated their own foreclosure, and I'm sure I have months to sort it out, but I'd love to know how to get the mortgage company to initiate their claim so I can pay this off and get the house sold?

    Since the HOA was an inferior position to the mortgage lien, the mortgage company is not entitled to the surplus funds. Those funds can be claimed by any other subsequent lien holders after the HOA, or the former owner if there are none.

    exactly Chad  OP has got the order of priority out of Order. 

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  • Andy Gill
    OP
    Member since 2020 · 12 posts · 1 vote
    5y

    Thanks very much for the reply. I didn't have it backwards, I knew that the HOA was inferior, I was just under the impression that all liens would be satisfied before money went to the owner. It doesn't make any sense to me that the homeowner and not the mortgaging company would get the surplus, but that wouldn't be the first time that the government made laws that don't work how they should. Thanks again.

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  • Jake Boss
    Rental Property Investor · Charleston, SC · Member since 2019 · 14 posts · 2 votes
    5y

    @Andy Gill Hello Andy, just wanted to follow up and see how this ended up for you? Did the surplus funds end up to the previously homeowner? Curious after you purchased at the auction, did the 1st lien mortgage lender contact you immediately after they found out there was an HOA foreclosure? How long did you have to pay that off and were you able to negotiate a discounted rate on the note?

    Sorry for all the questions, I am looking into an HOA foreclosure currently and just had these questions myself. Any additional help would be very much appreciated!

    Thanks!

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