All Forum Posts by: Joe Henry

As someone who has specialized in short sales for 18 years, having closed hundreds with every lender and investor and situation possible, I can assure you you're not going to be able to get a short sale done on a loan that's not in your name. If the borrower is unresponsive, you're out of luck. 

Just enjoy your free place to live as long as you can. 

And this is exactly why I tell all my short sellers to continue to pay their HOA, and if they have to choose between the mortgage and the HOA, they should always pay the HOA first. The HOA will foreclose 10 times faster than the lender ever will and then the sellers are left with no options. The sellers don't have title to the property to dispose of it, but they still have responsibility for the loan. It's a dead-end situation for everyone.

Don't waste any more money on this. Take your expensive lesson for what it's worth and move on. 

Hi Joe, Hi from across the state. I've learned there are 2 people you pay...the IRS and your attorney. I often see on BP people trying to save money by turning to internet instead of paying a lawyer. I'm sure you've heard the saying "if you think it's expensive to hire a professional, try hiring an amateur". As a long-time banker in my previous life, I will tell you that you can send the same letter twice to a lender. One on plain paper and another on a law firm's letter head. Guess which one they will pay attention to. I think you have to ask yourself how much you have into the deal. Do you want to keep the property? Is it financially worth it? If so, pay the real estate lawyer and let them fight the fight for you. I've got a ton of experience in foreclosures and speak at conferences about it, but even my real estate lawyer is on speed dial. I hope it goes well for you. 

@Joe Henry so that's gonna be a lot more dicey than I know what to do with.  I will say that the "underwriter" is nothing more than a deal finder/ money cruncher so I apologize if that's the term you're possibly misusing.   Can I ask how you bought the property?  I can see it sounds like an auction but just verifying.

Was this deal via a trust ?

I ran into this when tehre were 3 HOA's in a community, a master hoa, one for the homes where this property was and another for the pool and amenities. That was a you know what trying to fight them which Ijust paid it as it was not clear if its each HOA that has super lien priority or them together - but it was not worth fighting the legal battle over a few grand.

Hey Joe,

Welcome to the wild world of Florida foreclosure auctions.
You're asking a great and very common question, so let me try to clarify it as simply as possible.

Under Florida law, the money paid over the judgment amount at auction is called a "surplus", and it follows a very specific distribution order:

1) Junior lienholders to the foreclosed mortgage get first crack at the surplus.

2) If anything remains, the previous owner (or their heirs) can claim it.

3) If no one claims it after 1 year, the winning bidder (you) can try to recover it.

4) After a few years, unclaimed funds eventually go to the Florida Department of Education.

Now, here’s the key part for your case:

The HOA lien is not a junior lien to the foreclosed mortgage unless it was formally recorded after the mortgage and named in the foreclosure complaint. But even if it was, they’d likely avoid claiming from the surplus. Why?

Because once the HOA tries to claim from the surplus, they're essentially saying: "We're a junior lienholder and subordinate to the mortgage."

That’s risky for them, they could be behind others in the queue and get nothing.
Instead, HOAs usually prefer to go after you, the new owner, because the lien survives the foreclosure and attaches to the property. They don’t need to fight over crumbs, they now have a solvent owner who can be held accountable.

It's important to clarify that in Florida, HOAs are considered "super liens", meaning they have special legal treatment. Even without being formally recorded, certain HOA claims (such as unpaid assessments) survive foreclosure and automatically attach to the property. This is part of why a detailed title search before bidding is absolutely critical in this business.

Also, keep in mind that Florida limits how much the HOA can collect.

-For standard buyers (like you), the HOA can only claim the last 5 years of unpaid assessments, due to the statute of limitations under Florida law.

-If the property was acquired by a bank (REO), then under the Safe Harbor rule, liability is capped at the lesser of 12 months of dues or 1% of the original mortgage.

So, technically, you can try to file a motion to redirect the surplus toward the HOA payoff, or seek reimbursement for the payment you already made. But:

-It's very unlikely the court will prioritize your claim over the former owner or other lienholders.

-The HOA almost certainly won't agree to it.

That said, you're not stuck. Here's where it gets practical: Negotiate!

You might be able to reduce late fees, interest, or even negotiate a payment plan. In my experience, many HOAs are open to it, especially when the previous owner was long gone and they had no hope of collecting. You’re a fresh start, and they might prefer some money now over dragging things out.

So while it's probably not worth hiring a lawyer just to chase the surplus, you still have leverage to work out a better deal on the HOA balance.

Best of luck, and congrats on your auction win, even with the headaches, it's often worth it!

For anyone on the west coast of florida right now, buckle up and hold tight you are in for a very wild ride and not in a good way at all.