Legal Question in Real Estate Law in California

I am facing foreclosure due to past HOA dues. I had a BK in 2010, and since then I do not recall having received a monthly statement, so it went unpaid. Out of sight out of mind. They filed a court case saying they will foreclose. I contacted their lawyer last Sept to work a payment plan, but he kept saying he couldn't get in touch with them. I tried numerous times last year to make payment arrangements, but never heard back. It got lost in the shuffle over the holidays and I recently reached out again to make payment arrangements. The balance is $10k. I offered to pay $200/month with a balloon for the balance after 12mos. They declined and said I need to make equal monthly payments of $800/month to resolve in 1yr. I cannot afford that right now, but know I can pay the balloon in a year. I am current on my mortgage and do not want to lose my house. I owe more than its worth, so they won't see anything from the sale. They say they are willing to write off the debt and get someone in who will pay. I am willing to pay more per month now during repayment then if someone new was here, so it seems silly for them to say that. Do I have any options here? I want to repay this debt, but they aren't willing to work with me as to what I can pay now. Thank you


Asked on 5/24/16, 12:28 pm

1 Answer from Attorneys

I'm afraid you don't have any legal options. They are not legally obligated to act sensibly. If you have not paid and cannot pay what you owe, they are entitled to foreclose. The only thing I can suggest is that you point out to them that if they foreclose they will have no buyers, because the foreclosure will leave the property still subject to your mortgage. No one will buy a property even for $1 if they will then become obligated to pay-off a defaulted mortgage, and they won't be able to refinance it because it is more than the property is worth. So now the HOA will wind up the owner and have to pay the mortgage or the mortgage lender will then foreclose, leaving them with nothing. So unless they can rent it out for more than the mortgage, plus their dues, plus property taxes, insurance, maintenance, etc., it will just cost them money to foreclose on you. If they don't understand that, however, all you can do is pack. Which, quite frankly, is not the worst idea if the property is still worth less than the loan balance on it even after the recovery in real estate prices. You'd be better off renting from a purely economic standpoint.

Read more
Answered on 5/25/16, 10:58 am


Related Questions & Answers

More Real Estate and Real Property questions and answers in California