Legal Question in Real Estate Law in California

I own a property in a condo association. I have a $1.18 million first trust deed loan with Bank of America. The property is worth approximately $880,000, so I am upside down on my loan.

I am in payment default on my loan. I have also defaulted on my payments to the homeowner's association and I am behind approximately $6,000 in association fees. The association intends to foreclose on the property to collect their $6,000 association fees.

My question is:

if the association forecloses, do they have to pay the lienholder Bank of America?


Asked on 12/15/16, 7:51 pm

1 Answer from Attorneys

Well, yes and no. They do not assume your loan. However their lien for HOA dues is junior to the BofA lien. Accordingly, if they foreclose on the fees lien, they will take the property subject to the mortgage. If they then don't pay the mortgage, BofA can foreclose on the mortgage and wipe them out. Or BofA could foreclose first, wiping out the HOA lien. However, the HOA dues remain a personal liability you owe and the HOA can collect the same way as a credit card or any other loan, unless and until they elect to foreclose the lien, which it sounds like they would be stupid to do.

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Answered on 12/15/16, 11:31 pm


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