HOA Responsibilities on Foreclosed Houses

• HOA fees are still a problem during foreclosure.condo in sun image by jimcox40 from Fotolia.com
  
  Homeowner's association (HOA) responsibilities do not cease just because your house is being foreclosed on. The HOA must be specifically dealt with during your foreclosure proceedings in order to protect you from being in default or hurting your credit even further. The HOA is something that can be easily forgotten or overlooked during the process, which is why you should know your rights.
  
  

Owner is Responsible

• Different states have different rules on how long it takes to foreclose on a home. During that time you should contact your HOA to find out how the organization typically deals with foreclosures. Until the home is completely foreclosed on, you are definitely responsible for all of your HOA dues and potentially still responsible after foreclosure. If you do not pay them during that time, your HOA can not only go after you for the money but also assess fines based on your agreement with the HOA.
  
  

Adding to the Bank Debt

• Some HOAs will allow you to pin your assessments and dues from the moment you began the foreclosure process to when it is complete with the defaulted mortgage. For this to work, you have to let the bank know your intentions. Since you are already defaulting on your mortgage, the bank may be unwilling to add to your already unpaid balance, depending on the current market value of your home compared to what is currently owed on the property. The bank may let you take out a second, smaller loan to cover your fees during the foreclosure process, which you can pay back over time. If this is the case, your better option is to continue paying the HOA until foreclosure is complete as it will be less costly in the long run.
  
  

HOA Forgiveness

• Unfortunately, even at the completion of foreclosure, your responsibility might not be over. Most HOAs require that dues be paid until the home is resold. The bank is not responsible for these costs unless your deed was written with that situation in mind. You can attempt to deal with your HOA and ask for forgiveness of such monies. In this case, the HOA might give you a certain grace period. This could get you out of dues for three or six months depending on the association's decision.