In this case, the HOA filed a lien, foreclosed on the property, and took the property back. When it took title to the property in satisfaction of the owner’s debt to them, did the lien get extinguished? My attorney and my logic and recollection of property law classes in law school says it would. But, have you seen it happen, or seen anything to the contrary, in your experience?
HI Diane,
IN CA we have what is called the “one action” rule. When the HOA foreclosed on the property they have taken their one action and cannot pursue any type of deficiency judgment on that lien. They essentially purchased the property based on the lien position of their foreclosing lien and a senior lien or loan could foreclose and wipe them out.
Had they NOT foreclosed and a senior lender foreclosed and wiped them out then they could attempt to collect on the unsecured lien. Since they foreclosed on their lien they cannot pursue collection.
Thank you Michelle. You answered my question. Have a great day!