Hey Chantal, I’m not an attorney, so this isn’t legal advice, but I’ve spent quite a bit of time researching titles and lien priority for foreclosure auctions here in Florida.
The main thing to understand is that Florida law doesn’t care what type of lien it is, what matters is which one was recorded first. That order of recording decides who’s first in line. So if the HECM (the reverse mortgage) was recorded before the HOA’s lien, then it’s the senior lien, and it stays attached to the property even after the HOA foreclosure. The HOA can only foreclose its own claim, but it can’t wipe out any lien that’s ahead of it in priority. The buyer at the HOA auction would take title subject to that HECM, meaning the lender could still foreclose later to recover what’s owed.
If, for some reason, the HECM was recorded after the HOA lien (which is rare) then it could be wiped out, but again, that depends entirely on the recording dates, not the label or the type of loan.
That’s why I always recommend checking the county records carefully and, even better, having a foreclosure attorney look over the title chain before bidding. It can make a huge difference between buying a great deal or inheriting a big hidden mortgage. So please confirm everything with a qualified attorney before making any move.
Hello Fernando,
Thank you so much for doing that. I did mix up the properties. I´m very sorry. Attached is all the information. I like researching (also older cases) it´s very interesting, and I try to learn more by doing that. In case you like doing this as well I don´t feel like I´m wasting your time, otherwise I would feel bad asking you doing that.
Thanks a lot!
Chantal📎 scan.pdf
Hello Fernando,
I highly appreciate your time for answering me in detail about the case I sent you. It confirmed my conclusion on that as well. It seems that the bidder took the risk of the unknown amount from that HECM (it was a real estate brokerage).
I wish you the very best, and it was a pleasure communicationg with you!
Chantal
Hello Fernando,
That´s fantastic - thank you for your referral. I will reach out to Jeff Harrington as soon as I find a new project, and I will tell him that you referred him to me. Btw. I don´t know if you are interested in past cases. There was an auction on November 13th. 12500 Dearborn Drive, Bayonet Point, FL 34667. Case # 51-2025-CC-001923-CCAX-WS.
I did a title search and there was a 300k HECM on the property. It was sold for 65k. I´m wondering if that loan really gets whipped off which I highly doubt. The market value isn´t more than 250k. That sale surprised me a lot. What do you think about that? In case you are interested to look into it – I´m just curious, but I definitely don´t want to waste your time with that. Have a great weekend and thanks a lot for everything!
Chantal
Hey Chantal, I checked the official Pasco records tied to that property and, at least in the documents I reviewed, I didn’t see any recorded mortgage or HECM. Everything I found was related to ownership transfers, Rodney’s life estate, the HOA lien, the lis pendens, and finally the HOA foreclosure judgment and sale. No mortgage showed up there.
If there really is a $300k HECM, it wouldn’t normally be wiped out by an HOA foreclosure, so it would be great if you could send me the book and page number (or instrument number) where it appears. I’d like to look at the
Hello Fernando,
thank you very much for that very insightful information which I highly appreciate. That´s exactly what I needed to know. Can you recommend a real estate foreclosure attorney? I´d like to use someone who was recommended to me and not searching on the internet for one.
Btw. I saw that you answer many questions in here, and I wanted to tell you that this is awesome and thank you for doing that!
All the Best!
Chantal
Hi Chantal, thank you for the kind words. I’m really glad the information helped. Sharing these experiences only takes a few minutes, but I know how valuable it can be when you’re on the other side trying to figure things out.
There are some very good foreclosure lawyers in this community, like Jeff Harrington. If that doesn’t work out, feel free to email me at [email protected]
and I’ll gladly connect you with a few others I’ve worked with and trust.
This is not a complicated case. Not many liens or refinances which conflict the understanding a lot.
This is the story: This property has a Reverse Mortgage (HECM) recorded in 2007. As part of the federal HECM program, two separate mortgage liens appear in the public records, but they represent one single reverse-mortgage loan structure. The first lien protects the lender’s financial interest, and the second lien protects HUD’s interest as the federal insurer. These are standard for HECM loans, not duplicate or separate debts.
Although the documents reference a maximum claim amount of $300,000, this figure is simply the maximum credit limit permitted under the loan, not the amount necessarily borrowed or currently owed. Reverse mortgages grow over time based on usage, interest, insurance premiums, and any advances made by the lender or HUD. For that reason, the exact payoff balance is unknown without requesting an official payoff statement from the current servicer.
Because the reverse-mortgage liens were recorded long before the HOA claim of lien, they maintain superior lien priority. As a result, the HOA foreclosure does not erase the reverse mortgage. Any purchaser acquiring the property through an HOA foreclosure sale will receive title subject to the existing reverse-mortgage obligations, which would still need to be resolved, negotiated, paid, or otherwise addressed afterward.
I must clarify: I am not an attorney, this is not legal advice, and my interpretation is only based on the documents provided.
