Who Is Foreclosing? Frequently Asked Question.

The question may sound strange, but it shouldn’t. Who is foreclosing on the properties? Bank is not the only one that does it. While I am not an attorney, and can''t cover all possible scenarios, I am discussing my experience with foreclosure auctions in the Volusia County Courthouse, which I have attended in the last 3 years.

And, of course, in the overwhelming majority of cases the plaintiff is the Lender. But it is not the only foreclosing party. Here in Florida we also see Homeowners and Condo owners Associations, which foreclose for non-payment of Association Dues and/or Special Assessments.

What is the difference for an investor? And even is there the difference? Big time. Because even though the foreclosure does not wipe out all liens, usually it is not a big concern as overwhelming majority of liens will be wiped out in the foreclosure.

However, when the association forecloses on the property, they always foreclose subject to first lien. If there is a mortgage, then you do not wipe out this mortgage, and eventually the Lender can still foreclose on the property used as collateral.

I have seen investors, who would buy a property where the plaintiff is the association, hoping that then they can negotiate with the bank. Maybe they know the trick, something that I do not know, but there may be a surprise for these investors. The bank gave the money to a person, and their relationship is with this person. The fact that you now own the unit does not make you a part of this person’s mortgage, and does not give you the right to talk to the bank regarding compromising this mortgage.

You may end up with the Bank foreclosing on you, as the owner. No, you are not liable for the loan, nobody will go after you for the money, but the only way the Bank can do it in Florida is to foreclose and take the property back.

So, you may hurt your credit and end up losing whatever you bought it for at the foreclosure auction.