Q: What happens to an FHA loan on a property if the HOA forecloses through a judicial foreclosure and the property sells.
a condo is for sale at the sarasota county website. The Plaintiff is the HOA and legal doc's say the plaintiff's max bid is the exact amount of what is owed to the HOA for late fee's, etc. The Defendant on the case is the owner of the condo and also Secretary of housing and urban development. In the answer of defendant, on behalf of the US department of housing filing, It states that "with respect to the allegations of the existence of a certain lien arising out of a mortgage set forth in paragraph 15 of the said complaint, this defendant admits that we are the holder of a certain mortgage in the amount of $182 K and recorded in official record , etc." Because this Condo was purchased through FHA loan, if the condo sells at county auction for the HOA foreclosure, what happens to the HOA loan, does it follow the property, hence the purchaser of the condo takes on the FHA loan?
A: The FHA loan does not go away People buy condos at auction of the HOA lien foreclosure and then they are surprised when their to good to be true purchase price is too good to be true since there is still a purchase money mortgage that needs to be paid.
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