In 2023, there were over 350,000 foreclosure filings across the United States. As a homeowner, the foreclosure process is one of the most horrifying things you can go through. In addition to the financial cost of losing your prized asset, emotional trauma can be too intense to bear.
If you own a home in an HOA in Columbus, OH, you might be thinking that you're shielded from the fangs of foreclosure. Well, while HOAs offer many tangible benefits, foreclosure is still a possibility, even when your home is fully paid off.
Read on to learn how to prevent HOA foreclosure.
1. Pay Your Mortgage
If you finance your home, you have an obligation to pay off your loan. Defaulting on a mortgage will have disastrous consequences, regardless of whether your home is in an HOA or not.
Most lenders give borrowers a grace period of about three months after a missed payment to bring their accounts into good standing, failure to which a foreclosure notice will be issued. This will set in motion the wheels of foreclosure.
However, there are foreclosure prevention options available. Depending on your circumstances, you can file for bankruptcy, seek loan modification, or file a lawsuit. It's important to hire an attorney to advise you on the best way forward.
2. Pay Your HOA Dues and Assessments
In an HOA community, you have more financial obligations in addition to your mortgage. These include HOA fees and other assessments, such as fines on late fees payments and rule violations.
This effectively means that even if you don't have a mortgage, there are expenses you must meet as long as you own the property. This begs the question: what's the worst that can happen if you don't pay HOA dues?
It needs to be said that HOAs are not in the business of foreclosing homes. They're not lenders.
In many cases, they'll strive to find other ways to collect the money you owe them. They can place a property lien on your home, effectively preventing you from transferring its ownership should you need to.
However, it's not unfathomable that an HOA can take an aggressive approach and pursue foreclosure, especially if you owe it a lot of money.
3. Communicate Openly
Falling behind on payments isn't something to be ashamed of. Our personal economic circumstances change from time to time.
But, when you're caught in the middle of a financial crisis, it's prudent to stay cognizant of your obligations. Communicate with your lenders and/or your HOA and let them know about your new situation. Sometimes we just need a few months to reorganize our finances, and with clear communication, you might just be accorded the time you need, averting things like HOA foreclosure.
Prevent HOA Foreclosure
You have homeownership rights in an HOA, but they're not absolute, especially when you owe money. HOA foreclosure is a real possibility, but there are many steps you can take to ensure it doesn't happen.
It's also important to remember that getting quality advice is key to your success as an HOA homeowner. PMI SCIOTO Metro is an association management company that serves HOAs and homeowners in Columbus.
Our CIA-certified team is ready to guide you on the next steps. Get in touch today.
