What should I do next since there's still a mortgage on the property? 5 Answers as of September 05, 2013

I bought a townhouse property that was auction at the court because the Association foreclosed on the property. There's a mortgage on the townhouse of $175K but the original owner passed away in 2012. I have the Certificate of Title and I am paying for the association fees every month. What should I do next since there's still a mortgage on the property? Am I responsible for that mortgage? Can I sell and/or rent the property? Please advice.

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Durham Jones & Pinegar | Erven Nelson
This involves issues of law and public policy that are evolving every day. In Nevada, the statutes seem to say that a foreclosure by a HOA wipes out other liens, including mortgages. Some lawyers are taking that position. Some courts have recently ruled that even though the statues seem to say that, they won?t enforce them. You could hire a good real estate lawyer to file a quiet title action against the mortgage holder.
Answer Applies to: Nevada
Replied: 9/5/2013
Danville Law Group | Scott Jordan
You can do anything you want with the property, so long as you are the legal owned of the property. You also are responsible for the mortgage since the foreclosure was performed by a junior lien holder.
Answer Applies to: California
Replied: 8/27/2013
Stephens Gourley & Bywater | David A. Stephens
The initial question is whether the HOA foreclosure wiped out the mortgage. If it did not, you can sell and use the property, but it will be subject to the mortgage and foreclosure unless you pay the mortgage.
Answer Applies to: Nevada
Replied: 8/27/2013
The Law Offices of Mark Wm. Hofgard, Esq.
The Law Offices of Mark Wm. Hofgard, Esq. | Mark Hofgard
The security interest of a mortgage survives the death of the obligor (former owner). Under C.R.S. 38-38-501, your title "shall be free and clear of all liens and encumbrances junior to the lien foreclosed." Presumably, the mortgage interest of the homeowner's creditor was senior to the homeowner's lien on the property. This should be verified. Under certain circumstances the HOA lien can be the senior lien, but not usually. You are certainly free to rent the property, but if the mortgage is still in place and senior to the HOA lien, in all likelihood you will need to pay the mortgage.
Answer Applies to: Colorado
Replied: 8/27/2013
Frank Law Group, P.C.
Frank Law Group, P.C. | David E. Frank
You may not be liable for the mortgage if the HOA lien that was foreclosed was senior to the mortgage. You should have a lawyer examine the foreclosure of the HOA lien to determine its priority under state law.
Answer Applies to: California
Replied: 8/27/2013
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