- 1). Contact your HOA when a notice of intent to foreclose is received. This notice is required to be sent via certified mail to the homeowner. At this point, it is a last ditch effort on the part of the HOA to come up with a resolution before foreclosure. While the initial amount of past due fees might be less than $1,000, legal fees and court costs can make stopping the foreclosure after the suit is filed twice as expensive. In many cases, an HOA is willing to work with a borrower if he can defend the HOA delinquency by proving a temporary hardship financially.
- 2). File a motion with the county recorder's office if the foreclosure is already filed by the HOA. The motion to defend or contest an HOA foreclosure will result in a hearing in front of a judge. At this point, the homeowner has an opportunity to produce documentation that challenges the validity of the HOA defaulted claim or provides sufficient proof of a temporary financial hardship. The judge can order the HOA to halt the foreclosure and accept a payment plan for delinquent HOA fees. If all else fails, bankruptcy is the next viable option.
- 3). File a Chapter 7 or Chapter 13 bankruptcy with a homestead exemption. If the property is the borrower's primary residence, a bankruptcy filing can halt foreclosure proceedings and provide the homeowner with a temporary stay, as well as force the HOA to forgive some of the defaulted amount and accept a payment plan. This step is the most drastic, to be sure, but it is an effective strategy for halting and defending an HOA foreclosure. However, if the homeowner does not abide by the ruling of the court with the bankruptcy and payment plan in place, the HOA can --- again --- seek a foreclosure filing. At that point, there is not a successful way in which to stop it.
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