Safe Harbor: Lender Liable For Pre-Foreclosure Assessments After Failing To Foreclose HOA Lien (FL)

A recent decision by the Florida Second District Court of Appeal in Ballentrae H.O.A., Inc., v. Federal National Mortgage Association, Case Nos. 2015-1025 and -1026 (Fla. 2nd DCA, September 2, 2016) has once again brought to the forefront the issue of the application of an association’s lien subordination clause to a mortgage lender post-foreclosure.  In 2013, two properties within Ballentrae H.O.A., Inc. (“Association”) were foreclosed by Federal National Mortgage Association (“FNMA”). For reasons unknown, FNMA failed to name or join the Association in the foreclosure actions. After acquiring title, FNMA requested estoppel letters from the Association. The Association issued estoppel letters demanding payment of all delinquent pre-foreclosure assessments due to FNMA’s failure to foreclose its lien.     Read the article………….