So,....once I miss a payment I can:

[walkwithme]

Okay, I've decided I'm going to walk.
Once I miss my first payment I can then

1) cancel my house insurance?

2) stop paying the house taxes?

3) stop paying my $15 per month HOA dues?

Also, I have another question about starting the listing for a short sale. I just read something about my bank can start the foreclosure process after 90 days of no payment. If my goal is to stay in the house rent free for as long as I can should I wait until 90 days to talk to a real estate agent about listing the house for a short sale?
Thanks in advance for all replies.

[AZChick]

Good questions...I'd like to know the answers. What happens if you stop paying your HOA dues, can they come after you, or is that all tied into the foreclosure and disappear once the bank takes the house back? I'm assuming you'll get a lien against the house, but once it goes to the trustee saled then what? Is it on your credit report? Also, if you cancel your insurance, will the bank immediately pick it up and buy new insurance? I've heard with short sales you are forced to buy expensive home insurance....

[cactus77727]

Most of the recommendations I've read were to keep paying the HOA so the HOA won't come after you for that. $15/mo isn't too bad. I was told my property taxes are the lenders problem. And if your home owners insurance gets cancelled, to take out a renters policy for covereage of your belongings. Although when it comes to the insurance I don't think I'm going to bother. I'll begin moving my stuff once the Notice of Trustee Sale hits me, and I'll have a minimal presence in the home for the duration. I don't have many belongings and I can't afford any more expenses anyway.

[AZChick]

Once the home is sold at the trustee sale, I assume then the HOA fees are the lenders/new owners problem and not mine right? So just pay till trustee sale goes through?

[The Professor]

If your lender receives notification of a an impending lapse in the fire insurance coverage, they will obtain insurance and add it to the amount of your arrearage. You should protect yourself in the event this happens by obtaining a renter type policy to protect your personalty and also potential liability for on premises injury.

It is a good idea to pay HOA dues incurred prior to the foreclosure sale because you are personally liable and with most Covenants, Conditions and Restrictions, they contain a specific subordination of delinquent HOA dues to the first loan so their lien is wiped out for pre foreclosure sale dues. Once the foreclosure sale happens the purchasers at the sale (usually the lender) becomes responsible for their payment after the sale.

Real property taxes hold a superior lien position and while a owner may be personally liable, taxing authorities generally take the easy way out in terms of collection, recognizing that since the tax lien has priority over the lender's loan, delinquent taxes will eventually get paid by the foreclosing lender or other successful bidder at the foreclosure sale.

There is at least here in California only a recent limitation relative to timing the notice of default after a borrower has fallen behind has been included in the foreclosure process. Lenders must, initiate an attempt to contact the borrower 30 days prior to filing the notice of default to see if some sort of foreclosure avoidance measures can be taken.

Daniel

[J2911]

Good question. I just checked my WFB statement and noticed that my escrow acct balance is $4,500. That will more than cover the April Co Tax of $3400 and the Insurance pmt due in April. The balance is so high because WFB does their escrow adj once a year...so even though my property tax was adjusted to reflect a decline of $139K in value last year, I don't see any savings until April's statement...oh well, at least that won't be an issue. I plan on paying my HOA dues. Our development crammed Comcast Cable into the dues and their newsletter love to remind us of their right to foreclose, etc.
I'm still waiting for the HOA patrol to come and tell us that we are breaking HOA rules by parking my husband's work truck in our driveway! They actually sent us a letter a year after moving in telling us we did not get their approval before putting 4 stepping stones on the side of our house..we had to get our neighbor to sign a form saying it was OK with him. What a joke!

[cactus77727]

HOA's! How did we go from the castle doctrine, to where we are now? A friend told me her HOA wouldn't let her put up the Christmas lights after a certain date. Really? A deadline for putting up your Chistmas lights? I'd gladly put up with cars on cinder blocks and distasteful paint jobs, over living under HOA fascism. Good grief.

[walkwithme]

Wow, I guess I'm lucky with my $15 per month HOA. I live in S. Cal. and our neighborhood HOA is virtually inactive. Unless you do something egregious you'll never hear from our HOA. I can't imagine putting in 4 stepping stones and hearing about it like that. Fascism, I agree.