I’ll preface this post by saying that my comments are mere conjecture… so far:

If you live in a community, chances are good that at least one homeowner is in the process of losing their home.  The HOA is unlikely to recoup any monies since the mortgage company holding first position on the deed will extinguish all subordinate claims.  And banks are the worst homeowners.

I have watched as a Bank foreclosed on a homeowner, refused to pay HOA dues, then foreclosed on themselves to avoid paying any of their debts.  The legality although dubious was not worth the Community’s resources to challenge, although I believe we lost more than 4 grand. Additionally, the neglected home is sold at significant discount to the least qualified candidate.  Any board knows that 1 or 2 foreclosures can have drastic consequences.

Is there another way?  With decisive action can a Community control the foreclosure process to their advantage?  Is it conceivable for the Board to purchase the home from the Bank even before a short sale listing?  The Community by investing in their own community has prevented unconcerned outside players from acting against the neighborhood’s interests.  Obviously there is some risk involved; the home needs to be improved to market condition, but who is better informed on homes values in the neighborhood than the board?  If the home sells for market value to a solid homeowner, then breaking even on the project could still be considered a success.  There might even be a little extra for… Reserves.