New Ruling Helps Nevada Homeowners Vs HOAs Yeah

Dated: 06/29/2017

Views: 144

Would you like to buy a house that sold for $281,000 for just $11,000? What a dumb question. Where do I sign up? And by the way, this is a real example.

Well, friends, that's what your friendly homeowners' associations could do. With impunity.

Nevada is the only state in the Union that gives HOAs a super-priority lien position.  Here's exactly what this means:

In the other 49 states that have laws that make sense, the folks who can foreclose on your house if you don't pay are the following, in the order they can foreclose:

1. The IRS

2. Your mortgage company (you know, the people who gave you the money to actually purchase your home)

3. The HOA

4. Any mechanic's liens (like if you didn't pay the plumber)

Here in Nevada, the foreclosure order is:

1. The IRS


3. Your mortgage company

4. Any mechanic's liens

Yes, ladies and gentlemen, if you don't pay your HOA dues, the HOA can foreclosure. (That's why I advise everyone to continue to pay their HOA dues no matter what.) 

In the past, an HOA could foreclosure for back payment of dues. This would extinguish your mortgage's company's lien of the hundreds of thousands of dollars they gave you like in the real example above. Previous court rulings said the HOA payoff extinguished all other liens. 

Until this week.

Here are the details of the court case:

Mortgage servicer Nationstar Bank was collecting mortgage payments on a Freddie Mac-funded loan. The original loan was for $271,000.  SFR Investments Pool bought the house for $11,000 by paying off its HOA back dues and late fees. Hey, I'm not a math genius but looks like a darn good ROI to me!

The wise Nevada Supreme Court judges ruled for Nationstar. They said financial institutions acting as servicers of federally-backed loans qualify for the Federal Foreclosure Ban. This federal law prohibits foreclosures on homes financed by Fannie Mae and Freddie Mac.

This is good news for Nevada homeowners, because as many as 65 percent of loans in Clark County came from Fannie or Freddie. Finally, a victory!

Image title

((hugs)) BETH Ellyn

THE Las Vegas Real Estate Concierge

State Managing Broker, Nevada

702.758.4318  Talk. Text. SMS. Video chat  Google Hangouts

@yale1974  Twitter

BA: Yale

MS: Columbia

MBA: L'ecole du Hard Knocks

Licensed in Nevada since 1996: I have previous!

When competence AND creativity count!

Latest Blog Posts

Balancing Risk And Deductibles

The benefit of insurance is to transfer the risk of loss to a company in exchange for a premium. The deductible is an amount the insured pays out of pocket before the insurance starts covering the

Read More

Summerlin Ranks Number 4 In New Home Sales Nationally In 2017

RCLCO, a real estate consultancy, ranks master-planned communities every year based on sales. Our Summerlin ranked No. 4 this year. Summerlin is located in the northwest corner of the Las Vegas

Read More

When To Avoid Flying In And Out Of Las Vegas McCarran Airport

Even though Las Vegas's McCarran International Airport is one of the most passenger-friendly airports on the planet--universal FREE Wi-Fi!!!!!, flying is still a hassle.  So I am going to help

Read More

Now You Can Gamble AND Recharge Your Device At Palace Station Las Vegas

Nothing's worse than realizing your device has less than 10 percent battery life left. And that's especially bad when you're on a hot streak at the Vegas tables!Station Casinos has fixed this,

Read More