Homeowners associations in Arizona can foreclose on a home after one year of missed payments or $1,200.
Every Thursday, investors crowd into a garage-size room on the second floor of the Maricopa County Courthouse in Phoenix looking for a deal.
Among these veterans, bidding goes fast for bargain properties placed in foreclosure by homeowners associations, often for as little as $1,200 in unpaid monthly dues.
Last spring, bidding started at $50,000 for a condo in north Scottsdale, about $8,000 more than the owner owed his HOA. Five minutes and 40 bids later, a Phoenix investor scored the property for $153,000, about half the going price of neighboring condos.
After the auction, the Salida Del Sol Condominium Association and its law firm were paid. The previous owner had bought the home in 2006 for $270,000 in cash. More than $100,000 remained from the auction.
Attorneys, foreclosure experts and other parties interviewed for this story could not say what happens to any money that is left over, or whether anyone must notify the previous owner about the proceeds.
The former owner could not be reached for comment.
Maxwell & Morgan, the law firm handling the Salida HOA, referred questions to Carpenter Hazelwood attorney Joshua Bolen, who is on the board of the Arizona chapter of the Community Associations Institute.
Bolen said he could comment generally about HOA foreclosures…
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