Posted: Mar 2, 2010 8:35 AM by Associated Press
The Senate is moving to stop what some lawmakers say is a manipulation of foreclosure sales that's depressing home values.
Junior lien holders, such as homeowners associations, can try to collect money owed by foreclosed homeowners. They also have the right to buy a property after it is auctioned off at a foreclosure
Republican Sen. Kevin Lundberg says some HOAs have been selling their lien rights to speculators who have no interest in collecting debts. Instead, he says, they use the rights to buy properties after an auction, lowering selling prices and depressing surrounding property values.
The Senate gave initial approval Monday to allowing foreclosure buyers to pay off the debt owed to junior lien holders in order to remove their claims on the property.