Typically, mortgage servicers are in a unique position of power when it comes to asserting lien position as long as the proper

title work and front-end activity takes place. With the exception of tax liens, virtually all other lien interests secured after the recordation of the mortgage lien are inferior to the mortgage lien. Laws enacted in 16 states and the District of Columbia spoil the servicers position of power, as community association liens are granted senior lien positions under certain circumstances involving non-payment of dues, these liens are called Super Liens. For all general purposes, these Community Associations have been able to affirm that they act as mini-government bodies in the day to day management of their properties and the association dues, are in fact a form of taxation. The super- lien statutes vary from state to state, but can be categorized into three main groups segmented by statute type. 1) Expansive Super-Lien Statutes Alabama, Alaska, Colorado, Connecticut, Minnesota, Nevada Statutes in these states are based on section 3-116 of the Uniform Common Interest Ownership Act (CIOA). Section (b) of the statute specifically states that, with some limited exceptions, community association liens for non-payment of dues are prior to all other liens and encumbrances on a unit. The lien amounts are typically (see table below) limited to six months of delinquent dues. The provision allows for the speedy foreclosure of the unit without the need for further notification or notice to borrower, but with reasonable notice given to all lien holders whose interest is affected.

State AL

Amount of Lien Six months prior dues Six months prior dues

AK

CO

Six months prior dues Six months prior dues plus HOA special assessments Six months prior dues Six months prior dues Six months prior dues

CT

MN NV WV

Special Circumstances Applies to first mortgage loans only Atty fees and costs included in judgment amount Applies to first mortgage loans only Atty fees and costs not included in judgment amount but are typically collected in the foreclosure. Applies to condos only Applies only to assessments due after 6/30/1992 Applies to first and second mortgage loans Atty fees and costs are recoverable through foreclosure Applies only to first mortgages recorded after June 1, 1994. Applies to first mortgage loans only Applies to first mortgage loans only Notice must be given to unit owner Notice of lien must be recorded in appropriate Land Records

Applies to first mor 2) Limited Super-Lien Statutes Pennsylvania, Rhode Island, Washington, Washington, D.C. Statutes in these states are based on CIOAs predecessor, the Uniform Condominium Act. The super-lien status applies only to unpaid condominium association dues and not to those due to cooperatives, PUDS, or other community associations.

State PA

Amount of Lien Six months prior dues Six months prior dues Six months prior dues Six months prior dues

RI

WA DC

Special Circumstances Applies to first mortgage loans only Atty fees and costs included in priority claim Applies to first mortgage loans only Atty fees and costs included in priority claim If the association seeks to foreclose by non-judicial process, the super-lien priority is not applicable. Applies to first and second mortgage loans recorded after 03/07/1991

3) State Specific Statutes Arizona o Super-lien takes priority of all liens except first mortgage liens Florida o Priority is limited to first mortgages taking tile by foreclosure or deed-inlieu on loans originated after 04/01/1992. If a condominium declaration made references to future amendments to the Florida Condominium Act, priority may be granted in cases where loans were originated prior to 04/01/1992. o The amount of the super-lien is limited to the lesser of a) six month prior dues or b) one percent of the original mortgage debt (only available if the first mortgage joins the association in the foreclosure action) o If the association initiates the foreclosure action, it may also recover attorney fees. Massachusetts

o Specific notice must be given to first lien holder in order for attorney fees and cost to be collectable at time of lien enforcement by the community association. o Line amount is limited to six months prior dues and first mortgages only. New Jersey o Super-lien priority is not limited to first mortgage, and is applicable to any prior lien. o Super-lien must be recorded prior to foreclosure action of a prior mortgage in order for priority to be effective. o Limited to six months prior dues o Super-lien status is effective only once every five years over the same mortgage. o Super-lien is only effective on loans recorded after 04/01/1996. Oregon o There is no six month prior due limit. Amount of lien can be for all unpaid charges. o Super-lien status affects all previously recorded mortgages o All the following conditions must be met: Lender is given 90 day written notice of unit owners default copy must be recorded in land records The notice must specifically state the intent to assume lien priority The lender has not already initiated foreclosure proceedings New York o Super-lien takes priority of all liens except first mortgage liens