AFSA Highlights the Impacts of HOA Superliens in Scotsmans Guide February 08, 2016 In the February issue of the Scottsman Guide’s Residential Edition, AFSA Senior Vice President Danielle Fagre Arlowe penned an article on the negative impacts of state laws and court rulings that give homeowners associations (HOAs) assessment liens true priority over lenders’ mortgage liens. In the article, Super-Lien Laws Are Trumping Lenders’ Collateral Position, Fagre Arlowe described the mortgage industry’s concerns with these “super lien” laws, which raise the possibility that a HOA could extinguish a lender’s interests through foreclosure and the lender may lose its collateral. The increased risk these super lien laws create for financial institutions could affect mortgage prices and availability, to the detriment of both the housing industry and homebuyers, Fagre Arlowe noted. Lender may also see a property for which it holds a mortgage sold to investors through an HOA super lien foreclosure for a fraction of what that mortgage is worth — just to cover the outstanding HOA fees. Fagre Arlowe called on policymakers to take a closer look at super lien laws and make some modifications to ensure that the negative impacts of super lien laws do not spread further. She highlighted a new Nevada law that provides some added protections for first lien holders, such as requiring that lenders be given advance notice by super lien holders of default and sale notice filings and allowing lenders to preserve their super lien status if they pay off the HOA super lien claim at least five days prior to a foreclosure sale.