*A peculiarity of Homeowner Associations (has) is that their lien is actually superior to the first mortgage. When you don't pay your HOA dues, a foreclosure by them should wipe out your mortgage, but it doesn't.

The reason is the CCRs by the builder creating the HOA are filed prior to the sale to the first homeowner. This makes their lien superior, but the CCRs almost always include a subordination clause. A bank wouldn't lend money to buy a house with a HOA if the HOA could foreclose and wipe out their lien. So, the subordination clause says that a first lien mortgage is superior to the HOA's subordinate liens.

This means your HOA, if any, can foreclose for non-payment, but receive the property subject to first mortgage and tax liens. When the first mortgagee forecloses, the HOA lien is wiped out.

Unless there was an oversight in the CCRs (HOA covenants, conditions, restrictions) that did not subordinate HOA liens to first mortgage liens.

A junior lien holder can foreclose, but the property would be subject to all superior liens. Tax liens, for example, are always superior. So, when a first lien holder forecloses, he gets the property subject to any tax liens.

Lately second lien holders buy the 1st lien at the foreclosure auction to protect their investment. It may have happened in the past but I never noticed until recently. Makes sense though. If someone had an 80/20 on a 200,000 house. That might mean the 20 was $40,000, so if the owner of the $40,000 note thinks they can sell the house for $190,000 now, they might be able to recover some of their investment. This also means that if the HOA forecloses on its lien the 2nd mortgage would be wiped out and only the 1st lien would need to be satisfied, thus allowing the HOA to recoup the dues and allow the HOA to then sell the property for a profit, and then use that profit to upgrade things around the neighborhood.

The foreclosure might also trigger acceleration of your first lien note, though, making the whole balance due. You would have to read the note for the first lien to see what consequences there might be.