A Las Vegas woman's home, worth almost half-a-million dollars, slipped away for just $30,000 at auction.
Nevada law allows homeowner associations to auction off houses when a homeowner falls behind on their association dues. It's called a Super-Priority Lien. And it means an HOA can sell your home out from under you and possibly your mortgage lender.
"It's insane. You can't even find words to say," says Nenita Neff.
Neff knew she was losing her four-bedroom, 2,400-square-foot Summerlin home.
She'd fallen on hard times due to a series of severe medical problems. She had family members pass away, the economy tanked and she filed for bankruptcy.
Behind on both her mortgage and HOA dues, Neff never recovered. So it was time for a short sale.
"Getting so close for us to materializing in getting it done," Neff said. "So that I get out of this nightmare."
Working with a realtor, Neff understood the short sale would provide her with $20,000 for relocation.
"We had a very serious buyer that has funds...$450,000 in escrow," she says.
But that would never come to pass. Neff was shocked to find out that while her short sale was in progress, her house went to auction. Sold by her HOA over unpaid dues.
The HOA says Neff never told them about the short sale. Neff conceded that her health problems and other issues were a distraction. County records show the house Zillow estimates at $430,000 was auctioned off for a mere $30,000.
The HOA provided the following statement:
“It is regrettable that years of resident non-payment of assessments and non-communication eventually leaves an association board no other option but to exercise the collection process put into place to protect all residents”
--Randy Ecklund for Summerlin West Community Association.
"I almost...it's like I'm gonna die," says Neff . "Oh my god! 30 grand? Oh Jesus."
Neff reached out to Frank Komorowski, the man who bought her house.
On the day of the auction, Neff says Komorowski was understanding at first. She thought he agreed to pick up a check at a title company to reimburse his $30,000 before the sale was recorded. But he never did that.
Then a month later Neff's realtor, Ron Hurst, says they met with Komorowski hoping to reach an agreement.
"For a settlement amount that he would take at close of escrow so he would sign off any interest in the property," Hurst said.
Hurst emphasizes Komorowski got the house legally but takes issue with Nevada law.
"And to put this poor lady in this predicament right now when it didn't have to be that way," says Hurst.
The way Hurst sees it, the Super-Priority Lien law is the problem. Neff can't move forward with the short sale and the lender can't require the new owner to pay the mortgage because he was never the borrower. While the lender can still technically foreclose on the house, they can't sell it because they don't have title.
And the new owner? He's not happy either.
"I bought it because I thought that there was a nice property and I wanted to be there and unfortunately it has been a nightmare," says Komorowski.
Komorowski says Neff's problems are not his fault.
"I was willing to work with her. And I tried to work with her," he says. "And I met with her and I talked with her," Komorowski said.
But bottom line he wants the house
"And if you look in my garage, you will see I need a larger space," Komorowski said.
Komorowski is still trying to evict Neff but the case is now in court.
The mortgage lender told us it's up to the homeowner to work out an extension with the HOA if they have a short sale in the works to prevent a house going to auction.
