Foreclosure activity is picking up across the country. In 2025, foreclosures jumped 14 percent compared to the prior year, and the first quarter of 2026 showed a 26 percent year-over-year increase. While not every community is feeling the impact equally, the trend is a signal for HOAs and condominiums to review their readiness now, before delinquencies potentially rise in their own neighborhoods.
Rising foreclosures create complications for HOAs pursuing their own collection efforts. When properties go to foreclosure, lenders and other creditors with liens stand ahead of HOAs in the payment line. As foreclosure activity increases, some properties are selling at auction for less than the mortgage and taxes owed on them—leaving HOA liens unpaid. Lower property values at auction sales also mean less money available to satisfy all creditors, making collection outcomes less certain than they have been in recent years.
Community association attorneys are already noting shifts in their caseloads. More lender-initiated foreclosures, additional court appearances, and increased defenses filed by homeowners in foreclosure cases are becoming more common. These trends suggest that boards should not assume their collection strategies will work as reliably as they have in the past.
The takeaway for boards is straightforward: now is the time to review your community's financial position, collection policies, and reserve adequacy. Preparing today—before delinquencies accelerate—puts your HOA in a stronger position to weather the changes ahead.
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