Homeowner association liens pose perils for condo buyers

Could some of the nearly 67 million Americans who live in communities governed by homeowner associations — condominiums, master-planned developments, cooperatives and others — face much tougher underwriting and higher interest rates when they apply for a mortgage? That is the looming threat from the mortgage industry in areas where state laws give community associations so-called super-priority liens on dwellings whose owners have not paid their assessments. Super-priority liens give a community association the power to initiate foreclosures and get first crack at the proceeds from the sale of a delinquent dwelling unit, ahead of the usual first-lien position held by the...