Real Estate Blog - Fannie Mae Condo Changes - Interest Rate/Hazard Insurance/REO/HOA Dues: "Fannie Mae is updating its delinquent HOA dues policy for the review processes to require that no more than 15 percent of the total units in a project can be 30 days or more past due on the payment of their condominium/association fee payments. This new policy applies to the review of both new and established attached condominium projects."
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That strikes me as pretty tough with an economy like this.
3 comments:
Perhaps the Feds will move in to criminalize one of CAI's cherished practices: re-characterizing homeowners assessment payments against their will and applying them to attorney fees, management company fees, etc. created out of thin air by these entities.
Note CAI's "Public Policies" statement in opposition to the Fair Debt Collection Practices Act. At no time does the organization mention that the FDCPA is the primary weapon to prevent this re-characterization scam. The list of states and courts mentioned in the "policy" illustrate the jurisdictions in which a homeowner has had to challenge the HOA and its agents on such practices. Those "isolated instances" one often hears about actually reflect the institutionalized unscrupulous practices of CAI as evidenced by its Public Policies.
Professor,
This blog post is actually quite timely, as just hours ago, experts in the field of community association law, were also able to voice the same concerns that you have made in your comments.
It appears to be harsh in the current economic environment, however, representatives of those agencies also encouraged attorneys not to let those requirements deter them from requesting approvals, etc. (ie. those numbers are more flexible than they appear to be and will be considered on a case by case basis).
Exceptions may be the rule in the current environment.
I predict lots of condo HOAs will tell the feds to take a hike whey they request financial records, particularly when compliance with the request could harm the marketability of condo units. After all, HOAs are often not inclined to disclose their financial records to their own members and they aren't going to willingly provide them to federal lending agencies, especially if it's not in their interest to do so.
Condos pose a substantial investment -- and often unsuitable -- investment risk for many purchasers and accordingly should be primarily regulated as investment securities and not residential real property.
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