Yes the Condo's have no reserves because not enough people are paying their required dues. This includes the EVERYONE, Banks, Fannie, FHA, Freddy, Investor owners grandma & pa.
Why because the markets are not addressing this issue let alone discussing it. So when someone says X cities condo market they are not including the financial health of the Condos. Hence 25 thousand Condominiums just lost FHA underwriting. Which means that what 200 thousand (+) units are not as sellable.
BTW I have to ask. In the Condo's that are delisted and FHA is the owner via default of their note holder. How is FHA going to sell their units if they cant finance them?
This will be the same undoing for all the Condos in the US that are required to recertify with Fannie, which they where by eoy 2010. If the condo is not getting all the assessments in the checking account they are not paying all of the bills.
The budget of a condo (if it was done right) is a line by line numeric rendering of the cost to run their condo. Each line item corresponds to an obligation sited in the community documents that is payable to a vendor of some sort to carry out at x cost.
So right now FHA is asking about reserves and most communities are just trying to figure out how to keep some utility or another from cutting them off. All they while they face fines from authorities on all levels for not doing such and such mostly caused by not having the funds to do it in the first place.
We need to have an adult conversation with everyone Agencies, Congress, Communities, Developers, Lenders, and anyone else that feels they have meaning ful input to the realities that these Condo's face aka State of these Communities
BTW if your a Condo and what some help with Community Collections on Past due assessments try something besides lein & foreclosure to solve this issue and help reward those that are paying on time.
