Many Homeowner associations are seeing budget problems due to the high rate of property foreclosure

Mornin' Neal !

You're right, this is going to be a problem - probably for all the other owners in the condo complex !
We have two investment condos, and just got notice our HOA monthly fees are going up  quite a bit.

...just seems to be $$ increases in every single bloody aspect of our lives these days !

Condos are even worse.  Fannie Mae won't even allow conventional loans in condo complexes if more than 15% of the owners are delinquent.  That sure makes it tough for the rest of us.

Neal... this is great information to put out there. This has been going on for 6 months, but seems to get worse. And to top it off, lenders are clamping down on this. I had one in MD that I couldn't do, because the associations budget was only 10% of what we needed for repairs and such. Again, people need to be aware of this.

Folks who buy foreclosures and short sales in HOAs and Condos might expect to see liens appear in the abstract too.

This is a serious problem because once a condo or HOA community loses FHA and VA approval, they have a hard time getting financing for sales. 

Folks who buy foreclosures and short sales in HOAs and Condos might expect to see liens appear in the abstract too.

This is a serious problem because once a condo or HOA community loses FHA and VA approval, they have a hard time getting financing for sales. 

More fall out from the mortgage mess

I'd like to second what Lenn says. :)

It does create problems. Higher rates for the non-defaulting members, harder financing, deferred maintenance, and hard feelings amongst the owners. We have a neighborhood association to maintain a shared well and road, and I'm hoping this does not become a problem for us.

WE are stating to this happen here in Omaha.  It's jus ta sign of the times.  Lets hope that the new administration's plan is a success.

Neal - My folks live in a HOAs and have been lucky in that everything is pretty copacetic down that way.  I have heard news of this popping up now and again.  This atmosphere is leaving no stone unturned.

It is very interesting to see what will happen with the HOAs.  People around here buy into them because of the idea that they protect the value of your home.  I'm sure they've never considered what would happen if a bunch of neighbors got foreclosed on. 

Condos are really tough though.  I've had two that are currently in litigation and one didn't work out.  That one has lots of other problems too but the lawsuit basically made it so the buyer needed 20%.

Neal,
This is a subject I was just discussing with some others in the housing industry.  When a budget was based on income from say 100 property owners and it diminishes to perhaps half of that---cash flow problems are not far behind!  Insurance, utilities, maintenance bills continue.

you know I thought about this a couple months ago and I could see this being a really big issue for some areas. Great reminder.

your friend in Charlottesville Virginia!

Neal,

It's getting to be an issue here in Vegas, too. If there are enough non-paying units in an association it can start a vicious downward spiral for the whole community.

Neal, Lenders are going to review Condo Budgets at the time of the Loan and if they do not have the necessary reserves the Loan will be denied.  This could be a MAJOR problem.