Approval With FHA, Fannie Mae, Freddie Mac – The 10% Rule

In recent years lending institutions have become much more restrictive in approving and/or insuring loans for common interest communities. The FHA approval list has fallen by about 50% over the past 4-5 years. This has been due to a variety of reasons including new more restrictive reserve allocation requirements, owner occupancy standards and extensive documentation requirements. Impact on Market Appeal It has been our experience than many projects have seen declining marketability as financing options have dried up for Buyers. With rising real estate markets across the country this typically means the units in these community are seeing increases at a lower rate than units in communities which are approved… Read More

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Surefire Ways to Drive Your Association to Financial Ruin

Common interest communities are non-profit businesses and just like any business budgeting and financial planning are essential to the success and longevity of the business. What is everyday common sense with respects to businesses is often ignored for common interest communities. While this may seem like a harsh assessment of many Boards out there it is an unfortunate reality as is evident by the high number of special assessments and loans being taken out by Associations to cover expenses that are usually expected and have years or decades to properly fund for. The reasons for the lack of adequate funds can most often be attributed to the following scenarios.  … Read More

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Reserve for the roof? But We Just Replaced the Roof!

This was a response from a homeowner in a condominium community that I was completing a site inspection for. She was under the impression that there should be no reason to fund for the roof for many years since it was recently replaced. Unfortunately this is an common view among homeowners and Board members and is a big reason why many Associations remain at a poor funding level over many years. The Reserve Account is Not for Future Expenses It’s an important concept when completing reserve studies that the recommended allocation rate to a reserve account is not for the future; instead it’s to offset the current deterioration of common… Read More

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Communication is good…Solid Information Is Critical

In my journeys through the community association world I go to a lot of conferences, seminars, board meetings and read hundreds of articles about how to best manage and govern a community association.  It has almost become a cliché that communication is the most important aspect in managing an association.  While I don’t disagree I also believe that information and facts are just as important and it is a commodity that is sorely lacking. Every day I am astounded about how little information boards of directors and management companies have regarding the status of their associations, specifically rosters of owners with proper addresses phone numbers & contact information, aging of… Read More

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Help Your Community And Help Your Neighbors By Reporting Delinquent Owners to Credit Bureaus.

A recent study conducted sponsored by a major credit repair firm and conducted by Harris Poll asked specific questions related to what people understand about credit scoring, how they are arrived at, and the information that is taken into consideration to determine them. The study revealed some surprising information.  Eventhough credit scores affect Americans in many important ways including the price they pay for credit and insurance many people are mis-informed about the entire process.  This is shocking as your credit score can not only affect your ability to get credit but also impact on your ability to obtain employment. By not understanding how credit scores are formulated consumers could… Read More

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HOA & Condo Association Collections: How to Collect Unpaid Fees

Note: This article can relate to all community associations but some parts are Florida specific. As part of a community association, it’s common to encounter those one or two owners (or more) who don’t pay their community association fees. Unfortunately, the repercussion of those owners who don’t pay affects those who do. Reliable paying members of an association could face increased fees, special assessments or reduced spending on community maintenance and amenities. Usually in this situation the community association has to enforce the community association’s policy to establish consequences for continued non-payment and for that matter chronic late payments. The Consequences Of Delinquencies To Community Associations Non-payment of community association… Read More

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The Six Ways a Delinquent Unit “Settles Out”

When interviewing a new service provider for an association, one of the first questions asked by the board of directors is: “How long is your contract for?” For most vendors, there is an absolute beginning and a defined end to their tenure as service providers, but for a collection solution, this is a much harder question to answer. If the board of directors is satisfied with their choice of collection solutions, whether  it is an attorney or a collection agency and they do not dismiss them, the end of the agreement for services is almost impossible to predict because it depends exclusively on when the delinquent units “settle out.” Before… Read More

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Condo & HOA Collection Calls…How To Help The Debtor

Calling debtors is always a difficult and sensitive task especially for those people who are delinquent on their Condo or HOA maintenance fees. People are very sensitive about their homes, as they well should be, and calls of this nature can be very disturbing. However, in order for a community to be able to operate properly everybody has to pay their fair share. So how should a call like this sound like?   The most important thing for a professional collection caller to know are the rules that are established by the Fair Debt Collections Practices Act. Any company who is making these calls must first put the caller through… Read More

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Condo & HOA Collections…Can We Sound The All Clear?

  With the economic recovery in full blossom it would seem that community associations are out of the woods and happy days are here again.  Sorry, but no.  You may see new projects popping up all over and prices on the rise but if your association was established before 2013 chances are you are still plagued with delinquent owners, saddled with doubtful debt and are low on reserves.  In other words your association lacks the financial vitality it should have in order for it to be a worthwhile investment.  Curb appeal and amenities aside buyers are now more cautious and considering how financially robust the association is before they make… Read More

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Technology Changes the Industry

Technology Changes the Industry Advances Tackle Common Management Problems By Craig Huntington, President, Alliance Association Bank When I started my association management company in 1980, we kept the account history of our homeowners on ledger cards and wrote checks using a “One Write” system. We really were pushing the envelope when we decided to use a Polaroid camera to take pictures of violations. In 1981, we took the plunge, spending $4,000 for an Apple III with all the necessary components. Things certainly have changed. Today, my Treo PDA phone has more RAM, storage and computing power than that old Apple III. It’s also one-twentieth of the cost, counting inflation. In… Read More

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