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FANNIE MAE BLACKLISTING
CONDO ASSOCIATIONS
 In March 2022, I wrote about the fallout from the collapse of the condo highrise in Surfside, Florida that killed 98 people. One change was an updated lender questionnaire imposed by Fannie Mae and Freddie Mac. We followed this with a webinar and warned that condo associations could get blacklisted.
Yesterday, the Wall Street Journal posted an article titled, "A Secret Mortgage Blacklist Is Leaving Homeowners Stuck With Unsellable Condos."
The article noted that owners across the country can no longer sell their condos because of a fast-growing mortgage blacklist. The first example they gave was a large association in Ventura County, California where lenders can no longer issue loans because it was blacklisted.
Fannie Mae is blacklisting condo associations that don’t have enough insurance or need to make critical building repairs. The writer found that the number of associations on Fannie Mae's blacklist rose from a few hundred before Surfside to 5,175 this month.
The Los Angeles wildfires and resulting insurance crisis is deepening problems for the condo industry in California. The author reported that Florida has more than 1,400 developments blacklisted. The next state with the highest number is California.
Fannie Mae wants condo associations to purchase insurance policies with full replacement cost. If they have less than 100% or have deductibles higher than Fannie or Freddie allow, they are blacklisted. Their requirements will ruin California's housing market. Wildfires, the insurance crisis, SB 326 (see next article), and Fannie Mae--how can it get any worse?
BALCONY REPAIRS ARE
IMPACTING LOANS
QUESTION: We had our balconies inspected per SB 326. All of our balconies were yellow-tagged, meaning some work was needed. We are in the process of getting bids. I am in escrow to sell my condo but no lender with Fannie Mae or Freddie Mac or any other lender will fund the loan until the work is done. Is it legal? Can anything be done? –Barbara S.
ANSWER: Yes, it is legal. Unfortunately, you have been caught in Fannie Mae's lending guidelines. The article I summarized from the Wall Street Journal chronicled the problem. All you can do is encourage your board to expedite repairs.
Recommendation: All condo associations should immediately make critical repairs to their common areas, even if it means imposing special assessments.
Q&A ON WILDFIRES
AND INSURANCE
 There were so many questions raised by attendees of our webinar on wildfires and the insurance crisis in California, that insurance specialists Michael Berg and Terri Guest joined me in recording a YouTube video answering those questions.
Below are links to the webinar and our Q&A video. In addition to the 1,600 who registered for our webinar, an additional 1,800 watched our webinar in the past two weeks. This is a timely topic affecting HOAs throughout California. We invite you to watch both videos.
 Wildfires & Insurance Fallout
Fire Insurance Q&A
DEPORTING
ILLEGAL IMMIGRANTS
 If you have been following the news, U.S. Immigration and Customs Enforcement (ICE) has prioritized the deportation of illegal immigrants with criminal charges or convictions.
The Community Associations Institute received reports that ICE agents visited association offices seeking information that may lead to detentions and/or arrests.
Regardless of one's political views on the issue, ICE agents have authority to arrest non-citizens suspected of committing immigration violations, so it is important that boards and managers know how best to respond to requests for information.
To help associations navigate ICE requests, CAI published "Guidance for Community Associations Handling ICE Requests." Their guide provides information on how to respond professionally and lawfully to ICE requests.
HIRING
EXPERIENCED ATTORNEYS
We are looking for experienced HOA attorneys for our offices in San Diego, Los Angeles and Northern California. Learn more about us here.
If you are interested, or know someone who may be a good candidate, you can contact Adrian Adams confidentially by email or by phone at (800) 464-2817.
Adrian, the webinar was terrific and you are the best and always have been. -Joseph O.
It was a great seminar. Thank you for hosting it. –M. Jones
Thank you for your information about the CTA. I am sure glad to see that we still have some politicians with common sense. -Irene N.
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DISCLAIMER. Our newsletter provides commentary, not legal advice. Boards needing legal advice should have an attorney review the facts and law for their particular situation. We serve as corporate counsel to California associations.
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