By MICHAEL BRAGA, The Herald Tribune – January 3, 2010
The continuing foreclosure flood is creating severe financial problems for condominium associations across Florida, and members are complaining that banks and mortgage companies are doing nothing to help.
Rich DiBello is the sales and rental director for Villagio Condominiums in Sarasota. Condo associations are facing financial difficulties, and many say lenders aren't doing enough to help.
In fact, condo owners say that many lenders are delaying foreclosures to avoid paying association dues. That is requiring associations to slash costs and cut amenities, and forcing owners to fork over more cash to keep complexes humming.
In something of a Catch-22, the financial problems at condo complexes also are prompting banks to tighten restrictions on lending.
Banks will not lend in complexes that have not set aside 10 percent of their budgets for reserves. They will not lend when more than 50 percent of the units are rented. They also will not lend where a few owners control too many of the units or where too many owners are in default on their mortgages and dues.
Those restrictions only make the crisis worse by driving condo values down and prompting more people to bail on their units, said Perry Corneau, a Sarasota real estate agent who specializes in condos. (More …)
