This is a huge problem for almost every condo association in Southern California now. With almost every condo owner who purchased or did a cash out refinance after 2003 upside down, delinquencies in most condo associations are high and rising fast. Since almost no banks will lend on buildings with HOA’s in financial trouble, owners trying to short sale properties can’t close. Lenders are going to have to make exceptions to this rule or this problem will drive otherwise healthy HOA’s into the ground.
