The ongoing corruption probe shows that if you're buying or selling a home or condo, you could be in serious trouble. Condos, neighborhoods and your home could all be in jeopardy because of a complicated, greedy scheme.
It comes down to a simple questionnaire. If your condo or house is going through complicated defect litigation, one form becomes your death warrant. No one will lend you money and no one will touch your sale. You're stuck because someone decided to sue. They get in, funnel sweetheart deals to construction and attorney buddies, and take off. It's slash and burn economics.
The experts are weighing in and they say the condo corruption case is going to hit your street hard.
"It's a lot of money that funnels through and it's a lot of people's lives that can be effected," said Sophie Lapointe with Five Star Mortgage.
Lapointe says recent problems with lenders Freddie Mac and Fannie Mae have tightened up the lending market. So if one of these questionable defect lawsuits goes forward, you're in trouble.
Question nine is what sinks the deal. Is the HOA part of any litigation? If yes, nine times out of 10, "You're dead in the water."
"Banks have backed away from financing when there's litigation going on in homeowner's associations," said State Senator Mike Schneider.
Schneider has been a critic of HOA's for years. He says the lawsuits essentially poison the condo or housing development, beginning with lower property values. Then, no one wants to get near it and no one will give you money to buy it. So sellers and buyers become victims with a house to sell and nowhere to go.
"They're easily preyed upon by professionals who want to get in and get their money," he said.
So in February, Senator Schneider will propose new, harsher legislation to hold HOA's accountable, "With that much money floating around and no oversight, it's kind of like what we're going through with wall street right now."
Until then, Lapointe says ask lots of questions, "How many people even pay attention to what's happening with their homeowner's association?"
Lapointe hopes people continue to apply for lending. That's one of the few ways out of this -- to try to sell off the condo and homes, even if those lawsuits have no merit at all.
Email your comments to Investigative Reporter Jonathan Humbert
Condos, neighborhoods and your home could all be in jeopardy because of a complicated, greedy scheme.
Senator Schneider will propose new, harsher legislation to hold HOA's accountable.
