Why LM Funding?

According to LM Funding's statistics, delinquency rates in a random sample of condominium associations either formed through construction or conversion in Florida average 31.56%. Since FHA, Fannie Mae, and Freddie Mac require a delinquency rate of less than 15% in order to write a purchase money mortgage on a condominium property, the condominium market has entered into a "death spiral". Supply now greatly outnumbers the demand from cash buyers. Many are now left wondering, "what can an association's board do about the delinquency problem?"

Florida's statutory scheme affords associations the right to lien and foreclose upon units where owners fail to pay assessments. The statute requires 30 days notice to lien and another 30 days notice to foreclose. Owners receiving these notices typically get hit with 18% interest, $25 late fees and reasonable attorney's fees. Until 2008, the statutory pressure on owners to pay up resulted in less than 4% of lien foreclosure cases resulting in the association taking title according to one prominent collection firm. What has changed? As one former President Clinton famously remarked in his campaign against then President Bush, "It's the economy, stupid."

A small number of delinquent assessments can jeopardize an Associations ability to pay time sensitive obligations such as insurance, unexpected capital improvements, and other expenses. Larger numbers of delinquent assessments can force an Association to levy special assessments. The threat of special assessments deters condo buyers and lowers property values.

An Association that currently has some delinquent assessments will likely have more and more delinquent assessments over the next two years. The sooner LM Funding gets involved, the sooner delinquency issues can be controlled.