Why would carrying any bad debt make sense when LMF can provide non-recourse cash and free collection services?
An Association that currently has some delinquent assessments will likely have more and more delinquent assessments. The sooner LMF gets involved; the sooner delinquency issues can be controlled. Since FHA, Fannie Mae, and Freddie Mac require an Association’s delinquency rate to be less than 15% in order to write a purchase money mortgage on a condominium property, the condominium market has entered into a “death spiral” with vacant inventory in excess of the number of cash buyers. An Association can use LMF’s upfront cash to meet the 15% lending requirement thereby ensuring a market for its vacant units and protecting values for its owners.
