Two law firms announced they obtained copies of Fannie Mae’s secret “Condo Blacklist” and are making the information public.
The blacklist, formally known as Fannie Mae’s “Condo Unavailable Projects and Phases Report,” is a confidential database of buildings that the GSE won’t back loans for, largely due to maintenance or financial issues. It has been maintained by Fannie Mae for at least two years.
Rumors have long swirled that the list existed, but it was previously only available to lenders. Because of this secrecy, condo owners and applicants who were rejected for traditional conforming loans or refinances were often not given a reason why.
“I’m a little surprised how a quasi-governmental agency is not completely transparent. They really should be,” Dennis Eisinger, a condo attorney in Hollywood, FL, told the Miami Herald. “It’s incredible that this issue of secrecy is there.”
Condo owners who aren’t aware that maintenance issues, for example, have blocked them from loans have no opportunity to make the necessary repairs.
“In practice, owners of units in blacklisted communities seeking to refinance, or a potential buyer seeking to obtain a mortgage on a unit, would not be able to borrow from traditional banks or mortgage lenders that seek to ultimately sell their mortgages on the secondary market,” Leigh Katzman, Esq., Founding Partner at Katzman Chandler, noted.
The list has reportedly grown since the deadly collapse of a condo building in Surfside, FL. That condo was included on the list, and noted to have “significant deferred maintenance” including “water infiltration, which is causing deteriorated mortar joints and cracking.”
The two law firms, Florida-based Katzman Chandler and Massachusetts-based Allcock Marcus, have created a website to combat this issue. Condo owners and board members can use the website, CondoBlacklist.com, to find out if their building is impacted and why.
If so, the website will also recommend ways to get off the list. The firms will also offer their services to any affected owners who want to take legal action.
Both Fannie Mae and Freddie Mac have promised to make the information public via a web tool for condo homeowners’ associations, but that won’t be available until Q3 2024.
