The Marcus Hour | Ep. 14 | 4.12.24 | SHINING A SPOTLIGHT ON THE FANNIE MAE CONDOMINIUM SECRET BLACKLIST

Join Stephen Marcus and Jake Marcus for this compelling episode of The Marcus Hour featuring prominent speakers, Boston Globe real estate investigative reporter Jim Morrison and Ed Allcock managing partner of Allcock & Marcus. We will delve into the Fannie Maie Secret Blacklist, a matter that has affected 570,000 condominium units and millions of Americans nationwide. During this enlightening session, you will have the opportunity to:

• Gain insights into how the Fannie Mae Condominium Secret Blacklist was uncovered.

• Understand the profound implications of this revelation on affected individuals and communities.

• Learn about the steps taken to unveil this secret and shed light on its consequences.

• Discover actionable strategies to navigate and potentially remove oneself from the Blacklist.

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Jake Marcus: Excellent.

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Jake Marcus: Alright. So we’re gonna start seeing people populating in.

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Jake Marcus: And

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Stephen Marcus: 9 59. So we have.

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Jake Marcus: 9 59, so we’ll let people get to their seats.

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Stephen Marcus: Plenty of seats, upfront.

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Jake Marcus: Don’t. Everyone don’t. Don’t everyone trample in at once?

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Jake Marcus: Yeah, so they’ll slow. We’ll just chit chatting right now, getting caught up on some of the blacklist stuff.

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Jake Marcus: Obviously, if you’re here today, hopefully, you have some background on what the blacklist is, what the unavailable list is.

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Jake Marcus: And it’s been a really hot topic for us our panel today, and that’s why.

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Jake Marcus: you know, it’s kind of something that we’ve been.

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Jake Marcus: We’ve been kind of navigating for the past few months.

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Jake Marcus: At a local and national level.

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Jake Marcus: And and I think today, we kind of can give an update on what’s been happening what currently stands today and what we can kind of expect in the future, but also kind of discuss the background.

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Jake Marcus: And we have a investigative journalist here today, Jim Morrison. The Boston Globe. Thank you for joining us, Jim. We we appreciate you having us.

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Jim Morrison: Thank you.

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Jake Marcus: And in general.

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Stephen Marcus: So from those from out of state. Yeah.

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Stephen Marcus: The globe is the Herald but with vowels.

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Jake Marcus: And and and and.

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Stephen Marcus: I’m not funny. I’m sorry.

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Jake Marcus: And I hope you don’t get Jim Morrison confused with the with the artist on the the doors.

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Jake Marcus: We could make a lot of puns with that. But we’ll we won’t knock down that door quite today. Anyways, back to the the main attraction. We’re talking about the blacklist. We’re talking about the Boston Globe.

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Jake Marcus: We’re talking about the press that Allcock and Marcus got Ed’s involvement in in bringing this blacklist to the forefront and kind of almost a a a a Federal government lawsuit, Alcock and Marcus versus United States of America. We’ll talk about that today.

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Jake Marcus: So we have a lot to talk about but I wanna kinda just give a very brief kind of how do we get here? Type of segment. And basically say, yeah, the blacklist, how did it even come to be? And what we’ll be talking about this a lot today? But kind of the short version. The blacklist has been around for for years.

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Jake Marcus: But has really become prevalent post surf side, and the Champlain towers collapse that unfortunately killed 98 people. After that occurred lender questionnaires became more strict.

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Jake Marcus: And what we saw from there is lenders essentially being afraid to lend to condos and associations. Thereafter.

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Jake Marcus: There was not, there was, there was less, or there were certain parameters that basically blacklisted you from getting a loan according to Fannie and Freddie. And

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Jake Marcus: basically, there’s this list that was not available.

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Jake Marcus: 2

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Jake Marcus: oh, we got another Steven, Marcus, double the trouble.

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Stephen Marcus: As.

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Jake Marcus: And

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Jake Marcus: and alright we lost them, and and anyways so the blacklist came out and prevented people from getting loans, and and made it very hard to secure monetary security and there was certain delineated reasons why you couldn’t get a loan, and we’ll get into those today. But

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Jake Marcus: you know it. It became something where condos were like what the heck I mean. I I didn’t even know I was on this list. Why am I not able to receive a loan? And then you kind of find out, after the fact

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Jake Marcus: that this list has been hid from associations from the public at large all Cock and Marcus has been able to secure an updated copy of the list. As we’ve gone through the months we’ve noticed it has steadily grown and and has grown even more so with certain certain revisions to the lender questionnaire with certain

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Jake Marcus: crisis, such as

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Jake Marcus: insurance crisis after the Champlain Towers collapse, a lot of legislation has come into play that have increased the parameters for structural integrity reserve requirements. You know th. There’s other certain reasons listed, such as commercial commercial

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Jake Marcus: condominiums, condotels.

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Jake Marcus: And if you’re in construction, defect, litigation, that’s another reason. But basically, all of these reasons have led to a a kind of perfect financial storm and and lack of financial security for a lot of condo association. So all that’s scary. Some list you wanna be on my dad, for example, he’s on Gq. Best dressed. That’s a great list to be on congratulations on that Steven.

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Stephen Marcus: Where did you get your awful sense of humor from.

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Jake Marcus: You don’t wanna be. You don’t wanna be on the FBI’s most wanted list

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Jake Marcus: and you don’t, and probably somewhere in between that you don’t want to be on the condo Blacklist

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Jake Marcus: thankfully. There’s ways to get off of it. We’ve worked through many associations and getting them off the list successfully. It’s a case by case basis. We have a and I’ll actually, I’ll put it in the chat because it’s I think it’s important for all

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Jake Marcus: for all attendees to be aware of property managers board members, even just unit owners know if your condo is on the list and and we have access to the list. We’re able to send out a quick kind of quick kind of yes or no what I do want to state very clearly. Even if you’re not on the list, it’s important to monitor. It’s updated nearly monthly.

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Jake Marcus: And we are. We are doing our best to get updated list as as quickly as possible. And

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Jake Marcus: now the biggest thing is what we have done, and kind of pushed Danny and Freddie to act.

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Jake Marcus: The there’s going to be more transparencies with these lists going forward.

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Jake Marcus: That’s a good thing that was not the case 6, 7 months ago, when we were working on getting getting this published in the Boston Globe, and Jim did great work with that and also just pushing, pushing Fanny and Freddie with foia request, which.

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Jake Marcus: if you don’t know what a foia request is, or info, or what what you’re kind of getting from, that

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Jake Marcus: you should know a decent amount about that today. So we have a jam packed session today at all. Cock, he’ll be the expert talking about the blacklist talking about a a little more of the finer detail. Beyond that 10,000 foot approach Jim will be discussing his interest in the list. Why, it’s important to raise awareness about the list and kind of the articles that he got going. So so let me let me get the let me get the slideshow set up.

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Stephen Marcus: Yeah. And I’m gonna make one more point about

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Stephen Marcus: what Jim did, because he he spent months on this.

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Stephen Marcus: and he can tell his own story, but I think

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Stephen Marcus: Tom Lenders told them. Oh, there is no list so I can’t give it to you.

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Stephen Marcus: But his article appeared in November

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Stephen Marcus: in December.

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Stephen Marcus: Danny, like 30 days later, Danny May and Freddie Mac both announced that the list was now gonna be

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Stephen Marcus: made more public, so associations could figure out whether they were on it. The problem with the list before is while you’re on the list.

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Stephen Marcus: Well, why, what we can’t tell you. Well, what do we do to get off of it? We don’t know. Don’t call us but what? Precipitated Fanny and Freddie Mac, changing their regulations. And providing transparency. We owe a world of gratitude to Jim Morrison.

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Jake Marcus: Yes, definitely. We appreciate what Jim has done, and and just to give you a little background.

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Jake Marcus: There’s there, says mug shot there, says, Bio quick bio on

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Jake Marcus: what he’s done with the Boston Globe, author of Home Buying and 30 min Guide for Prescript Perspective Home Buyers has spent the past decade contributing to Boston area newspapers. And he has also been a a dedicated to his family Home inspection business the 25 years prior to the Boston Globe. So thank you, Jim, for joining us any anything you wanna just add on to to start us off.

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Jim Morrison: No, that’s great, and thanks for having me.

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Jake Marcus: Absolutely happy to have you. And then Ed Allcock, the the managing partner of of Alcock and Marcus, a full service law firm with offices in Massachusetts, Rhode Island, New Hampshire, Florida, and Maine.

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Jake Marcus: a. A. A trained litigator one of the top litigators in New England. And and now managing our our fearless leader for all cock and Marcus, he makes sure Steven and I stay keep things moving with the Marcus hour. A a cow member his accolades precede him, also a a good golfer, as the masters who you got today.

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Ed Allcock: I I you know I’m really thinking.

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Ed Allcock: Zander Shockley.

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Ed Allcock: throw a dark, a dark horse out of there.

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Ed Allcock: that you know, Jake. One thing I do, wanna say is.

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Ed Allcock: is, when we started this sort of down the road with the Fannie Mae blacklist, you’ll hear you’ll hear a bit from me, and you’ll hear a bit from Jim Morrison.

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Ed Allcock: Like many ideas that I’ve worked on in the last 20 years.

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Ed Allcock: the this idea, I think, started with Steve. Marcus.

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Ed Allcock: Steve, Marcus said, hey.

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Ed Allcock: there’s this blacklist out there.

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Ed Allcock: And then.

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Ed Allcock: you know, he sort of

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Ed Allcock: you know the the the storm that followed was was I sort of sent off chasing it?

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Ed Allcock: Jim Morrison went off chasing it, but I really think

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Ed Allcock: the fact that we’ve been able to get as far as we have.

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Ed Allcock: Everything starts with an idea or or information

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Ed Allcock: and then even obtaining the blacklist. It all kind of goes back to Steve.

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Ed Allcock: Steve deserves a lot of credit for the idea.

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Ed Allcock: And then

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Ed Allcock: you know, for us to something to chase.

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Ed Allcock: And then the idea of

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Ed Allcock: just providing

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Ed Allcock: people across the country

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Ed Allcock: with information that the Federal Government refuses to provide. That’s one of the things we’ve done.

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Ed Allcock: Since we’ve been able to get at the list is.

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Ed Allcock: you know, I get emails from people in Colorado, Nebraska.

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Ed Allcock: Indiana.

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Ed Allcock: and we’re able to give them

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Ed Allcock: information

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Ed Allcock: to hopefully. You know, help them understand

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Ed Allcock: why they’re on the list and

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Ed Allcock: what they need to do to get off it.

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Ed Allcock: And you know, we’re going to continue to provide that service.

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Ed Allcock: even

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Ed Allcock: even after the Government

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Ed Allcock: catches up and has the ability to do it. I I think the Government said they were. Gonna they were planning on being in a position to do it

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Ed Allcock: in February. But

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Ed Allcock: I think they’ve since said

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Ed Allcock: They can’t get it up and running until September. So

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Ed Allcock: we’re going to continue to do that.

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Stephen Marcus: And Ed, your comments are are too kind, but I never blush so.

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Stephen Marcus: I’m not blushing now.

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Jake Marcus: Looks like you’re in Russia.

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Stephen Marcus: Maybe I am. But but but thank you. And Ed, you wanna lead it into the main events.

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Ed Allcock: Turn.

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Stephen Marcus: And Jim, and how he got involved in all this, and what his journey has been.

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Ed Allcock: Abs. Absolutely, Jim. You know we’d love we’d love our audience to hear from you.

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Jake Marcus: Before we get into it. I just want to point out that if you have any questions during the during the presentation, if we don’t get to them today. We’ll send out an email next week, but feel free to use the chat. Use the QA. Ask questions this. Is this. A lot of people don’t know about this. So or still, even though we’ve been trying to raise awareness. But get as many questions as you can, and we’ll try to answer them during or next week, so go on it. Sorry about that.

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Ed Allcock: So, Jim, why don’t you tell us how you found out about the blacklist?

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Jim Morrison: Well, I found out about it in the in your email. Newsletter. It was in April 2023. You’ve been mentioning it. And

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Jim Morrison: Steve

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Jim Morrison: ultimately reached out to me and suggested that it would be something that you know readers would care about.

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Jim Morrison: So I figured I had. You know you have to have the list without the list.

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Jim Morrison: There’s there’s just no story. So I called everyone I know in the mortgage business and asked them about it. Some of these people I consider personal friends, and every single one of them lied to me and said that the list doesn’t exist. They don’t know anything about it. It’s it’s it’s just a rumor. So

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Jim Morrison: I still was pretty convinced that it did exist. So I like you, Ed. I did a foia request to Fannie May.

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Jim Morrison: They didn’t respond.

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Jim Morrison: Then

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Ed Allcock: And and, by the way, for anybody that doesn’t know what a Foia request is. It’s a freedom of Information Act request.

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Ed Allcock: It’s interesting that

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Ed Allcock: that you didn’t get a response from Fannie Mae cause

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Ed Allcock: because I did.

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Ed Allcock: The response I got from Fannie May

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Ed Allcock: was

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Ed Allcock: that we’re we’re not a governmental entity. We’re a governmental, sponsored entity.

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Ed Allcock: and we’re not subject to the Freedom of Information Act. So

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Ed Allcock: I then sent a freedom of Information Act to

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Ed Allcock: FHFA.

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Ed Allcock: Which is the conservator

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Ed Allcock: for Fannie and Freddie.

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Ed Allcock: and

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Ed Allcock: their response was, Well, we don’t have any list. So it you know it. It was kind of funny that the ones that that had the list said, well, we’re not subject to it. The conservator for these 2 entities said, Well, we’re we don’t have any list. But go ahead, Jim.

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Jim Morrison: Well, they did the same thing to me, they said, if if you want something from Fannie May, you should just ask Fanny. May. We don’t have that list. Fanny may stone wall this, and ultimately they did tell my colleague, Larry Edelman, that it’s up to the lenders to tell people

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Jim Morrison: who’s on the list.

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Jim Morrison: But the lenders have signed a non-disclosure agreement, saying they can’t talk about it.

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Jim Morrison: So it’s clearly there’s a little subterfuge there which is.

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Jim Morrison: you know, kind of irks me. It kind of makes me dig a little deeper. Little harder.

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Jim Morrison: anyway. Fast forward about father’s Day morning. I remember waking up and checking my phone. And there was an email there from Steven

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Jim Morrison: with a very large attachment.

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Jim Morrison: And you would get you guys had. However, you did it, got a copy of the list, and then finally shared it with me. And that’s when we had a story.

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Jim Morrison: so

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Jim Morrison: and it’s important to point out to like you. You alluded to that. This list, you know, serves a purpose. There are properties that

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Jim Morrison: Danny May should not be underwriting loans for right. There’s just too much risk. That’s not what they’re in the business of doing. If there’s an enormous amount of the economy and development is some commercial enterprise, and if that business failed, then they’d have a hard time getting condo fees and keeping up the basement the the maintenance. So it makes sense that they’re some of these buildings are on the list.

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Jim Morrison: What’s weird is why it was secret, and we still don’t really know that. But that point, maybe moot by the third pit quarter. When they when they start making more public. So from that point I started once I had the

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Jim Morrison: the developments that were on the list. I started looking up owners, and people who are on the hoa

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Jim Morrison: to try to find out if they know why they’re on the list. It was hard to find people, and a lot of them didn’t want to talk to me, but

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Jim Morrison: of the

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Jim Morrison: of the buildings that were on the list.

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Jim Morrison: Some of them knew, but most of them didn’t know they were on the list.

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Jim Morrison: So

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Jim Morrison: the nightclick, said Larry. Edmund spoke to to Fannie May. They? They answered some of our questions.

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Jim Morrison: and we were able to publish that story which was great.

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Jim Morrison: The I just the numbers that I compiled here. Since

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Jim Morrison: surf side this list has been growing pretty fast. In May of 2023 there are 1,770 developments on it as of March fifteenth this year there are 2,840

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Jim Morrison: it’s a it’s growth of 6. It’s grown 60 in just over a year or not quite a year.

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Jim Morrison: The what else did I say?

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Jim Morrison: 40 of these developments are in Massachusetts. There’s a lot more in in Florida and other States.

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Jim Morrison: but a total of 510,470 condominium units, and counting that can’t be purchased

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Jim Morrison: in the Us by somebody using a government backed mortgage. And

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Jim Morrison: that’s important, too, because that primarily impacts lower income people.

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Jim Morrison: And there’s just no. And some of these buildings are.

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Jim Morrison: you know, believe they’re on there erroneously. It’s a result of

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Jim Morrison: whoever fills out the lender questionnaire and sends it back. And if somebody.

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Jim Morrison: you know.

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Jim Morrison: answer something erroneously, or misinterpret something. Once you’re on the list, you’re on the list for the wrong reason and in secret.

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Jim Morrison: So you you can’t get off a list you don’t know doesn’t exist.

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Jim Morrison: So I think the transparency piece is pretty important.

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Ed Allcock: I think I saw a statistic somewhere that said

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Ed Allcock: like 75% of all

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Ed Allcock: loans for single family residences, whether they’re condominiums or

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Ed Allcock: you know, non condominium residences are

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Ed Allcock: are backed by

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Ed Allcock: or underwritten with, Fanny or Freddie. So it’s

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Ed Allcock: it’s a pretty huge

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Stephen Marcus: I had heard 70%. But whether it’s 70 or 75, it’s a lot. And if you add faj into it, I think it might go into the nineties.

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Stephen Marcus: So all it leaves

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Stephen Marcus: the the local lenders who, if you have 30 million dollars a construction defects, are probably, gonna and that’s why you’re on the list are probably gonna look at it and say, we don’t want you either, because you have to have a plan for how all these repairs are gonna be made. But but anyway, there’s a significant amount of loans that

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Stephen Marcus: Danny and Freddie buy from local lenders.

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Ed Allcock: Did you get a lot of outreach or reaction to your a article, Jim?

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Jim Morrison: There were a lot of comments on the story that ran in November, but the biggest reaction was when Fanny came out Fanny and Freddie came out a month later.

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Jim Morrison: and I think I think there had been some efforts to to lobby them into making the list public already underway when I wrote that story, so I don’t think it was just

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Jim Morrison: my, the our story that did it. But it was a month later, when they said they were, gonna make the list more public, or, you know, accessible to at least the the hoas.

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Jake Marcus: So so, Jim. It was a initial article in November, correct.

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Jake Marcus: and that

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Jake Marcus: and that and then it was

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Jake Marcus: Nope. What was the date? Again?

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Jim Morrison: November one.

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Jake Marcus: Okay, and was it? And then there was another article.

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Jake Marcus: Oh.

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Jim Morrison: Like? Is it

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Jim Morrison: the one that I wrote.

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Jake Marcus: Yes. Correct.

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Jim Morrison: That was a month later when, after they announced that they were going to to make it public.

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Jake Marcus: And that was around. That was like first week of December that they announced that they were gonna make it public.

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Jake Marcus: So there was some, and I think we noticed on our end there was some reaction.

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Jake Marcus: Nationally.

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Jake Marcus: there was more more coverage across the country. And just more pressure to kind of make this less public was, that was that kind of the main goal with, you know, the exposure.

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Jim Morrison: Oh, yeah, definitely. I mean, you know, the government information doesn’t belong to the government. It belongs to the people, and outside of military secrets and criminal investigations.

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Jim Morrison: You know this. They shouldn’t be keeping secret lists.

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Stephen Marcus: And and Jim’s probably being too modest.

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Stephen Marcus: while we all think that this.

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Stephen Marcus: the story, should have gone also through the New York Times on the

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Stephen Marcus: La Times and the Washington Post

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Stephen Marcus: the Miami Herald did pick up on Jim Story and the Florida Sun Sentinel also picked up on the story, which was great, because so many associations are in Florida. But I think

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Stephen Marcus: Jim and I, at least, were a little disappointed

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Stephen Marcus: that people didn’t look at Jim Story or Jim and Edelman story and say, this is insane. How can government or quasi government be operating in the in in this manner. You. Basically, you gave the let’s assume you gave a loan

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Stephen Marcus: to somebody, and I I go into this last batch of affordable housing. But you gave a loan to somebody 10 years ago or 5, let’s say 5 years ago. Okay, now you decide. Oh, serviceide collapses. It’s tragic, is it? 98 people are killed. The settlement is 1.2 billion dollars. Anthony and Freddie rightfully so

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Stephen Marcus: tighten the vice a little bit and say, we’re gonna be tougher. And then the god the weather god sent out wildfires and hurricanes.

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Stephen Marcus: New York or New Jersey had an earthquake last week the only thing we didn’t see were locus and slang of the first born. But

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Stephen Marcus: think of that person

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Stephen Marcus: in that condominium

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Stephen Marcus: now multiply that times the 570,000 of the Condominium units that are affected that are on this list.

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Stephen Marcus: More likely than not, if 70 or 75% of those people got their loans from Tani and Freddie.

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Stephen Marcus: What they’re basically saying to those people is drop dead

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Stephen Marcus: we gave you a loan. But Surfside hadn’t collapsed then. So we really weren’t paying much attention that, buildings were getting older.

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Stephen Marcus: And how do those 570% of those 570,000 people

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Stephen Marcus: now sell their homes. You have. You have an answer for that, Jim?

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Jim Morrison: But or refinance.

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Stephen Marcus: Or refinance.

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Jim Morrison: Yeah, that’s it’s it’s a big issue. I mean, they would they have to do is, you know, one building a couple of buildings. I talked to their hoas.

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Jim Morrison: and they said deals were falling through left and right. They just couldn’t. If you anyone who had a you know, government back mortgage just can’t buy in that building.

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Stephen Marcus: And it, and and

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Stephen Marcus: the to for me to beat the point to death, which I always do. It seems that Danny May and Freddie Mac, and I think the culprit is the Federal Housing Finance Agency, which has been conservative. Danny and Freddie since 2,008, and Fdic. Was only involved from like 1,991 to 1994.

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Stephen Marcus: There’s no good reason why the the Fhfa is still conservative since Penny and Freddie now make money. But how can fh a.

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Stephen Marcus: Allow 570,000 current homeowners, if 70% have have government sponsored entity backing from Fannie Mae or Freddie back.

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Stephen Marcus: Those people can’t sell. Is it too bad, or we? We? We got stricter when we gave you a loan? We really shouldn’t have. We now realize that when buildings get old they’re like people. They die or start falling apart. Okay, I’m off. I’m off my soapbox.

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Ed Allcock: No? Well, I I’m gonna I’m gonna get on your soapbox for a second cause.

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Ed Allcock: The one thing when I when I think about this blacklist, and it kind of bothers me.

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Stephen Marcus: I’m gonna be taking my blood pressure while you’re doing.

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Ed Allcock: It it? It really bothers me that.

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Ed Allcock: But to think that

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Ed Allcock: the Federal Government

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Ed Allcock: is secretly telling

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Ed Allcock: private lending institutions

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Ed Allcock: not

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Ed Allcock: to loan

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Ed Allcock: to certain

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Ed Allcock: individuals.

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Ed Allcock: and then those individuals

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Ed Allcock: can’t find out

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Ed Allcock: why

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Ed Allcock: the Government is telling private institutions

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Ed Allcock: not to lend to certain individuals that to to to me it is.

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Ed Allcock: I don’t know when. When you think.

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Ed Allcock: when when people talk about the Federal Government and they say, Oh, the Federal go, you know you, you don’t you. You don’t realize

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Ed Allcock: the scope of this

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Ed Allcock: and and and it’s why it’s been great that

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Ed Allcock: Jim’s brought it to light

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Ed Allcock: just just again. Go back. The Federal Government is telling

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Ed Allcock: Goliath Banks

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Ed Allcock: not to lend to certain Condominium associations whether they’re in Massachusetts, Indiana.

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Ed Allcock: Florida, and that list is continuing to grow.

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Ed Allcock: You know. Just take that step back.

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Ed Allcock: The Federal Government

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Ed Allcock: is telling people

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Ed Allcock: telling banks don’t lend to XYZ. Condominium

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Ed Allcock: or anybody in it.

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Ed Allcock: And

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Ed Allcock: and when you think about that, that’s

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Ed Allcock: pretty wild, in my view.

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Jake Marcus: And and, Ed, we’ve we’ve probably spent a lot of

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Jake Marcus: a lot of hours just

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Jake Marcus: getting inquiries as to certain purchases at properties that we represent

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Jake Marcus: give an update usually non-billable updates regarding let loans what the status is.

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Jake Marcus: yeah, I mean, a lot goes into just

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Jake Marcus: the fact that this is being hidden. And and you know that that wh, when when homeowners are trying to buy this is coming into play. And yeah, it’s being hidden. So. I think that’s a good segue actually into

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Jake Marcus: our involvement. Ed’s involvement and your interest in the list, which I think has already been

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Jake Marcus: conveyed pretty well, but I think you know, can can you kind of talk about a little more about that effort to try and get the Federal Government to make this less public, I mean.

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Ed Allcock: Yeah, I I I did the same thing that Jim did with the.

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Stephen Marcus: And could I, could I ask you, and also to do one more thing? I I apologize for the interruption, but

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Stephen Marcus: and that carries through the rest of the hour

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Jake Marcus: What was your blood pressure? What was your blood pressure? By the way.

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Stephen Marcus: It was a thousand over 7 days. Do you think that’s a problem?

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Stephen Marcus: Yeah. What I was gonna say is, one part is asking for the list. once you have the sort of searchable database. I think people also have to hear that on this secret list

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Stephen Marcus: once it was in that possession. It states exactly why somebody’s on the list.

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Stephen Marcus: So if you go a little into because you could see the reason.

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Stephen Marcus: you might have been able to get an association off because they corrected the problem, or it was a mistake, and they never should have been on the list. To begin with.

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Stephen Marcus: anyway. Apologize for the interruption.

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Ed Allcock: Yeah, no, that’s fair.

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Ed Allcock: you know. So you know, like, as as Jake said.

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Ed Allcock: the the idea was to try to get as much

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Ed Allcock: information about it. We we tried foia.

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Ed Allcock: we considered, possibly filing a.

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Jim Morrison: One.

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Ed Allcock: We consider possibly filing a lawsuit.

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Ed Allcock: and we got stymied and and we’re told that there was no list

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Ed Allcock: until we actually were able to

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Ed Allcock: obtain the list.

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Ed Allcock: And and as Steve said.

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Ed Allcock: the

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Ed Allcock: the list is interesting because it ident it typically identifies

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Ed Allcock: some basic reason.

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Ed Allcock: Now I I don’t know who in the Federal Government is analyzing

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Ed Allcock: lender questionnaires

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Ed Allcock: to determine whether or not

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Ed Allcock: it should go on the list. And what that specific reason is

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Ed Allcock: but W, we’ve been able to use that and focus on that reason.

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Ed Allcock: Whether it’s.

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Ed Allcock: you know, something insurance wise, whether it’s something in the structure of the Condominium documents.

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Ed Allcock: whether it’s something that needs to be fixed

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Ed Allcock: to try to get associations

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Ed Allcock: off the list

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Ed Allcock: and and it’s it’s not always

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Ed Allcock: as easy as it seems.

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Ed Allcock: the first piece of advice I have to give

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Ed Allcock: is

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Ed Allcock: that associations and property managers have to be very careful now

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Ed Allcock: when they’re filling out

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Ed Allcock: lender questionnaires that, they’re asking very specific and pointed questions.

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Ed Allcock: since sir, side

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Ed Allcock: and and what I found is that that there are some properties, some property managers

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Ed Allcock: that are, you know, downloading

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Ed Allcock: for ease of reference

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00:31:43.970 –> 00:31:48.949
Ed Allcock: on you know, the the whole lender questionnaire thing. They’re downloading

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Ed Allcock: engineering reports, for example.

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Ed Allcock: directly into a database that a lender can go on and see.

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Ed Allcock: and the the difficulty with that is is, sometimes, when

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Ed Allcock: an Association gets an initial investigative engineering report.

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Ed Allcock: you know whether it’s part of a transition study or

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Ed Allcock: or investigation of some issue that may be ongoing that needs to be fixed at a condominium

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Ed Allcock: is sometimes that initial or the first couple of reports can kind of be. You know, they’re exploratory. They’re all over the place. Well, you gotta remember when that’s happening.

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Ed Allcock: Somebody at, you know, once once a lender sees it, somebody in underwriting is making an interpretation of

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Ed Allcock: the the 40 Page engineering report, and then somebody at the Federal Government is

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Ed Allcock: is looking at it as well, and then saying, All right. Well, there’s 14 or 15 things wrong with this condominium? Possibly.

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Ed Allcock: So you’re on the list until all 14 or 15 things

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Ed Allcock: get fixed So

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Ed Allcock: you know what I say is

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Ed Allcock: I think it’s very important

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Ed Allcock: when lender questionnaires are filled out nowadays.

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Ed Allcock: To have, you know.

335
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Ed Allcock: Take some care in doing it.

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Ed Allcock: take some care and what is being asked to be disclosed.

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Ed Allcock: and maybe have, you know, an attorney review of it.

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Ed Allcock: so that your association

339
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Ed Allcock: doesn’t inadvertently wind up

340
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Ed Allcock: on on the blacklist. And it’s and it’s not just.

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Ed Allcock: It’s not just structural

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Ed Allcock: issues, but but.

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Stephen Marcus: Can I? Yeah, good.

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Stephen Marcus: Just because I can’t control myself. Can I mention one issue? That’s gonna be that has become

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Stephen Marcus: very significant.

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Ed Allcock: Well, actually, I was gonna ask you that, Steve. So so I I’ve actually had.

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Stephen Marcus: But I might, but I might forget.

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Ed Allcock: I I’ve actually had.

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Ed Allcock: I’ve actually had a couple of property managers. Ask me.

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Ed Allcock: for example, about the

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Ed Allcock: insurance per unit deductible rule, which is like some some sort of like 5% rule.

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Ed Allcock: Vladimir.

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Stephen Marcus: And if it’s within a geographic area. So, for example, ice damming in the northeast

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Stephen Marcus: but

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Stephen Marcus: I got calls from attorney very good kind of mini maternity, Atlanta, Georgia, who said they were using that against them in Atlanta because it was burst hot water heaters, and they did not consider that something that was unique to the geographic area of Atlanta, and his response was.

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Stephen Marcus: Well, it does rain in Atlanta, but but the one. So that’s become an issue. But the one that but I have an answer for that one, the the guidelines, at least the northeast, say.

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Stephen Marcus: if you go over the 5%, and they do that by saying 50,000 per unit, 100 units. So whatever that amount is, that’s more than 5% of the stated limit. So they’re assuming every unit gets damaged. The answer is, the lender simply has to have the unit owner.

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Stephen Marcus: He had at least $50,000 a coverage a under their HO. 6. But the one that I was gonna mention that’s really bothering me is. And I ask every I know there are a ton of property managers on this call.

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Stephen Marcus: for all your properties. If you can speak to your insurance agent and your the associations attorney today. Or if you want free advice that’s what I do. Myself. (781) 413-5226

360
00:35:59.350 –> 00:36:08.029
Stephen Marcus: carriers have started ensuring old roofs at actual cash value and not replacement cost.

361
00:36:08.340 –> 00:36:12.109
Stephen Marcus: and the idea is well, we have a 15 year old roof.

362
00:36:12.905 –> 00:36:23.219
Stephen Marcus: If it gets destroyed they get a $500,000 roof versus a depreciated $100,000 roof.

363
00:36:23.350 –> 00:36:24.350
Stephen Marcus: The

364
00:36:24.880 –> 00:36:29.200
Stephen Marcus: a lot of policies now have that language.

365
00:36:29.460 –> 00:36:31.959
Stephen Marcus: I can tell you with certainty

366
00:36:32.060 –> 00:36:35.619
Stephen Marcus: that if you have that language just on the roofs.

367
00:36:36.200 –> 00:36:41.030
Stephen Marcus: all your documents, say 100% replacement cost is required.

368
00:36:41.060 –> 00:36:44.390
Stephen Marcus: Danny and Freddie and Fha all require it.

369
00:36:44.990 –> 00:36:54.360
Stephen Marcus: If they see if the mortgage under writers are shop enough that they’re really doing their homework.

370
00:36:54.440 –> 00:36:59.010
Stephen Marcus: They’re gonna look at the actual cash value

371
00:36:59.020 –> 00:37:01.019
Stephen Marcus: on the roof.

372
00:37:01.110 –> 00:37:03.139
Stephen Marcus: And the answer is.

373
00:37:03.410 –> 00:37:09.509
Stephen Marcus: you’re gonna end up on the blacklist because that makes the property ineligible.

374
00:37:09.540 –> 00:37:30.839
Stephen Marcus: and that frightens me. So please talk managers talk to your condominium insurance agents and and attorneys today, and make sure that you’re not in violation because the underride is a catching up that they have to learn this. So people at Bank of America and Wells Fargo.

375
00:37:30.840 –> 00:37:43.890
Stephen Marcus: and my concern is that the number next month. What to trip 3 months from now is gonna be 10,000 units on the 10,000 associations on the list.

376
00:37:44.380 –> 00:37:46.839
Stephen Marcus: And that’s the end of my second rant.

377
00:37:47.090 –> 00:37:47.650
Jake Marcus: So.

378
00:37:47.650 –> 00:37:56.120
Ed Allcock: And and and it’s not actually JI see Jake’s Jake Jake’s got the form up now. But but before he mentions that I want to say

379
00:37:56.220 –> 00:37:59.559
Ed Allcock: it. It it’s not as easy as you think

380
00:37:59.840 –> 00:38:07.139
Ed Allcock: to get off the list. I you know I’ll give. I’ll give a example. I represented an association

381
00:38:07.260 –> 00:38:09.300
Ed Allcock: that found they were on the list.

382
00:38:09.420 –> 00:38:16.030
Ed Allcock: Part of it was based on, I think, their reading of some prior engineering reports that it got uploaded.

383
00:38:16.220 –> 00:38:19.159
Ed Allcock: that it suggested there might be

384
00:38:19.956 –> 00:38:28.630
Ed Allcock: an issue with a couple of columns and beams. So so the concern was, oh, structural. It might collapse.

385
00:38:29.404 –> 00:38:33.425
Ed Allcock: And further investigation turned out that that

386
00:38:34.200 –> 00:38:35.540
Ed Allcock: that the

387
00:38:35.870 –> 00:38:40.140
Ed Allcock: the elements that were sort of being impacted

388
00:38:40.400 –> 00:38:51.640
Ed Allcock: were the sarcophagus, if you will, the the the beam in one case was encased in concrete, and the other column was encased in steel.

389
00:38:51.760 –> 00:38:56.700
Ed Allcock: and there was some water that came into the building it wept through

390
00:38:57.234 –> 00:39:12.990
Ed Allcock: the brick, and it had rusted some of the steel and spalled away some of the concrete, but these were just the encasements, the the beam, the structural beam, and the structural column were completely intact.

391
00:39:14.640 –> 00:39:26.969
Ed Allcock: And and we got another engineer to say it’s fine. It’s not a structural issue. It’s just a little sprawling of the encasement, the encapsulant, which which is a protective layer around the structural elements.

392
00:39:27.200 –> 00:39:29.840
Ed Allcock: And the response we got back was.

393
00:39:30.110 –> 00:39:31.720
Ed Allcock: but you got to stop the water.

394
00:39:32.955 –> 00:39:38.220
Ed Allcock: So so the difficulty it’s a perfect example of

395
00:39:38.330 –> 00:39:39.520
Ed Allcock: sometimes

396
00:39:39.680 –> 00:39:49.380
Ed Allcock: the the difficulty in the in the original engineering report that was submitted. There was a concern. Oh, this is structural. So that picked it up.

397
00:39:49.580 –> 00:39:56.260
Ed Allcock: And and then when we said, No, it’s not structural. They’re like, yeah, okay, that’s great. But it could be structural.

398
00:39:56.916 –> 00:40:00.249
Ed Allcock: If you allow the water to continue. So

399
00:40:00.280 –> 00:40:03.610
Ed Allcock: so it’s it’s not always as easy to get off

400
00:40:03.670 –> 00:40:06.619
Ed Allcock: the list and and I think

401
00:40:06.850 –> 00:40:11.560
Ed Allcock: I think the the underwriters and the government are

402
00:40:11.740 –> 00:40:15.580
Ed Allcock: being much more stringent once you’re on the list.

403
00:40:16.475 –> 00:40:18.499
Ed Allcock: especially if it’s for

404
00:40:19.120 –> 00:40:22.399
Ed Allcock: anything relative to the structure of the building

405
00:40:22.870 –> 00:40:26.569
Ed Allcock: to get off it. They want they want to see.

406
00:40:28.565 –> 00:40:30.939
Ed Allcock: You know no water intrusion.

407
00:40:31.180 –> 00:40:32.650
Ed Allcock: if possible.

408
00:40:33.670 –> 00:40:34.449
Jake Marcus: Yeah, so, so.

409
00:40:34.450 –> 00:40:37.370
Ed Allcock: Jake, Jake, why don’t you show us the the questionnaire a little bit.

410
00:40:37.370 –> 00:40:45.420
Jake Marcus: Yeah. So the questionnaire. And I think, Ed, you would agree. This is kind of this is how you end up on the list. This is the starting point. This is point a

411
00:40:45.845 –> 00:40:51.024
Jake Marcus: or point 0, basically, because this is when you’re filling it out before it’s submitted.

412
00:40:51.450 –> 00:40:54.320
Jake Marcus: as Ed and and and Stephen kind of both

413
00:40:54.938 –> 00:41:21.060
Jake Marcus: kind of hinted towards is that you wanna get your your team of professionals in? It’s not just bringing it. An attorney is a good starting point, but you know, we’re not gonna be able to do everything. We we might not know the insurance portions. We might we? We can’t do reserve studies. We aren’t engineers. So it’s important to bring in the right people in in Florida, for example, structural integrity

414
00:41:21.060 –> 00:41:37.380
Jake Marcus: and reserve requirements are going to be required by the end of this year. That’s statutory that’s required. That’s there. There’s no I mean, people are pushing back. But it’s that’s going into law. That’s not the case in Massachusetts, but the in Boston.

415
00:41:37.730 –> 00:41:38.080
Ed Allcock: That.

416
00:41:38.080 –> 00:41:44.254
Jake Marcus: There is certain facade requirements. So you have to abide by those you have to comply with those.

417
00:41:44.580 –> 00:41:46.429
Stephen Marcus: And that’s every 5 years.

418
00:41:46.460 –> 00:41:53.890
Stephen Marcus: And the the latest update on reserves on the inspections is New Jersey just passed something similar to Florida.

419
00:41:54.320 –> 00:42:23.010
Jake Marcus: And and it’s probably gonna be every state or jurisdiction just a matter of time as far as structural integrity facade inspections. Making sure you have all that in place, but also just a a get. An insurance person in that is the new. That’s that’s a huge crisis. Now, that’s gonna be that’s not going away anytime soon. Make sure you bring someone in. Get the proper insurance and and there’s other things that you can do.

420
00:42:23.360 –> 00:42:26.969
Stephen Marcus: Hey, Jake, can you scroll down to the insurance pat.

421
00:42:27.230 –> 00:42:32.919
Jake Marcus: Yeah. So so this is the condo questionnaire. You’re gonna see, this is what you should fill out with professional help.

422
00:42:33.446 –> 00:42:45.100
Jake Marcus: Page one is basic information. Page 2 is project completion. And and you know, if it’s a newly converted property.

423
00:42:45.687 –> 00:42:53.079
Jake Marcus: Then it gets into some of the financial information ownership information. Let’s see.

424
00:42:53.400 –> 00:42:59.799
Jake Marcus: talks about the type. And then page 5 is insurance. Is this what you’re looking for? Steven.

425
00:43:01.860 –> 00:43:03.322
Stephen Marcus: Yeah, they they’re

426
00:43:06.430 –> 00:43:07.680
Stephen Marcus: the

427
00:43:08.794 –> 00:43:12.449
Stephen Marcus: now it’s almost as big as this room.

428
00:43:13.503 –> 00:43:16.810
Stephen Marcus: They they used to have a comment there

429
00:43:18.080 –> 00:43:20.000
Stephen Marcus: that said,

430
00:43:22.490 –> 00:43:23.640
Stephen Marcus: The

431
00:43:23.660 –> 00:43:27.480
Stephen Marcus: the answer ask agent

432
00:43:28.162 –> 00:43:30.329
Stephen Marcus: is, is that acceptable?

433
00:43:30.530 –> 00:43:33.349
Stephen Marcus: So our response to that was.

434
00:43:33.350 –> 00:43:35.289
Jake Marcus: Contact contact agent. Right? There.

435
00:43:35.290 –> 00:43:36.060
Stephen Marcus: But.

436
00:43:36.380 –> 00:43:38.240
Jake Marcus: It says, do not enter contact agent.

437
00:43:38.240 –> 00:43:42.573
Stephen Marcus: Okay, that’s what I was looking for. So our advice

438
00:43:44.030 –> 00:44:10.369
Stephen Marcus: as being who we are, or maybe a little. Not so more was would tell all the property managers when they set that to us for review after they did their first try at it was, Don’t answer any of the insurance questions. Right? Contact agent, I said, but but it says that that we can’t. It says there’s nothing that says you have to fill out this form.

439
00:44:10.460 –> 00:44:15.150
Stephen Marcus: So you go to questions such as.

440
00:44:15.320 –> 00:44:19.880
Stephen Marcus: is your condominium insured for 100% of the replacement cost

441
00:44:19.890 –> 00:44:26.579
Stephen Marcus: unless you’ve done an appraisal an insurance replacement cost appraisal of the building.

442
00:44:27.060 –> 00:44:31.450
Stephen Marcus: Nobody knows if the stated limits of the policy

443
00:44:31.650 –> 00:44:42.470
Stephen Marcus: are enough to rebuild that building. If it went, if it went went down, and we don’t want volunteer board members who have a tough enough job

444
00:44:43.279 –> 00:44:50.169
Stephen Marcus: or property managers kind of many managers who just

445
00:44:50.709 –> 00:44:57.070
Stephen Marcus: put a ton of work into managing the property and the owners

446
00:44:58.720 –> 00:45:01.980
Stephen Marcus: the they’re not

447
00:45:02.090 –> 00:45:19.729
Stephen Marcus: insurance experts, and it’s not fair for the government or the government sponsored entities to be asking associations and managers to to give answers to very complicated insurance questions.

448
00:45:19.980 –> 00:45:29.499
Jake Marcus: And and something I wanna point out. So so that’s insurance is obviously a huge concept and and issue right now, this is crisis

449
00:45:29.750 –> 00:45:33.019
Jake Marcus: everywhere. I mean, it’s in Florida predominantly. But it’s

450
00:45:33.290 –> 00:45:51.969
Jake Marcus: it’s it’s it’s a big. It’s a big thing of a big issue. But another thing that I just want to point out the backdrop of this, as you can see, the addendum added December 2021, technically, so that it it became law this past, or it became. This was the temporary version.

451
00:45:52.440 –> 00:45:54.319
Jake Marcus: a permanent version

452
00:45:54.705 –> 00:46:07.520
Jake Marcus: became updated as of September of this past year. So September 2023, and I wanna show you and Ed had mentioned, yeah, you you need to look at more than just structural integrity.

453
00:46:07.610 –> 00:46:15.970
Jake Marcus: But the last 3 pages. So to put this into perspective. The backdrop, June 2021 was the Champlain Towers collapse.

454
00:46:16.220 –> 00:46:19.969
Jake Marcus: This addendum came in in December 2021.

455
00:46:20.030 –> 00:46:27.080
Jake Marcus: This became and that was temporary, and then it became permanent in September 2023. So that’s kind of the backdrop.

456
00:46:27.200 –> 00:46:31.109
Jake Marcus: if you look at pay. So this is a 8 page condo questionnaire.

457
00:46:31.220 –> 00:46:33.230
Jake Marcus: If you look at page 6,

458
00:46:33.890 –> 00:46:37.529
Jake Marcus: building safety, soundess structural integrity and habitability

459
00:46:38.070 –> 00:46:40.309
Jake Marcus: again, second page on that.

460
00:46:41.320 –> 00:46:47.370
Jake Marcus: a third page on that. So 3 pages on building structural integrity and habitability.

461
00:46:47.967 –> 00:47:05.249
Jake Marcus: All. As a result of, or basically right after the Champlain towers collapse, it gets into special assessments, it gets into it gets into outstanding violations of requirements. Zoning code just something to keep in mind. I mean, there’s so many factors involved and and different

462
00:47:05.756 –> 00:47:09.350
Jake Marcus: Parameters for being on the list, which I’ll show you in

463
00:47:12.180 –> 00:47:15.189
Jake Marcus: in this. How do I get blacklisted?

464
00:47:15.563 –> 00:47:20.899
Jake Marcus: But something to just really that’s not going away is structural integrity and making sure you’re

465
00:47:20.930 –> 00:47:28.560
Jake Marcus: you’re compliant with all of that. So I I don’t want to take away anymore. But make sure. Make sure you get the professional help before filling out.

466
00:47:28.690 –> 00:47:30.610
Jake Marcus: Before filling out these questionnaires.

467
00:47:30.610 –> 00:47:33.791
Ed Allcock: Yeah. So I I saw a question in the chat.

468
00:47:34.400 –> 00:47:40.320
Ed Allcock: which was, well, so do we. So do we still write in contact agent. I think the answer is

469
00:47:40.340 –> 00:47:41.830
Ed Allcock: probably not.

470
00:47:41.910 –> 00:47:44.310
Ed Allcock: but I think that you should.

471
00:47:44.310 –> 00:47:49.250
Stephen Marcus: Oh, my! My! My answer is but put it a bold

472
00:47:49.600 –> 00:47:50.480
Stephen Marcus: go ahead.

473
00:47:50.740 –> 00:47:55.049
Ed Allcock: I I I think I think the advice you’re hearing here is

474
00:47:55.510 –> 00:47:58.229
Ed Allcock: is, contact your agent

475
00:47:59.450 –> 00:48:02.400
Ed Allcock: and and and get the answers

476
00:48:02.620 –> 00:48:04.240
Ed Allcock: from your agent.

477
00:48:04.250 –> 00:48:06.480
Ed Allcock: and and even though it says.

478
00:48:06.530 –> 00:48:12.169
Ed Allcock: Do not write contact agent, they are looking for you to add the agents

479
00:48:12.730 –> 00:48:17.680
Ed Allcock: contact information. So you know, they may follow up with them as well.

480
00:48:17.840 –> 00:48:18.670
Ed Allcock: The

481
00:48:18.990 –> 00:48:22.293
Ed Allcock: to to to me. One other piece of advice.

482
00:48:23.420 –> 00:48:25.260
Ed Allcock: And I’ve already alluded to. It

483
00:48:25.680 –> 00:48:31.060
Ed Allcock: is this concept of when associations are getting engineering reports.

484
00:48:32.780 –> 00:48:33.820
Ed Allcock: I think

485
00:48:34.450 –> 00:48:39.680
Ed Allcock: part of the difficulty. And we’ve all been there is. When we see these engineering reports.

486
00:48:39.920 –> 00:48:41.880
Ed Allcock: they they

487
00:48:42.800 –> 00:48:44.779
Ed Allcock: they take a while to develop.

488
00:48:45.220 –> 00:48:49.180
Ed Allcock: So it starts out with initial investigation.

489
00:48:49.250 –> 00:48:54.139
Ed Allcock: And and maybe you know, 4 items are identified. And then

490
00:48:54.180 –> 00:49:06.589
Ed Allcock: it’s the second trip, or they’re a little more invasive. And then a couple of issues that might have been identified in the first report disappear and aren’t as concerning anymore. And something else.

491
00:49:07.477 –> 00:49:09.120
Ed Allcock: Comes to light.

492
00:49:09.460 –> 00:49:11.500
Ed Allcock: My concern with that

493
00:49:12.260 –> 00:49:14.280
Ed Allcock: is.

494
00:49:14.450 –> 00:49:21.359
Ed Allcock: if you know, and and 1 one way, I would say around, that is, if the Association

495
00:49:21.550 –> 00:49:23.490
Ed Allcock: engages a lawyer

496
00:49:24.040 –> 00:49:29.330
Ed Allcock: to have the reports delivered to the lawyer at the outset

497
00:49:29.410 –> 00:49:32.550
Ed Allcock: as attorney client communication, because

498
00:49:32.620 –> 00:49:35.819
Ed Allcock: because it’s an ongoing, developing thing.

499
00:49:35.970 –> 00:49:51.290
Ed Allcock: And then, ultimately, when it’s time to produce a report, whether it’s to another side in litigation or to a bank or the Federal government, it’s in final form. The W. One of the difficulties I’ve encountered is

500
00:49:51.350 –> 00:49:52.490
Ed Allcock: when you’ve got

501
00:49:52.650 –> 00:49:55.419
Ed Allcock: seriatum reports being

502
00:49:55.949 –> 00:50:00.040
Ed Allcock: delivered to the Government or the lenders and the underwriters.

503
00:50:00.120 –> 00:50:02.230
Ed Allcock: and and they are

504
00:50:02.270 –> 00:50:04.979
Ed Allcock: trying to decipher them.

505
00:50:05.482 –> 00:50:08.297
Ed Allcock: I think they’re gonna be overly cautious.

506
00:50:08.910 –> 00:50:13.189
Ed Allcock: whereas if they just have that final one tight report.

507
00:50:13.220 –> 00:50:15.299
Ed Allcock: and you know, to

508
00:50:15.450 –> 00:50:19.840
Ed Allcock: to identify and go over. My preference would be

509
00:50:20.790 –> 00:50:23.100
Ed Allcock: when an engineering company is engaged.

510
00:50:23.220 –> 00:50:27.760
Ed Allcock: that it it be done with the the law firm.

511
00:50:27.890 –> 00:50:31.409
Ed Allcock: so that it so that there’s an attorney client communication.

512
00:50:31.600 –> 00:50:34.399
Ed Allcock: and it’s not disclosable

513
00:50:35.164 –> 00:50:37.300
Ed Allcock: until it’s in a

514
00:50:37.420 –> 00:50:38.540
Ed Allcock: final

515
00:50:38.670 –> 00:50:46.930
Ed Allcock: form, so that it’s not being misinterpreted by third parties and and not resulting in you winding up on a list

516
00:50:47.080 –> 00:50:52.929
Ed Allcock: with, you know that that initial report, which sometimes is a wide, ranging investigation.

517
00:50:53.190 –> 00:50:56.850
Stephen Marcus: So so since the report eventually

518
00:50:56.940 –> 00:51:03.020
Stephen Marcus: is probably gonna be something that a judge is gonna order to or arbitrator is gonna order to be disclosed.

519
00:51:04.253 –> 00:51:06.099
Stephen Marcus: One idea

520
00:51:06.480 –> 00:51:07.520
Stephen Marcus: that

521
00:51:08.310 –> 00:51:11.660
Stephen Marcus: attorneys and engineers should think about

522
00:51:11.790 –> 00:51:13.390
Stephen Marcus: is

523
00:51:14.390 –> 00:51:19.200
Stephen Marcus: the after the engineer does the inspection

524
00:51:19.550 –> 00:51:21.729
Stephen Marcus: they get on a zoom call.

525
00:51:21.880 –> 00:51:23.249
Stephen Marcus: say, with Ed

526
00:51:23.750 –> 00:51:25.860
Stephen Marcus: and verbally

527
00:51:25.940 –> 00:51:42.019
Stephen Marcus: state what issues they have seen. One thing it does is keeps the list away from. Let’s say it’s the developer that’s being sued the other thing that it does.

528
00:51:42.020 –> 00:52:11.370
Stephen Marcus: because this give and take. The reports of the the verbally, a total is 2 million dollars of problems. Somehow we look at one problem and say, Well, gee, we say 500,000. Here the developer came up with some way that the engineer agrees would work. Just a crazy thought to throw out of there’s nothing to give out. If it’s a conversation.

529
00:52:11.570 –> 00:52:12.170
Jim Morrison: I will!

530
00:52:12.590 –> 00:52:14.490
Jake Marcus: So I wanted to.

531
00:52:15.130 –> 00:52:17.810
Jake Marcus: as we get to the last 10 min of it.

532
00:52:18.670 –> 00:52:25.429
Jake Marcus: Jim. Now as far now, right now, so just to lay out kind of as we’ve kind of

533
00:52:25.460 –> 00:52:28.809
Jake Marcus: tried to get this on a global scale, and more

534
00:52:28.950 –> 00:52:31.850
Jake Marcus: awareness and transparency. With these lists.

535
00:52:32.380 –> 00:52:33.540
Jake Marcus: November.

536
00:52:33.620 –> 00:52:38.399
Jake Marcus: we got your your article, which was awesome. Got a lot of good press, good feedback

537
00:52:38.993 –> 00:52:47.560
Jake Marcus: and and I I think at least definitely got the gover subgovernmental agencies to act.

538
00:52:48.400 –> 00:52:51.690
Jake Marcus: They said they’d act by February and be more transparent.

539
00:52:51.890 –> 00:53:05.490
Jake Marcus: We now don’t think until September. Where do you see now? As far as coverage and getting more awareness and getting pushing them further on this list. Where do you see? Kind of the media getting more involved and kind of pushing this subject.

540
00:53:06.650 –> 00:53:16.449
Jim Morrison: I mean, I I it did surprise me. This is, it’s it’s a hard it’s a hard problem, because this is a problem that everybody should care about.

541
00:53:16.830 –> 00:53:21.939
Jim Morrison: But most people don’t, because they don’t understand, because it’s all secret.

542
00:53:21.990 –> 00:53:30.329
Jim Morrison: Nobody. There’s only I think, the grand total of people who really understand. The mortgage process is in the single digits. I mean, it’s it’s just.

543
00:53:30.520 –> 00:53:36.167
Jim Morrison: It’s too much for people to sort of grapple with. But I I think it’s absurd that

544
00:53:36.520 –> 00:53:41.780
Jim Morrison: you know, more TV coverage hasn’t happened. I don’t know why, you know.

545
00:53:42.140 –> 00:53:49.210
Jim Morrison: not not involving me, but just involving this list of. I think it’s a great national story, and it is a national story. And like we said.

546
00:53:49.350 –> 00:53:54.409
Jim Morrison: there are millions of people, you know, conservatively estimating millions of people

547
00:53:54.620 –> 00:53:56.779
Jim Morrison: impacted by this and

548
00:53:57.694 –> 00:54:02.115
Jim Morrison: and you know, I think it’s gonna be cases like the one we found in

549
00:54:02.560 –> 00:54:04.450
Jim Morrison: in Boston, where

550
00:54:04.810 –> 00:54:13.709
Jim Morrison: the building, when they got the questionnaire, the condo board, somebody, the President, or whatever filled out the questionnaire, and it said.

551
00:54:13.930 –> 00:54:15.740
Jim Morrison: When was the last time?

552
00:54:16.400 –> 00:54:21.860
Jim Morrison: You know, the building was inspected by a licensed architect or some other building inspector.

553
00:54:22.210 –> 00:54:27.919
Jim Morrison: So they went to the latest home inspection report for that building, and it identified some

554
00:54:28.030 –> 00:54:30.860
Jim Morrison: efflorescence on the foundation and a crack.

555
00:54:31.460 –> 00:54:37.219
Jim Morrison: And so the inspector said, well, you know, in his report said you should keep an eye on that.

556
00:54:37.760 –> 00:54:39.320
Jim Morrison: you know not.

557
00:54:39.390 –> 00:54:44.699
Jim Morrison: you know. The context is, it’s a building that’s more than a hundred years old in an old part of the city.

558
00:54:44.760 –> 00:54:53.539
Jim Morrison: where you can’t find a foundation that hasn’t leaked a little at some point or cracked right? It’s a very normal thing, you said. Just keep an eye on it. Well, this

559
00:54:53.920 –> 00:54:56.970
Jim Morrison: Condo board, President included, that

560
00:54:56.980 –> 00:55:01.640
Jim Morrison: with the questionnaire, and that’s how they got on the list. And now they can’t get out off the list.

561
00:55:02.070 –> 00:55:07.884
Jim Morrison: Or I think actually, they’re working. They might even be working with Alcock, Marcus, to get off. But it’s

562
00:55:09.200 –> 00:55:15.580
Jim Morrison: those kinds of things where they’re on the on the list inappropriately and unable to sell units.

563
00:55:15.650 –> 00:55:20.650
Jim Morrison: or that makes it very difficult to sell units. That’s the kind of story I think, that would make a bigger.

564
00:55:20.840 –> 00:55:22.810
Jim Morrison: a bigger impact.

565
00:55:22.810 –> 00:55:24.920
Ed Allcock: Hey, Jim, Jim, did.

566
00:55:25.465 –> 00:55:29.219
Ed Allcock: In response to your story, did I see something that.

567
00:55:29.350 –> 00:55:33.790
Ed Allcock: in addition to making the list more transparent, the Federal Government was gonna

568
00:55:33.810 –> 00:55:38.610
Ed Allcock: open up some sort of office of appeal like, so that there’s like a direct

569
00:55:39.291 –> 00:55:49.078
Ed Allcock: communication with someone at the Federal Government officially rather than the way we’re having us do it now, which is to sort of go back

570
00:55:49.510 –> 00:55:53.350
Ed Allcock: you know, the secuitous route with

571
00:55:53.460 –> 00:55:55.330
Ed Allcock: lending and underwriting.

572
00:55:56.100 –> 00:55:57.569
Jim Morrison: I have not heard that

573
00:55:57.820 –> 00:56:00.170
Jim Morrison: it could be true, but I did not hear that.

574
00:56:00.170 –> 00:56:03.200
Stephen Marcus: And and and I. I had

575
00:56:03.230 –> 00:56:08.409
Stephen Marcus: in the release that Danny and Freddie gave, and and Freddie, and famous to Freddie.

576
00:56:08.650 –> 00:56:09.860
Stephen Marcus: did make

577
00:56:09.950 –> 00:56:14.589
Stephen Marcus: the list more accessible on February 26, as promised

578
00:56:15.119 –> 00:56:36.840
Stephen Marcus: Fanny May has not. And it’s talking about the third quarter. So I figured, well, surely they’re talking about the third quarter of the fiscal year, which was February 26 apparently they’re talking about third the third quarter of the calendar year. But we’re gonna have to wait and see.

579
00:56:36.850 –> 00:56:38.900
Stephen Marcus: But in the

580
00:56:38.930 –> 00:56:42.340
Stephen Marcus: the ending may announcement and the Freddie Mac announcement

581
00:56:42.390 –> 00:57:11.200
Stephen Marcus: both had an appeals pro or process set up, or at least the Freddie Mac. Announcement, which we do have copies of did say that there would be a appeals process to get off the list, because I know that when Jim and Ed both talked to fit I had somebody talk to Fanny May. They said, don’t try, or we can’t talk to you. Talk to the lender. But the lender might have been somebody 2 years ago who

582
00:57:11.610 –> 00:57:15.320
Stephen Marcus: looked at one unit and put somebody on the list.

583
00:57:15.420 –> 00:57:19.729
Stephen Marcus: so I think there will be an appeals process.

584
00:57:20.500 –> 00:57:22.800
Stephen Marcus: When this is all finished.

585
00:57:22.950 –> 00:57:29.219
Ed Allcock: Did. Did we also hear a rumor that the that Fanny is looking at increasing their

586
00:57:29.400 –> 00:57:33.189
Ed Allcock: reserve contribution under their guidelines?

587
00:57:33.940 –> 00:57:49.729
Stephen Marcus: You did a long time ago, and I did more recently. So right now, 10% of your budget has to be in in most of you on the call. It’s established condominiums transition has taken place long ago.

588
00:57:50.333 –> 00:58:07.830
Stephen Marcus: So it’s not as stringent. But they do wanna say, Fanny, Freddie and Faj. Wanna see 10% of the budget for reserves but this talk

589
00:58:08.234 –> 00:58:26.829
Stephen Marcus: that Ed heard a long time ago, and I heard more recently. That that could be increased to 25% of the budget. So look at what your insurance premiums are expected to be. Look at the 20 possibility. 25% versus 10%.

590
00:58:27.238 –> 00:58:39.069
Stephen Marcus: I know that as volunteer board members, you don’t want to go in front of a annual meeting of owners and tell them that their fees are tripling.

591
00:58:39.210 –> 00:58:41.670
Stephen Marcus: and then if they do.

592
00:58:42.191 –> 00:58:50.050
Stephen Marcus: maybe this is a comment to to Jim, if the fees triple.

593
00:58:50.700 –> 00:59:00.979
Stephen Marcus: then what happens? Because people can’t afford to live where they own, and they can’t get Fanny or Freddie to give them loans.

594
00:59:01.140 –> 00:59:06.099
Stephen Marcus: I’m not sure what happens. Is it like a house of cars? And it just collapses.

595
00:59:07.680 –> 00:59:09.130
Jim Morrison: Anybody’s capable. Yeah.

596
00:59:09.560 –> 00:59:10.270
Jim Morrison: good.

597
00:59:11.010 –> 00:59:11.425
Jake Marcus: Jip.

598
00:59:11.990 –> 00:59:22.240
Stephen Marcus: So the answer is, Yes, I I did. I I know it’s a loaded question, but I’m saying, taken to its logical conclusion.

599
00:59:22.750 –> 00:59:24.979
Stephen Marcus: this could be even.

600
00:59:25.630 –> 00:59:32.310
Stephen Marcus: There’s still even more of a potential disaster that we haven’t even seen yet.

601
00:59:32.360 –> 00:59:38.030
Stephen Marcus: I just don’t. I’m not in Astrodamus, not even Crescom. But

602
00:59:38.796 –> 00:59:57.780
Stephen Marcus: I have no idea what the future holds. But in some place I’m doing some work in Montana. But the serious issues with wildfires and just getting enough property damage isn’t possible. There is some serious problems

603
00:59:58.090 –> 01:00:03.000
Stephen Marcus: out there, and hopefully, Ed and Jake can be

604
01:00:03.630 –> 01:00:17.219
Stephen Marcus: ahead of the game in terms of advising associations of his, what to do and not to do to avoid a adverse impact.

605
01:00:17.840 –> 01:00:18.940
Jake Marcus: So, like, yeah.

606
01:00:19.250 –> 01:00:19.780
Jake Marcus: good.

607
01:00:20.048 –> 01:00:21.120
Ed Allcock: Part. Jake, go ahead.

608
01:00:21.557 –> 01:00:26.969
Jake Marcus: So yeah, I I I think that’s a good point, I mean, and I think it just ties all back to

609
01:00:27.040 –> 01:00:35.300
Jake Marcus: how do I get off the blacklist, how do I not get on the blacklist? To begin with? Remember, this is information that you provided. This is the question that you filled out

610
01:00:35.530 –> 01:00:44.370
Jake Marcus: in order to get from point 0 to not ending up on the list or getting off the list or making sure you don’t get on it initially

611
01:00:44.450 –> 01:00:47.330
Jake Marcus: is having conversations with the attorneys.

612
01:00:47.370 –> 01:01:00.010
Jake Marcus: having conversations with your property managers. But it’s even more important to bring in insurance professionals, engineers, architects. Ed had mentioned. Yeah, I mean efflorescence and cracking results in being on the list.

613
01:01:00.230 –> 01:01:15.930
Jake Marcus: I mean, that’s probably every every condo in at least in Florida that’s near the water, and that’s a lot of condos near the water that’s and same with I mean. Same with the Atlantic coast of Massachusetts and and New Hampshire, Rhode Island

614
01:01:16.394 –> 01:01:40.750
Jake Marcus: or Maine, I should say. If they’re on the water there, there’s a likely chance they’re gonna have some type of issue, and Florida makes up. It comprises 34% of the list. That’s no coincidence. Carolina, I think, is third on the list mass. The New England States are lucky right now. It’s not too high, comparatively, but it’s still it’s it’s not a list you want to end up on. And and whether you’re inland or

615
01:01:41.040 –> 01:01:47.149
Jake Marcus: close to the water. You gotta have these conversations. I did just want to point out interim measures that people do take

616
01:01:47.450 –> 01:02:01.580
Jake Marcus: using private lenders local saving Banks credit unions that is an option. If you guys want to talk a little bit about that. But I mean, that’s a Band-aid compared to the bigger kind of picture.

617
01:02:01.600 –> 01:02:04.270
Jake Marcus: and that’s that’s making sure.

618
01:02:04.440 –> 01:02:10.949
Jake Marcus: I mean, lenders are afraid after search side. There’s no doubt about that. And that’s why this has become such a prevalent issue.

619
01:02:11.255 –> 01:02:20.899
Jake Marcus: But yeah, I mean every. It’s a case. By case thing. We we receive an inquiry. You’re on the list. Let’s figure out why you’re on the list. Let’s figure out how you get off

620
01:02:20.960 –> 01:02:25.010
Jake Marcus: if you’re if you’re not on the list. That doesn’t mean you’re in the clear, either.

621
01:02:25.110 –> 01:02:28.870
Jake Marcus: as as all of us have mentioned, this is growing by the day

622
01:02:29.413 –> 01:02:49.350
Jake Marcus: and we wanna make sure that it basically like a thermometer check or temperature check on your association financials, insurance reserves, structural integrity. You wanted to do this all just generally as as as even just prophylactic measures to avoid issues in the future, even if you’re not on the list.

623
01:02:50.170 –> 01:02:54.979
Stephen Marcus: There’s there’s another thing that’s gonna sound a little a little

624
01:02:56.824 –> 01:03:02.129
Stephen Marcus: So we talked about Florida, New Jersey as having mandatory inspections.

625
01:03:02.480 –> 01:03:07.189
Stephen Marcus: If you’re the manager or the volunteer board

626
01:03:07.747 –> 01:03:19.202
Stephen Marcus: of a condominium, and let’s say that it’s on the waterfront in in in, in in in Boston but it could be anywhere.

627
01:03:19.820 –> 01:03:22.840
Stephen Marcus: The prudence probably says

628
01:03:24.120 –> 01:03:26.170
Stephen Marcus: legislation or not.

629
01:03:27.210 –> 01:03:35.979
Stephen Marcus: you should be getting structural inspections and facade inspections and mechanical inspections of your buildings

630
01:03:36.543 –> 01:03:45.779
Stephen Marcus: periodically, in any event, and if you run into a 5 million dollar issue, there are Banks and

631
01:03:45.860 –> 01:03:56.159
Stephen Marcus: Massachusetts, for example. So sure bank will give 30 year loans. And if you can get a head of the game.

632
01:03:56.250 –> 01:04:07.350
Stephen Marcus: make the repairs that are needed. The problem the reason for doing that is, I think they’re wrong. But Penny and Freddie say.

633
01:04:07.490 –> 01:04:11.019
Stephen Marcus: if you have 5 million dollars of defects.

634
01:04:11.120 –> 01:04:16.060
Stephen Marcus: they won’t lend again until all the work is complete

635
01:04:16.270 –> 01:04:28.200
Stephen Marcus: a local lender, may likely step in and say, if we know where the money is going to fix the issues that Penny and Freddie have problems with.

636
01:04:28.694 –> 01:04:39.600
Stephen Marcus: We don’t see the see the risk. So I think on certain issues. the local lenders might be an interim step

637
01:04:39.650 –> 01:04:43.220
Stephen Marcus: before the loans can be solved, if you any may. And Freddie.

638
01:04:44.600 –> 01:04:49.699
Ed Allcock: Well, you know to me, you know, one of the one of my last points is

639
01:04:50.439 –> 01:04:53.589
Ed Allcock: and and I wanna Echo Jim’s point

640
01:04:53.700 –> 01:04:58.500
Ed Allcock: is, I don’t know how this hasn’t gotten more national coverage. Why, this isn’t on Cnn.

641
01:04:58.780 –> 01:05:01.280
Ed Allcock: It. It kind of saddens me. I always.

642
01:05:01.430 –> 01:05:02.439
Ed Allcock: I’ve been a

643
01:05:02.600 –> 01:05:04.150
Ed Allcock: a proponent of

644
01:05:04.460 –> 01:05:06.689
Ed Allcock: free market and capitalism.

645
01:05:06.800 –> 01:05:13.860
Ed Allcock: But to realize that we have a Federal Government telling private lending institutions not to loan to

646
01:05:14.080 –> 01:05:20.870
Ed Allcock: Condominium associations, or or somebody that lives in a Condominium Association based on a secret list

647
01:05:20.950 –> 01:05:22.240
Ed Allcock: compiled

648
01:05:22.460 –> 01:05:23.670
Ed Allcock: by

649
01:05:23.760 –> 01:05:28.190
Ed Allcock: compiled, based upon answers given by that association.

650
01:05:28.749 –> 01:05:33.660
Ed Allcock: On a lender questionnaire to me is just, is is mind blowing?

651
01:05:34.070 –> 01:05:36.253
Stephen Marcus: But but but let

652
01:05:36.970 –> 01:05:44.139
Stephen Marcus: We have beat up every day, and take a victory. Lapse every once in a while

653
01:05:44.320 –> 01:05:50.750
Stephen Marcus: on this one with all the bad that we’ve discussed.

654
01:05:51.325 –> 01:05:54.050
Stephen Marcus: There is a Victory lap

655
01:05:54.652 –> 01:06:19.719
Stephen Marcus: until the Jim story was in the globe in November. Danny and Freddie well, one, his friends were lying to him the lender friends who said that the wet list but because of that reporting

656
01:06:20.258 –> 01:06:43.399
Stephen Marcus: Danny and Freddie have now said that different timeframes, but already for Freddie and next quarter for Danny May. That there’s gonna be more transparency I’ll also mention something that I learned like an hour ago.

657
01:06:44.644 –> 01:06:58.949
Stephen Marcus: Jim. Sorry was superb. And I don’t wanna make him blush. But I believe that the editors at the Boston Globe

658
01:06:58.950 –> 01:07:19.349
Stephen Marcus: have submitted the story to the National Association of Real Estate editors for an award for based on how how good and insightful the investigative research was, and the resulting story.

659
01:07:19.350 –> 01:07:19.690
Jim Morrison: The money.

660
01:07:19.690 –> 01:07:30.579
Stephen Marcus: Congratulations to Jim, and I guess congratulations to all the kind of many of managers and associations that there will be

661
01:07:31.004 –> 01:07:37.209
Stephen Marcus: more transparency, and I know we’re over time, but we always do that mainly because of May.

662
01:07:37.400 –> 01:07:39.079
Jake Marcus: Yeah, you overstayed. You’re welcome.

663
01:07:39.080 –> 01:08:06.690
Stephen Marcus: Yeah, I was. Gonna say, somebody asked, How do I? How do I found out? If my associations and New Hampshire on the list. I think the easy answer is email added, add@amcondolaw.com or deena@amcondolaw.com. And they can tell you if you get the name of the association if they’re on the list or not.

664
01:08:07.140 –> 01:08:08.789
Jake Marcus: But we we have our

665
01:08:09.190 –> 01:08:13.635
Jake Marcus: names and mug shots up here as a thank you.

666
01:08:14.090 –> 01:08:17.320
Jake Marcus: and I mean, I think I think we’ve kind of

667
01:08:17.330 –> 01:08:28.459
Jake Marcus: there’s there’s we could make a whole nother segment of each sub factor, each slide that we went over. We could do an hour on. But I think we did a good job of of

668
01:08:28.540 –> 01:08:37.858
Jake Marcus: tying up everything where we’re at. You know what’s what has happened, how we got to this point, and where we kind of look going towards the future future.

669
01:08:38.210 –> 01:08:41.380
Jake Marcus: Jim, anything else you want to add to sign us off.

670
01:08:42.090 –> 01:08:46.769
Jim Morrison: I I just wanted to congratulate your brother Steven there. Turns out that

671
01:08:48.180 –> 01:08:53.819
Jim Morrison: Tom Hanks has agreed to play him in the move in the film version of this story. And we look forward to seeing that.

672
01:08:54.319 –> 01:08:55.939
Stephen Marcus: Kevin Costner backed out.

673
01:08:56.120 –> 01:08:57.510
Jake Marcus: But it was Brad Pitt.

674
01:08:59.620 –> 01:09:07.989
Jake Marcus: No, we appreciate your time, Jim. We appreciate everything you’ve done you know. Help with help with our situation help bring awareness to this?

675
01:09:08.784 –> 01:09:14.640
Jake Marcus: Hopefully, we can continue to to get the word out there. Ed, anything you want to add.

676
01:09:15.430 –> 01:09:23.470
Ed Allcock: I I can’t wait to see this story on either Cnn. Or 60 min. I think we need to push it and continue to push it.

677
01:09:24.939 –> 01:09:29.779
Ed Allcock: so that we don’t have and live in a society where the Federal Government is telling

678
01:09:30.593 –> 01:09:35.119
Ed Allcock: private lending institutions not to loan. It’s it’s not.

679
01:09:35.450 –> 01:09:38.030
Ed Allcock: It’s not the capitalist society. I

680
01:09:38.090 –> 01:09:39.240
Ed Allcock: thought it was.

681
01:09:40.870 –> 01:09:49.709
Stephen Marcus: And somebody made a comment that they addressed it to the panelists, and I think they meant to address it to the audience, which is, be careful on these lender questionnaires.

682
01:09:50.029 –> 01:10:04.379
Stephen Marcus: and after you fill them out, and you should be charging the lender or the buyer or the seller for doing that you should have them re be reviewed by your attorneys.

683
01:10:04.965 –> 01:10:23.589
Stephen Marcus: To see what answers you gave might be dangerous and get you in trouble because they have been lawsuits going way back like 25 years for a helpful manager saying, now we know of no plan. Special assessments

684
01:10:24.007 –> 01:10:36.119
Stephen Marcus: the person bought. One came around which they did not know about when the the question there was sign on. So we make some little changes such as

685
01:10:37.023 –> 01:11:00.069
Stephen Marcus: no special assessments as of this date. And so so just be careful, because as volunteers is tough business. So I was a kind of mini and manager before as an attorney, and that kind of mini management is a tough business. We want you to avoid headaches.

686
01:11:00.462 –> 01:11:07.860
Stephen Marcus: We wanna do the best we can, or have your own legal counsel the best they can to stay safe.

687
01:11:10.670 –> 01:11:11.340
Jake Marcus: Okay.

688
01:11:11.930 –> 01:11:32.310
Jake Marcus: that’s great now. And we have our information here. So if you want to reach out happy to help and yeah, this has been a great session. Thanks, Jim, for joining us. We’ll be. We’ll for sure be in touch, as this story continues to develop. And and I think my my brother over here is really excited to

689
01:11:32.460 –> 01:11:35.680
Jake Marcus: play the action role in the Hollywood movie.

690
01:11:37.810 –> 01:11:39.693
Jim Morrison: As well as should be.

691
01:11:40.270 –> 01:11:47.280
Jake Marcus: Thanks everyone for attending. Have a Good Friday. Have a good masters, weekend, and we look forward to the next episode.

692
01:11:48.500 –> 01:11:49.660
Ed Allcock: Thanks, everybody.

693
01:11:49.900 –> 01:11:50.539
Jim Morrison: Thank you.

694
01:11:55.450 –> 01:11:56.710
Stephen Marcus: And it

695
01:11:57.310 –> 01:11:59.700
Stephen Marcus: people are logging off.

696
01:12:00.090 –> 01:12:01.260
Stephen Marcus: Funny one.