> gets so bad that banks stop issuing mortgages on them. That actually happened in a condo building I lived in. A buyer's mortgage company refused to go throu

> gets so bad that banks stop issuing mortgages on them. That actually happened in a condo building I lived in. A buyer's mortgage company refused to go through with the loan a couple days before closing because, by their calculation, the reserve percentage was not high enough. Now, it was a couple thousand dollars and the building had a reserve of around $2 million at that time, and the association's response was "we hired consultants to figure out the correct reserve amount. You mischaracterized X, Y and Z; if you do it properly the numbers are all fine". But it was all too late, the sale fell through. A few weeks later we discovered that the association hadn't been paying the water bill ("not our fault, they didn't send us the bill"), put the condo on the market and sold immediately. That bank was apparently ok lending 95% LTV; happy to be done with it and living in a detached house.