CLARKONOMICS: Clark is not a man who's afraid of the condo market. He knows the value of a condo typically fluctuates like an EKG -- up and down in rapid cycles. Single-family homes, by contrast, tend to rise slowly but steadily over time, barring a bubble market. The problem is that people usually buy condos the wrong way. They own them for short periods of time and then can't get the value they paid when they resell.

Because of general market malaise, lenders are increasingly getting spooked about making loans for condos. New rules and requirements are being established that reflect the fear. It's getting tougher to refinance a condo loan or get one in the first place. Some lenders have even begun redlining -- that's where they take whole zip codes and refuse to make loans in them regardless of credit score.

Other lenders won't make loans in condo communities where there are more than 25% rentals. Some owners have become unwitting landlords so they can meet their monthly payments. Yet if a condo association allows a high percent of rentals, the condo community won't be exempt from future financing.

Compounding the problem are new Fannie Mae and Freddie Mac guidelines. Lenders are being required to make a decision about whether or not a condo association has solid books before making a loan. The practice hurts lenders who may want to sell out their loans out of portfolio, and Clark says it will have a further chilling effect on condo lending.

The pendulum swung too far with irresponsible lending; now it's swinging too far the other way. It all creates a hardship for those condo owners who want to sell. The good news is that there's great opportunity right now to buy a condo for cash or if you're able to get a loan. Condos go through phases of incredible pessimism followed by ill advised optimism. Right now we're in a pessimistic cycle, so look for the deals and pounce. Do you smell what Clark is cooking?

Condo and homeowner associations sometimes go out of control with rules and regulations. Some states are fighting fire with fire. Clark tells you all about it. Remember to click on the link just once and disable your pop-up blocker to hear.

Do you live in a community with a homeowner’s association? These organizations were considered a very good idea at first, but now they are becoming much more controversial. It’s so bad that California recently passed a law, saying that an association can take away your home if you don’t pay your dues or have a minor dispute. Governor Schwarzenegger vetoed the law, thank goodness. But there is definitely a backlash toward homeowner’s associations. People magazine recently wrote about these associations, and reported that about 55 million of us now live in these communities. Some who like the uniformity and control that goes along with these organizations. Others have no idea what they’re getting themselves into and what punishments go along if they don’t comply. The scary thing is that these groups have unlimited power in most cases. There are no checks and balances. That’s why Clark thinks there should be a judicial remedy in the form of a state-sanctioned homeowner association court. Homeowner disputes could be heard there. And if an association imposes a fine on you, you can argue your case. Clark understands the need for these associations, but there is an abuse of power that needs to be addressed.

If you hadn’t already heard, homeowners associations are evolving into mini-governments with extraordinary powers that could land you out on the street. There have been cases of homeowners losing their homes over disputes as low as $100. There are also a number of states where homeowners associations can seize your home and foreclose on you. They then auction off your home, which wipes out all the equity you have. According to the L.A. Times, 40 percent of new homes in the state of California are in covenant communities. So, people need to be aware of the power HOA board members possess. A recent story of a Florida man who erected a large flagpole in his front yard is a prime example. Apparently, the man’s flagpole was taller than the height stated in the rules book of the community, and he is now fighting to keep his house. Community covenants should have the right to fine individuals that choose to live in rule-abiding communities. However, if this type of neighborhood isn’t for you, don’t move in.

A story in Better Homes & Gardens caught Clark’s attention recently. It was about how neighborhoods are setting up their own teaching co-ops. The people in the neighborhood basically talk about their skills strengths and then swap services with each other. The bigger affect, of course, is that neighborhoods are once again getting to know each other. The sense of community is growing again because of these groups. Christa, Clark’s executive producer, lives in a neighborhood like this and she loves it. She recently went to a party where everyone wore nametags that also listed services they could offer. Some walk dogs or fix computers, while others offer sewing lessons or music lessons. To find out more, go to timedollar.org. And the best part is that it’s cheap!

Do you live in a community with a homeowner’s association? The organizations are becoming new de facto governments across the country as many local governments don’t want to get involved. For instance, these communities provide their own lighting, security and utilities in some states. And in many cases, everybody wins. People like not having to worry about someone putting their car on blocks or another neighbor putting up an unwanted fence. In theory, the rules protect everyone’s home values, and the dues allow for nice amenities in these communities. But sometimes these associations can get out of hand. Some residents have lost their homes over issues involving a couple hundred dollars. In one recent case, a resident who owed $1.50 lost his $285,000 home. It’s an extreme case, but it happens. Why? In many states, there was no judicial review before a foreclosure can take place. So, a board can arbitrarily vote to oust you from a community and there is nothing you can do about it. States need to step in and establish some kind of court system within these communities. There should be a right to appeal because in most states, homeowner’s associations are judge, jury and executioner in these matters. Clark thinks the idea of putting a lien against a home until a payment is made is much more reasonable than going straight to foreclosure. Just be sure to choose your battles wisely. You don’t want to lose your home over $150, much less $1.50.