That is understandable as suddenly escalating assessments could make it hard for buyers to meet their monthly mortgage obligation. But now, even beyond the fidelity bond, lenders are sending us complicated forms with many questions about the financial health of our association. Now, with prices once again reaching record levels, banks and other mortgage lenders look to be taking steps to protect themselves. However, a bond serves only the lender’s interests and the association does not stand to gain anything from incurring the cost of purchase. Once the board purchases a fidelity bond, there may be a presumption that the association is committed to purchasing the bond every year.

Source: Los Angeles Times September 23, 2017 12:56 UTC