Looking into the finances of my co-op in NY and I have a question about whether the financial conduct of our board over the last 25+ years is 'typical'. According to the annual financial statements, the board has taken out 2 ten year mortgages and each time, they have transferred the money (a little less than $1MM) to the cash/reserve fund and have slowly spent it over the ten year life span of the mortgage so that when they refinance and get a new mortgage, the 'cash/reserve' fund gets replenished with more money.
They are not paying down the underlying mortgage (currently they are only paying the interest of a 10-year mortgage) and the mortgage debt has increased with each new 10 year mortgage.
Is this normal for a co-op board to do so? Does this raise any red flags?
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