Fannie Mae sues guarantors over deteriorating Texas apartment complex
According to the filing, the problems trace back at least to July 2025, when a property condition assessment conducted on Fannie Mae’s behalf found the complex needed $384,825 in repairs. The deficiencies included unlabeled electric subpanels, damaged roof shingles, asphalt damage, and damaged sheetrock and flooring, the suit says.
The servicer sent a demand letter in September 2025 requiring AZ Wealth Big Spring to fix the problems and deposit $384,825 in additional security within 30 days, the lawsuit says. The borrower did neither.
A year later, the picture had gotten significantly worse. A follow-up assessment in June 2026 found the borrower had completed roughly 4% of the originally required repairs – approximately $16,275 of the $384,825 estimate, according to the filing. The updated repair cost had climbed to $606,700, a 58% increase.
The June 2026 assessment describes a property in steep decline. The filing alleges water leaks in multiple units, suspected mold growth on ceilings, rotting wood siding and trim throughout the exteriors, cracking and deterioration at the pool deck, a cockroach infestation in one unit, expired fire extinguishers, and a wooden pallet covering a manhole near a walkway. Fifteen of the complex’s 68 units were either down or vacant and unavailable for occupancy due to habitability concerns, the suit says. The property’s fitness center was closed. The assessment concluded the complex was in “unacceptable condition, and is substandard when compared to properties of similar age and construction type,” according to the filing.
On top of the maintenance failures, Fannie Mae alleges the borrower failed to pay a roofing repair vendor, resulting in the filing of a mechanic’s lien against the property for $489,813.16 in August 2022. The borrower never had the lien removed or bonded off within the 60-day window required by the loan documents after receiving notice of the lien, the suit claims.
