I have a file where I successfully obtained short sale approval. Now, the problem is with the buyer obtaining a mortgage. The condo association has more than 15% of their units behind in dues. Apparently, FHA guidelines have poured over into the conventional with regard to this matter. I am attempting to contact the short sale lender, BOA, to see if they will lend. I may not have the correct contact for such. Does anyone have a name and number for someone at BOA that can comprehend this ordeal and offer a solution?The buyer was going to get an FHA loan, but also have 20% and willing to get a conventional loan. This short sale is behind almost $3K and will be paid at closing. What a shame for this to be the deal breaker and add to the halt of selling any more condos in this association, except for cash of course.
Thank you!
Kristy
Short Sale Coordinator
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Condo financing: Have a Lender in your pocket that can immediately answer your question, "Can this condo qualify for financing?" If they are in the know, they will be able to tell you..and you can let the Buyer's know. Hard to get condo financing in hard hit developments..although there are plenty here in Palm Springs, CA that DO qualify for loans..
In Southern CA, I believe this is going to be the next HUGE issue for buyers and sellers. Now, we may have historically low Interest rates, buyers willing to buy, good home values / prices and overall improved short sale processes, BUT one of the biggest hurdles we are now facing is Condo / HOA Associations with overwhelming delinquencies. The number of Associations on the verge of Bankruptcy is increasing to the point they have to levy assessments to all units but only the homeowners who are already bearing the brunt can pay - so they get disgusted and stop paying too! (Think about it, if there's an HOA with 130 homes and 120 are not paying HOA fees - that's a problem!) I believe we're going to see a significant number of HOAs filing BK in the very near future which of course may or may not help the ability to obtain financing.
One of the biggest issues we face is financially distressed homeowners who have to hold onto every penny they have just to put food on the table for their families - or themselves! With short sale lenders, for the most part, not paying past due HOA fees, this places the burden squarely on the Buyer (or the agents, but let's not go there). Therefore, unless the Buyer is paying under market value for the property it is foolish for them to pay the past due HOA - there is no tax benefit or value added by paying the past due fees.
So is there a solution? Last year I had a transaction where the seller was $20,000+ past due on HOA. Luckily, the HOA was financially stable. Of the 110 homes, only 2 were past due of any significance. When we wrote the offer, we requested 3% in seller-paid closing costs (about $24,000) to be used specifically to clear up any SELLER past due HOA which would be paid by the buyer at closing - written into the offer in this way. It worked!
This was a BofA 1st and Chase (collections) 2nd, BofA approved the Seller-paid contribution to Buyer closing costs from the proceeds (more of a loss for BofA but cleared the HOA issue) and we closed. Of course this is a readers digest version because there were other issues with the unrecorded Chase 2nd, but that's another story.....
The point is, there are ways to resolve HOA delinquencies but the lenders have to participate in the resolution. If teh bank takes the property in Foreclosure, the HOA fees are typically paid by the lender so why not pay it when there's a short sale. I believe, with the economy the way it is, lenders should begin to escrow for HOA similar to taxes and insurance until the economy turns around and worries have past.
Just my .02,
Thom Colby
Broker
Newport Beach CA
What do you know?! Buyer walked. I tried to help the buyer's agent find financing for the buyer, but I think they had already decided to give up before thinking outside of the box to find lending. Too bad that the condo associations couldn't figure out a way to include their dues in with the taxes, like CDD fees.
Brian-
I suggest you call Andy Innhelder- 720-219-7447. I don't know who you are talking to or what's going on but in terms of helping Kristy, which I think is where this began and not as a contest between the 2 of us I do know that I closed 3 non-warrantable condos in various stages of foreclosure with this program this year with Andy. And I do know the difference between non-warrantable and warrantable condos as I worked for many years for a condo developer. Perhaps the answer would be more easily reached if the agents actually involved were to check in with Andy. I spoke with him this afternoon to find out the name of the program and make sure it would work. More than likely Andy can do the deal with them regardless of where the property and transaction is located and he assured me that if he couldn't for some reason he would find them a Compass Bank loan officer that could. So again- I would encourage anyone that has financing issues on non-warrantable condos to call Andy. Dealing directly with the retail division of a bank often opens opportunities that are not available through mortgage brokers who only have access to the wholesale division. And point in fact I once had a buyer that I sent to a mortgage broker. The broker packaged the loan up and submitted it to several different banks, including US Bank and it was declined. I then sent him to my loan officer buddy at US Bank and by going through the retail division the guidlines are a bit more flexible- just enough that my buyer secured a 30 year fixed rate loan from US Bank which was one of the institutions that had declined it when it was presented to their wholesale division by a mortgage broker. In this market I find ruthless determination is the name of the game
Cheers!
C
Brian Avery said:
I am guessing that Brian is a mortgage broker. The program that I am referring to is not available through Compass wholesale lending. The program is called Compass' CRA 97- it does work on non-warrantables but you have to go through a Compass bank lending officer. I work with 2 of them here in Denver and they are able to work in lots of areas in the country so if you would like contact info to these guys I am happy to provide their contact info.
Good Luck-
C
I just had a bit of good luck. I got a cash offer on my condo shortsale that was going to be a problem with financing. There are 16 units and one is past due. They just sold one that was a foreclosed and therefore all the past due on that one was brought current. So, my advise is we are going to need to get cash buyers until the government realizes they are going to need to talk with the banks about the problem that they are making with condos. Another mess they are making by not getting buyers in that will pay.
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