Re: Mortgage lenders and cohousing
From: Sharon Villines (sharonsharonvillines.com)
Date: Mon, 27 Aug 2012 07:01:15 -0700 (PDT)
On Aug 27, 2012, at 9:14 AM, "Lautner, Patricia" <Patricia.Lautner [at] 
umassmed.edu> wrote:

> Is anyone else having problems with lenders?  We found out recently that 
> Chase has put Cohousing on a 'No Go' list and won't provide financing.  

I think we need to be very clear when we say things like this because it 
affects the enthusiasm of new communities and those looking at cohousing, and 
their willingness to approach banks once they are mentioned in this way. 

Was it the local office or a national ban? What exactly is the wording of the 
decision? Get it in writing. This doesn't even seem legal because cohousing is 
a lifestyle, not a financial or ownership model. 

> Even though we believe we have very standard - vanilla State of MA condo 
> docs, we do have a Right of First Refusal clause, a Transfer Fee clause, and 
> the guest suites are mentioned.  So far three different lenders Cite one of 
> these mentioned clauses as reason for denying the mortgage (on a high income, 
> dual income, young couple putting more than 25% down!)

My chief source of news is Charlie Rose since he has leaders in all industries 
(including sports) come and have a conversation about what is happening 
currently. Someone important was on last month (forget the details) talking 
about the economy and the effect of banks not extending credit. Banks have tons 
of money but have raised the bar so high on qualifications for loans that the 
money is sitting, literally, in the bank. Some of the restrictions are coming 
from federal requirements for higher reserves, but not all of it.

> I'm on the Board at JPCohousing and we're considering our options.  Please 
> let me know if you've had any problem like this and what your community is 
> doing about it.

The problems our new buyers have had were mortgage broker and bank specific. 
When they went to other banks or switched brokers they had no problem. Because 
of the lower interest rates, many of our residents have recently refinanced 
with no problems. The requirements for appraisals are higher -- no more 
drive-bys. 

I would advise using a broker or bank that has financed other units in your 
development.

Years ago a cohouser (sorry, I forget who) constructed a national list of banks 
that had financed cohousing construction. It would be an excellent project for 
someone to take that on again -- to list both banks that had financed 
construction and that had given mortgages on units in specific communities.

Showing this to a banker boosts their confidence level. Right now they are 
looking for reasons not to get caught holding the bag -- and losing their jobs.

Sharon
----
Sharon Villines, Historic Takoma Park, Washington DC
"Logic will get you from A to B.  Imagination will take you everywhere." Albert 
Einstein





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