Re: Home Equity/Mortgage Loan Denial-Need Resolution
From: John Ullman (jsu627earthlink.net)
Date: Tue, 18 Jun 2013 16:12:45 -0700 (PDT)
If a co-housing wannabe (at least since Joani Blank introduced me to it 22 years ago) might venture a comment: being co-housing may add another layer of difficulty in getting financing, but the situation for condos in general has worsened markedly over the past four years or so. We bought a condo in 2003 and had no problem with bank financing. When our neighbor tried to sell three years ago, none of his perspective purchasers could get a bank loan. He eventually sold to a cash buyer who paid 60% of what the purchasers who needed bank financing were willing to offer.

The bank said that they couldn't finance our units because FNMA and FHLMC would not underwrite mortgages on our units. Since we bought our unit, FNMA and FHLMC changed their rules for condos in two ways that impacted our condo's situation. 1. They won't underwrite units where more than a small percent are owned by one owner. 2. They won't underwrite units where more than a small percentage are rentals. It doesn't matter to them that our owners and condo association have done all the right things, created a healthy reserve, kept up repairs, and have no foreclosures.

Portfolio banks also declined to finance our units.

Chase bank, which held our original mortgage, did allow us to refinance two years ago.

I would welcome a class action suite against FNMA and FHLMC. It's long overdue. In the meantime all we can do is console ourselves with the aphorism that no good deed goes unpunished.

John U

"To make music is the essential thing ? to listen to it is accessory." Charles Seeger


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