Cohousing-L Mailing List: Re: co-housing unacceptable to Fannie Mae?!?

[Diana Carroll (dianaecarroll]

On Tue, Apr 24, 2012 at 10:20 PM, Lyle Scheer <wonko [at] monkeyhouse.org> 
wrote:

> However.... shopping around, I'm also getting told I can't transfer my
> appraisal and that each lender I go to needs to order an appraisal due
> to new financial regulations, so I'm placing a $400 bet that no red
> flags will show up every time I go somewhere to try to get a loan.  My
> current broker says I should disclose the co-housing and right of first
> refusal issues to new lenders when I go there, but that seems like I'm
> just asking for trouble.
>
> Yikes.
>

In the last three years, I've helped usher through approximately 15 loans
for new buyers into our community so I'm something of an unwilling expert
on this. :-(

First thing I learned is that mortgages go through a series of stages, each
managed by a different department, and that the usual order is application
-> appraisal -> condo approval -> underwriting. The appraisal costs the
applicant money, the underwriting costs the bank money, so obviously they
prefer this order.  But if you have a broker or loan officer you are
working closely with, they can be pressured into reversing this order, and
doing the appraisal closer to the end...thereby saving you $400 if the
condo is unacceptable, or the loan fails underwriting.

Second thing I learned is to be involved in the process closely, and to not
take anything the broker says too seriously: s/he is a sales person and not
a financial expert, and doesn't actually make ANY decisions in the process,
contrary to what s/he will tell you.  I often push for direct contact with
the underwriting or condo approval folks at the lender...sometimes they
will allow that to occur, sometimes not.  You can spend all day talking
your head off with the broker but you are pretty much wasting your time
there.

Remember: brokers are sales[wo]men.  They can be Allies, but they are NOT
the Good Guys and they are not on YOUR SIDE, no matter what they say.  They
are on THEIR OWN side, and will help you only insofar as your interests
align with theirs.  Maintain a respectful wariness with even the
friendliest of brokers because they are NOT ON YOUR SIDE.


I guess the relevant question for the list would be, has anyone done
> this process by actively disclosing the uniqueness's of your community
> and had a lender not blink? Within the past year?
>

Yes.  This is exactly what I've learned to do.  When a new buyer comes in,
with a new broker to work with, I get on the phone with that broker right
away and lay the situation out exactly.  I explain that we have been turned
down for fannie-mae non-compliance and he should verify that this mortgage
will pass fannie mae before asking my buyer for a cent.  Mostly the broker
ignores me -- gives me lots of nice-nice talk about how he's sure it will
be fine blah blah -- but until he's actually given the details to the
underwriting department, I know he's full of crap.

So far, as far as I know, we've gotten almost all our loans as "portfolio
loans", meaning that the lender keeps the loan and does not sell it to
fannie mae or on the secondary mortgage market.  These loans have somewhat
higher interest rate, but are easier to get.  Talk to small, local banks,
ask them up front if they do portfolio loans, explain why you need them
("fannie mae gives us crap") and go from there.

Diana, reluctant amateur cohousing financial expert