Is Your Condo Blacklisted By Lenders?

[Mango]

These lists are nothing new and not illegal. Fannie and Freddie have always maintained a list of warrantable condos. You can access it via their web sites and if you are seeking a mortgage, any Bank or Lender will give you this info immediately since if they can't buy the mortgage according to the Borrowers request, it's a total waste of time. There are also Lenders willing to offer loans on unwarrantable condos, but there will be a fee in price, rate or both. Either way, If you're paying cash or mortgaging, it's always a good idea to ask for a questionnaire to be completed by the Assoc. Manager. This questionnaire would ask many of the questions listed above and you would want to also know about reserves, occupancy, how many units are delinquent in assessments, is there any pending litigation......etc. The property could be listed as warrantable and then change in this environment, so I always checked in advance about a condo before relegating my clients to going through a tedious process, then having to bail.

Here's an updated list as of 10/03 from Suntrust. (It's Fannie's list with Suntrust's name on it)
Here is info about warrantable condos according to Fannie Maes guidelines.

 

[TheSheep]

Here's an updated list as of 10/03 from Suntrust. (It's Fannie's list with Suntrust's name on it)

I have Suntrust's list. This one you posted is 9 pgs long for approved condos nationwide. Mine is 1722 pages long (inc the 9.5% of unwarrantable).

Rarely will the institution reveal that a certain project is unwarrantable to the Borrower upfront. Many mortgage apps are taken online or at the branch level. They have no clue in the latter, no interest in the former. As you stated, the blacklisting is dynamic, Lenders cannot push down this data quickly enough or expect that customer service level personnel can keep up with this logjam of ever-changing data.
Then there are the nonrefundable app fees.

You're point, as was Ms. Selly's, revolves around "known" information. Mine assures that very little is known and that the financial institutions involved are well pleased to have you believe ewe R in the know.

 

[elgordoboy]

I have Suntrust's list. This one you posted is 9 pgs long for approved condos nationwide. Mine is 1722 pages long (inc the 9.5% of unwarrantable).

Rarely will the institution reveal that a certain project is unwarrantable to the Borrower upfront. Many mortgage apps are taken online or at the branch level. They have no clue in the latter, no interest in the former. As you stated, the blacklisting is dynamic, Lenders cannot push down this data quickly enough or expect that customer service level personnel can keep up with this logjam of ever-changing data.
Then there are the nonrefundable app fees.

You're point, as was Ms. Selly's, revolves around "known" information. Mine assures that very little is known and that the financial institutions involved are well pleased to have you believe ewe R in the know.

Are you suggesting that Suntrust is "pulling the wool over your eyes" (like that one don't ya?) since ewe believe you are in the know? Or do you mean Mango's eyes and Ms. SHELLY's? Sometimes the gibberish is entertaining and possibly illumminating and sometimes it is just gibberish, which is this?

 

[SHELLY]

You're point, as was Ms. Selly's, revolves around "known" information. Mine assures that very little is known and that the financial institutions involved are well pleased to have you believe ewe R in the know.

...what I DO KNOW is that there are still baaaad people out there who are looking for clueless sheeple to shear for their own personal gain. If one is stupid enough to let themselves get fleeced and is led to the slaughter by shysters who pull the wool over their eyes, they deserve to have their financial life flocked up.

.

 

[TheSheep]

...what I DO KNOW is that there are still baaaad people out there who are looking for clueless sheeple to shear for their own personal gain. If one is stupid enough to let themselves get fleeced and is led to the slaughter by shysters who pull the wool over their eyes, they deserve to have their financial life flocked up.

"Deserve" is a cruel shoe, Ms. Shelly.

 

[SHELLY]

"Deserve" is a cruel shoe, Ms. Shelly.

:roll: Oh please...with all the red flags that are flying warning of the greed, fraud and corruption that has been (and continues to be) going on in Real Estate "investment"...if they don't get it by now, then yes--they pretty much deserve to be taken to the cleaners--culling the herd, you might say.

.

 

[Mango]

I have Suntrust's list. This one you posted is 9 pgs long for approved condos nationwide. Mine is 1722 pages long (inc the 9.5% of unwarrantable).

Suntrust's list are condos they have warranted for the Agencies. It is not all exclusive for all condos. I linked Suntrust's list since they are a major Lender in FL. Anyone can go to Fannie Mae/ Freddie Mac/FHA web sites and search for approved condos. Here is the link for FHA. I'll look for FNMA and Freddie link later or google their main web page and search for approved projects.

If a project is on the approved list, it means that a Bank does not need to submit they warranted the condos that are listed, or only has to do a limited review. If the condo is not on the list, that does not mean the condo is unwarrantable. The underwriter at the Bank reviews the condo questionnaire obtained by the Bank and if it meets the requirements, then they get a warranty. FYI- FNMA will not entertain any new condos in FL, meaning newly built.

Non Warrantable Condos - these are condominiums that are not eligible to be sold to Fannie Mae or Freddie Mac because they DO NOT fit into one of the following three classes:

CLASS I

1. Developers control of the homeowners association has been turned over to the condo owners
2. Project is not subject to additional phasing or add-ons which have not yet been completed
3. All common elements and amenities must be fully installed, completed and in operation
4. 70% of all units in the entire development must have been sold and or legally obligated to close
5. 70% of all units in the entire development must have been sold to owner occupants

CLASS II

1. Recent or current condominium conversions (from apartments)
2. Homeowners association has been controlled by the unit owners (other than the developer) for less than two years
3. Project is not subject to phasing or add-ons which have not yet been completed
4. All common elements and amenities are fully installed, completed and in operation
5. 70% of the units in the entire development must have been sold and/or legally obligated to close
6. 70% of the units in the entire development must have been sold to owner occupants
7. No more than 15% of the current unit owners are more than one month delinquent in payment of homeowners dues or assessments

CLASS III

1. Homeowners Association has been controlled by unit owners (other than developer) for at least one year
2. Project is not subject to phasing or add-ons
3. All common amenities are fully installed, completed, and in operation
4. 90% of the units have been sold (owner-occupancy of at least 60%)

A CONDO QUESTIONNAIRE MUST BE COMPLETED BY THE MANAGEMENT TO DETERMINE PROJECT ELIGIBILITYFor those who are considering purchasing Non-Warrantable condos, they should expect to pay higher interest rates on their mortgage loans. Because FNMA would not purchase mortgages secured by non-warrantable condominiums, many banks consider these condos to be more risky, and thus increase the interest rate accordingly.
Depending on the loan program you select, be prepared to have a down payment on the home. Most lenders will only offer low Loan-to-Value financing on non-warrantable condos.
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I also really like this condo questionnnaire - it asks most of the questions I would be asking as new buyer. There is no reason why, if you are interested in buying a condo, that the Managing Agent should not complete this for you. They may charge a fee, and if I had my eye on a condo, I would ask the seller to pay for it. The fees I have seen are quite negligible. I can't see why they wouldn't since it shows you have a solid interest and not being a tire kicker.

Additional questions I would be asking:
1) How many unit owners are 60, 90, 120 days delinquent in assessments
2) How many in foreclosure?
3) Does the Association have a reserve fund and how much?

As far as spending an application fee to a Bank/Broker/Lender, a fool is soon parted with his/her money. If you have your questionnaire in tow, there is no reason why the Lender can not send it to their underwriting team or call the Condo division of a Bank. The larger Banks have Condo specialists. If anyone tells you you have to pay a fee to apply and find out if 1) the condo is unwarrantable and 2) they do or don't offer mortgages on unwarrantable condos, then run, don't walk, to the next Lender.

 

[TheSheep]

Originally Posted by TheSheep
"Deserve" is a cruel shoe, Ms. Shelly.

:roll: Oh please...with all the red flags that are flying warning of the greed, fraud and corruption that has been (and continues to be) going on in Real Estate "investment"...if they don't get it by now, then yes--they pretty much deserve to be taken to the cleaners--culling the herd, you might say.

Tsk. :bicycle: A hard edge you have, Ms. Shilly; a black 'n white look at a world mostly grey I would say. Perhaps someone ran over your kitten in your early years? This would explain your lack of compassion married to noticeable aggression for those who made honest investments and received less or more than what they deserved.

Perhaps your anger is centered on my new relationship with Joshua, who has an obvious shine for me.

Either of ways, when one uses such a broad paint brush on the "them there" world as you, the painter is painted as well.

 

[Joe Mammy]

Mango gave us some very good posting. Any condo sales contract will be accompanied by an addendum that will state that at seller's expense the buyer will be provided a questionaire from the association as well as the condo docs and current year-end financials. Here is the addendum:

http://tinyurl.com/48dny8

The buyer can kill the deal within 3 days after receiving.

I have seen associations state within the questionaire that they have no knowledge of percentage of renters within the building and answer n/a.

Have you touched on the lender's criteria for condotels? If determined to be a condotel some lenders will approve a loan but at a much higher interest rate. Factors include any one of the following:
1. One night rent available.
2. Can book online.
3. Onsite food delivery.
4. Check in front desk.

 

[Matt J]

Sheep do ewer research. SHELLY is a guy. ;-)