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Wysiwyg6000, Home Buyer in

How to get financing on condo with HOA litigation?

Asked by Wysiwyg6000, Thu Apr 25, 2013

Our community new relatively new and our HOA is suing the builder for various defects around the premises. People have been buying and selling these condos for the past 8 years with no issues, but all of a sudden now there's a problem as no one can get mortgages because of this. We all seem to be at a deadlock standstill since buyers are coming in with 20% down but the banks are pulling out. How are we supposed to sell our condos if no one can get a mortgage? Cash buyers are extremely rare to find. Are there any lenders that will give people a mortgage in spite of this or are we all doomed forever?

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Having trouble getting a Florida condo mortgage because the condo you are interested in is being denied by your Florida mortgage lender? Florida mortgage offers condominium mortgage loans on many Florida condos projects that are not Fannie Mae approved and which other Florida mortgage lenders consider not financeable.
0 votes Thank Flag Link Wed May 13, 2015
Hello, I am seller in Piscataway, NJ (Birch Glen) I already have a buyer lined up, the buyer has occupied the unit under use and occupancy contract, the use and occupancy expired on Dec 31st so we are now on month to month use and occupancy agreement. Unfortunately, the buyer was about to close on Dec 31st had a mortgage commitment and later the bank backed out. Now the buyer is still trying to get a mortgage and banks are not cooperating (Buyer is ready to put 20 % down) and as far as i know has great credit. HOA isin litigation with the builder my unit which i am selling is not affected based on the inspections performed by the engineer. The buyer is all settled and is ready to purchase, i have to sell the unit as i have moved out to an apartment with a lease for 1 year, so if i request to vacate the buyer i am double financial obligation (rent &mortgage) the rent the buyer is paying under use and occupancy agreement does not cover all my costs (MORTGAGE+TAXES+HOAFEES) i am putting $600 out of pocket to keep the property payments in tact and + my rent for my apartment.

Can some one help me and my buyer find a mortgage????
0 votes Thank Flag Link Sat Feb 22, 2014
It sounds like you need to talk to a lawyer about your specific situation. Otherwise I can't see you finding a buyer in that situation. There aren't a lot of options besides turning to the law. The banks won't be able to help you out of this situation. |
Flag Wed Jan 7, 2015
I am resident of the same community. Were you able to find a lender? If yes, can you please share which company you had worked with? I have been unsuccessful in trying to find a lender for my house. I do not see an end in sight for the pending litigation and it hurts the wallet.
Flag Fri Oct 3, 2014
I am a resident of the same community and I am writing to find out if you were able to find a lender? If yes, would you please share the contact of the company that you had worked with. I cannot see an end in sight for this litigation and it is hurting the wallet.
Flag Fri Oct 3, 2014
We have helped many buyers and sellers in this situation where litigation exists whether something regarding the developer or slip and falls etc I would be available to discuss for properties in NJ and NY.
0 votes Thank Flag Link Fri Oct 18, 2013
I am trying to sell a condo that has some litigation issues and am looking for approved lenders - I know they exist - I just don't know who they are - so any insight would be much appreciated - in Northern NJ
Flag Mon Jun 2, 2014
Can you please contact me as i am seller and my buyer is not getting a mortgage
Flag Sat Feb 22, 2014
We specialize in funding loans for condo's with HOA litigation and work with the big construction defect attorneys in CA. Rates are about .375% higher than conventional and require a 20% down payment and a 660 credit score. Google HOA Condo Litigation Loans .com for more info. Thanks.
0 votes Thank Flag Link Sat Jul 27, 2013
Hi Sorry for the late response . Universal Capital Mortgage in Woodland Hills.

Flag Thu Nov 21, 2013
Dan thanks for your answer. I have a condo here in playa vista that I would like to refinance but have been told for the last couple of years I could not due to HOA and builder suit. What is your companies name so that I can contact you all for a quote?
Flag Wed Oct 30, 2013
This is becoming a very common problem that winds up affecting the entire community. Not only can buyers not get a mortgage but also existing owners can't refinance their homes either. You might want to consult with a lawyer as well as a local lender to see what options you have. more than likely you will have to wait it out until the issues are resolved.
0 votes Thank Flag Link Sat Apr 27, 2013
I have alot programs as long as the quailifcation of the buyer exist to work with these types of issuses.

Any one needs help with financing, feel free to contact me for NJ and NY properties.
0 votes Thank Flag Link Fri Apr 26, 2013
The legal process will move at it's pace.
Since your HOA is the complaintant, you can keep the pressure on the HOA to reach a solutions as soon as possible.
and there's always a however,
the builder has every owner in the community in a headlock. They can stall and stall and stall and stall and ONLY the onwers (who are also the HOA) are punished. But you were informed regarding this.
Recently had a roofer hold a community hostage for a year over a $30,000 billing issue.
It was resolved and peace returned to the kingdom.
You are not doomed forever. Be aware, as a member of the HOA, it is highly likely you voted to pursue this litigation. Now, you, as an onwer, are requred to become equally creative with your selling strategies.
That is why you hire muliti-dimensional real estate professionals. These pro's will know where to direct buyers and the best stragegies for selling. You may actually be in a MORE profitable position if you exercise patience.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
0 votes Thank Flag Link Fri Apr 26, 2013
there is at least one particular builder that has a lot of problems and its is certainly a bind. Biggest issue with finance is that once litigation is under way we find that the FHA will pull its approval and without FHA financing most of the banks follow suite. There is one large development in Clifton where this has happened.
Often what happens is that when the HOA litigation commences everybody pulls out but eventually when the dust settles (pardon the pun) the lenders start to trickle back - often starting with local S & L's but that takes time.
Of course this process will tend to depress prices but that it turn will start to attract cash buyers and once a few units change hand then the situation can start to improve.
I know of another where HOA inspired litigation is progressing along. Comprehensive inspections have been done and pretty much identify all the problems in each individual unit which is a great help to a potential buyer. As a result it appears that lenders are beginning to trickle back in this one development.
No you are not doomed for ever but it may take a while
0 votes Thank Flag Link Fri Apr 26, 2013
Unfortunately you're learning a very hard lesson. Condos have always been more difficult to get financing on than other properties and lawsuits are a huge red flag to lenders. You're HOA needs to wrap up it's legal actions and get the development re-listed as approved by Fannie Mae for lenders who ultimately sell the mortgages they write on the secondary market.

Hard Money lenders aren't going to be appealing to most borrowers as they'll want above average interest rates and as you yourself stated there's a limit to cash buyers.

You should consult with a lawyer who specializes in real estate (not litigation) and find out exactly what it's' going to take to get your association back in a position where lenders will be able to write mortgages for sales int he development.

Irina Karan's suggest to try and find a small local bank who might want to offer mortgages there is a good one, but unless their willing to hold them in house, I'm afraid even this won't work. Lenders typically want to sell their mortgages on the secondary market which means your association has to be on the Federally approved list, which means among other things, no lawsuits, not too many investor owned units, and not too many owners delinquent on the HOA fees among other things.
0 votes Thank Flag Link Fri Apr 26, 2013
Yes, this is a major issue, and hard money lenders are probably the only ones that would do it.
You could also explore the local lenders - talk to the bank presidents/lending committees and see if they could do a portfolio type of loan for your community.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
0 votes Thank Flag Link Fri Apr 26, 2013
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