However, it is if you get that far since the lender will be leery of your final DTI due to pending litigation.
Appreciate all the responses. Litigation involves only one former owner. The lawsuit does not involve with anything structural. I was able to find a mortgage broker who has all the HOA docs for the condo complex that I want to buy into. I have received approval for a loan already.
As you can see from prior responses, your credit worthiness and amount of down payment are NOT the issue. The issue is the level of liability exposure for the HOA on the lawsuit. If you have more information on the nature of the litigation, including the claimed amount of damages, then it will be easier for a lender to determine if they can do the loan.
I have a couple of great lenders who would be willing to look at this issue for you. If you need a referral, please feel comfortable contacting me directly. My contact information is below in the signature block.
Good luck in you home buying endeavors and Dare to Dream.
Shel-lee Davis, QSCÂ®
Certified Distressed Property Expert â€“ CDPEÂ®
Short Sale & Foreclosure Resource â€“ SFRÂ®
Certified HAFA Specialist â€“ CHSÂ®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
However, if several home owners are retained an attorney and files a class action lawsuit for something major (roofing, for instance), the chances of getting financing prior to settlement of the lawsuit is pretty much "slim to none". In other words, it is not about whether or not I (as a mortgage professional) can pull a bunny out of a hat as much as what is the potential liability of the HOA? Sometimes, in this type of situation, I can make miracles happen...sometimes not. Knowing the source and scope of the litigation is the key. Best of luck to you.
The buyer funded their loan through Wells Fargo, just email the loan officer at: Eduardo.Caldera@WellsFargo.com, tell him I referred you & you're going through the same issue as the deal they did for 4900 N. Grand Ave. in Covina, they'll know what you're talking about.
Shoot me an email directly if you want to talk about this some more, I don't look back on this same Trulia thread for answers posted after mine.
Realtor Since 1996
Main Street Realtor
Short Sale Expert
If it is a SFR, or 2-4 unit, I would not have any issues with getting the loan approved as long as the appraiser does not make mention of it in the appraisal. Very rarely have I seen that happen on a SFR, or 2-4 unit property.
I would be happy to discuss this more with you. You can email me at firstname.lastname@example.org or call at 702-808-8328. I am approved to do loans in CA.
Rey Gallegos ( NMLS ID 557038)
Loan Officer | Branch Manager
W.J. Bradley Mortgage Capital LLC ( NV License # 504)
2200 Paseo Verde Pkwy. Ste. 100
Henderson, NV 89052
The information you have is critical to making a wise choice. If an HOA member is suing the association for non0performance this could be signs of bigger issues. We would recommend digging deeper to determine what this means to future owners.
Make sure you have the details before moving forward with this. Speaking with the president of the HOA and/or other board members and reviewing all available documents including the "annual report" may shed some light on this and clear the way for you.
San Fernando Real Estate Guy.