I am a Mortgage Broker and have done FHA loans with spot approvals consistently since 1997.
I will address this from as many angles as I can:
1. The Lender or Broker did not do their job well. In order to get a spot approval, the Lender requests a Condo questionnaire from the Condo Management company. They look for certain things on there. The spot approval will usually be denied if:
a. There is a high percentage of rentals in the building.
b. The association is involved in a lawsuit
c. the association has "first right of refusal" if anyone wants to sell the unit
d. The association does not have the required amount of reserves, insurance or other requirements to fulfill the FHA guidelines
These are some of the major things they look at.
If the Processor on your loan had reviewed the condo questionnaire after gertting it back, it would have been discovered right away that you could not get a spot approval, and you would not have had to go through the emotional trauma of having your condo not be approved for an FHA loan.
As a matter of fact, the reason for the denial might be something reversible, but your Lender might just not want to have to deal with the hard of work getiting enough information to make that decision. Remember, a Company is only as good as it's employees.
Please look me up at http://www.marvelmortgage.com
or call us at (773) 779-1190. and let us take a look at your situation. I would love to take this challenge on, and see how we can resolve it.
Nike Fasanya, CMC
Marvel Ventures Mortgage, Inc