Financing a condo. that is in litigation

By
Industry Observer with Environment Control MLO#109666

Hello all: I hope you're having a great day and have big weekend plans.

I wanted to share with you an experience I recently had. I recently was approached by a couple who wanted to buy a downtown Seattle condo. The condo. complex had sued the developer which made it more difficult. In fact, I couldn't do the loan for that reason. In the Seattle area, there are a number of newer projects where there is currently litigation.

Even though I couldn't do the loan doesn't mean there aren't loans for a unit that is part of a project involved in a lawsuit. The bank that could do the loan sells directly to Fannie Mae so they could avoid the investor overlays. A bank who directly services the loan may also be an option.

Although I was disappointed that I couldn't do the loan as my relationship with my borrowers was strong, I learned something. Here is what I suggest. One, find out if the complex currently is part of a lawsuit. This isn't a deal breaker but it means most mortgage companies won't touch it. Ignore anyone who says they can do it. In our case, we couldn't because of our new compensation plan implemented in April of this year in addition to the fact we don't sell directly to Fannie Mae. I would bet most mortgage companies would be constricted as well.

If you can avoid condo. complexes with current litigation all the better. I realize it's attractive to buy that downtown high-rise condo. at a deep discount. It's just not as easy as it seems. I hope this has been helpful. Have a great day!

 

 

 

Posted by

Paul McFadden

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
Washington King County Bellevue
Groups:
Dedicated Bloggers
Mortgages
Puget Sound - WA Real Estate
Realtors Needing the services of the Lending Powers
Washington State Investors and Investment Opportunities
Tags:
condo complexes

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the woman to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the flag to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Anonymous
Anonymous
Anonymous

Great FYI's I have bookmarked for my clients !

... can you imagine we are only a week away from 4th of July where has year gone ! dallas homes for rent by owner dallas houses for rent by owner lynn911.com

Jun 26, 2011 12:50 PM #1
Ambassador
450,658
Paul McFadden
Environment Control - Kent, WA
Janitorial. Kent, WA.

Lynn: thanks. It's nice to see your smiling face here. Have a wonderful 4th!

 

 

Jun 27, 2011 03:53 PM #2
Rainmaker
573,698
Phil Leng
Keller Williams Eastside Market Center - Kirkland, WA
Phil Leng Team - Residential Real Estate Experts &

Hi Paul,

Good post.

I have one condo with a $41000 assessment, another with a $21000 assessment, and another with a lawsuit, just like you mentioned.

It is not as easy as identifying the best price and making an offer!

Thanks for sharing your expertise, and your experiences.

PHil

Jul 07, 2011 02:00 AM #3
Ambassador
450,658
Paul McFadden
Environment Control - Kent, WA
Janitorial. Kent, WA.

Phil: You're welcome! Have a great weekend!

Jul 09, 2011 01:53 PM #4
Rainmaker
338,859
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley R since 1976;408-565-8177

I just listed one in Silicon Valley.  Isn't every loan sold to Fannie or Freddie?

How should a Realtor find a lender who doesn't sell to Fannie or Freddie.

Dec 07, 2011 11:45 PM #5
Ambassador
450,658
Paul McFadden
Environment Control - Kent, WA
Janitorial. Kent, WA.

Nope. About 50% or so are. The rest are portfolio'd or the bank has the ability to sell directly to Fannie or Freddy preventing investor overlays. A portfolio lender might be a credit union or smaller community bank typically. I hope this helps!

Dec 07, 2011 11:48 PM #6
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the foot to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Ambassador
450,658

Paul McFadden

Janitorial. Kent, WA.
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the clock to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information