Why Do I Need to Jump Through All These HOOPS During My Condo Purchase?

By
Mortgage and Lending with www.genemundt.com NMLS #216987

 

 

 

Why Do I Need to Jump Through
All These Hoops During My Condo Purchase?

 

 

 

     A recent blog by  Anna "Banana" Kruchten, Phoenix Property Shoppe (Phoenix, AZ) regarding a challenging condominium  transaction she had pending, prompted quite a conversation on the  ActiveRain  website and Facebook too. 

 
Hoping to buy a Condo?  Contact Gene Mundt, Mortgage Lender     That didn't really surprise me.  I'm asked questions regarding condo sales and purchases all the time.  From every sides of the deal, whether it be the  Purchase, Sale, Mortgage Financing,  FHA approval,  or Appraising.
 
 
 
 
      Basically the questions always boil down to ....  Why all the fuss?  Why the 3rd degree?  How do these questions and requests even apply?
 
 
     The long answer?  It can be complex, but the answer is tied to the large number of foreclosures that have resulted in the condominium market during this latest recession.  Banks have gotten downright skittish about condominium lending because of them.  Rightfully so, in some cases.
 
 
      But the more direct answer that usually effects my client(s), is typically found within the condominium Association for the unit being transacted, not the condo unit itself.  Simply, it is the condominium ASSOCIATION,  its overall financial health, and its activities that often draws the attention and scrutiny of mortgage Underwriters.  
 
 
      Issues that typically draw the attention of Underwriters are those that arise from restrictive condo Association rules, poor management of an Association, or lack of working funds available.
 
 
 
 
     The number of vacant condo units within an Association can be a red flag also.  The  ratio  of tenant-occupied VS investor-owned units draws questions.  Missed condo fees, late or non-existent Association payments by unit owners, the physical condition of the common areas, insurance concerns, and many many more problems give Underwriters pause.
 
 
     Whew!  It's not your imagination.  Condo properties, and their Associations, are subject to many more rules, regulations, and conditions than other types of properties are.  And the number of each of those is only growing. 
 
     Why?  Condominiums have been in the forefront of foreclosures in many areas of our country ...  and that reality has come home to roost in the last few years. 
 
 
 
 
You don't have to jump thru hoops!  It's Easy ... Contact Gene Mundt, Mortgage Lender     Banks have obviously taken notice.  And to better position and protect themselves moving forward, they've enacted the seemingly endless number of "hoops" that new buyers, sellers, agents, and mortgage originators (those representing potential new buyers), must jump through.  It's been my observation that often those "hoops" are directly connected to the "health" of the condo Association in which the condo unit/sale is found. 
 
 
     When, as in  Anna Kruchten's condominium  short-sale  transaction in Phoenix, AZ,  the questions from Underwriters seem almost silly ... my inner-alarm goes off.  Sounds like Anna's had too, as we shared many of the same reactions and concerns when we communicated.  Only time will tell if we were right in our assumptions.
 
 
     But now, specifically we're talking about YOUR condo transaction ... and the Underwriter is asking questions and requesting further documentation.  What happens next?  What should you do?
 
 
     Comply!  Produce the info or documentation that is being requested as quickly and as thoroughly as possible.  Because I can tell you from experience, the Underwriter isn't going to budge or approve a thing until they get what they want or until their questions are resolved.
 
     I've offered this suggestion in  prior blog posts.  I'm reiterating it here.
If YOU are considering the purchase of a condominium now or in the future ...surround yourself with a real estate agent and  mortgage professional that have experience and expertise in the challenging condominium market and condo transactions. 

     The professionals you choose have a huge impact on the outcome of your transaction.  If you're buying a condo in today's challenging housing market, it's not the time to work with rookies.

     Why Do I Need to Jump Through All These Hoops During My Condo Purchase?    Those "hoops" represent underwriting concerns. The Underwriter is raising those concerns to protect the interests of ALL involved within the new condominium purchase.  Yes, yes.  That protection includes the banks' interests too. Totally true. 
 
 
 
     But it's true that the questions being raised can be in YOUR best interests as well.   And it's better to raise questions and hammer out potential concerns prior to your buying, rather than after.
    
 
 
 
 
      *  Looking for a  Will County or Chicagoland area  Mortgage Lender  with extensive experience and expertise to assist you during your condo financing?  Contact me today.  I'll put my 35+ years of mortgage lending and appraising experience to work on your behalf.
     I can be found through any of the following:
Cell/Text:    708.921.6331 
Email:  genemundt
Skype:    630.219.1316 
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Gene Mundt

Regional Manager - Mortgage Lender

American Portfolio Mortgage Corp.

                                                                    Personal NMLS #216987

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Gene Mundt, Mortgage Lender, a Lender with 36 years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL.  Gene Mundt, Mortgage Lender can be contacted at: 

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  1. Gabe Sanders 08/06/2012 03:26 AM
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Topic:
Lending / Financial
Location:
Illinois Will County Joliet
Groups:
Chicagoland and Northern Illinois Real Estate
Posts to Localism
Mortgages
1st Time Buyers
BananaTude
Tags:
underwriters
mortgage processing
buying a home
buying a condo
fha lending approval
condominium association
condo
condominiums

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Rainmaker
154,450
Randy Mitchelson
Internet Marketing Expert, Author, Activist
iPartnerMedia.com and Homeland Heroes Home Loans

Well said. I have fielded condo questions recently too. The financial health of some complexes leaves a lot to be desired. Prospective buyers should educate themselves about the positives and negatives of condo living and the downstream risks. Don't fall in love with a unit until you know all the facts about the association. Also, some complexes have both a master association and a condo association which both charges fees so be certain about all the monthly, quarterly costs before you sign a purchase contract. 

July 31, 2012 09:27 AM
Rainmaker
673,677
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

Amen, Randy.  So much to know ... and you prove my point about why it's so important to work with a professional that knows and understands these things.  It can make all the difference in the world to the success of the transaction ... and to your wallet ...

Glad to meet you!  Will be watching for your posts ...

Gene

July 31, 2012 09:40 AM
Ambassador
1,406,142
Anna Banana Kruchten
Phoenix Real Estate Agent, CRB, CRS 602-380-4886
Phoenix Property Shoppe

Gene we've had condo issues previously and we've always found a way to make them work. The lenders involved were part of the solution which makes a huge difference.  The one involved in my current transaction simply doesn't communicate. I learn more from title agent than the lender or the buyers agent. When I was on the buyers side on previous condo sales we did everything we could for our clients to get the units closed.  And yes it's 'dicey' to say the least in our market and condo conversions and hoa's and there is always something that comes up. 

July 31, 2012 12:58 PM
Rainmaker
673,677
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

Anna:  You prove my point perfectly.  The professional you choose to work with ... in any capacity ... makes a world of difference.  I'm glad to hear that you have at least SOMEONE that is communicating with you ... the title agent and buyer's agent, in this case.  Something is better than nothing.  Hopefully this comes to a successful resolution for you.  Please keep me informed ...  best of luck ...

Gene

July 31, 2012 01:06 PM
Ambassador
1,406,142
Anna Banana Kruchten
Phoenix Real Estate Agent, CRB, CRS 602-380-4886
Phoenix Property Shoppe

Exactly Gene.....experience can make or break a deal and the ability to be solution orientated - and of course a team player!

July 31, 2012 01:23 PM
Rainmaker
673,677
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

Anna:  Got to admit, I just don't get NOT being a team player.  Especially these days when ... to borrow Hillary Clinton's tagline ... "it takes a village" ... or TEAM, in so many instances.  The closing ... and every professional's paycheck depends on this being a successful transaction ... so why oh why would anyone NOT play nice??  Again, it boggles my mind and I don't get it.  I'm keeping my fingers crossed for you and your client ...

Gene

July 31, 2012 01:47 PM
Ambassador
1,159,905
Tammie White
TW Realty Group, Franklin TN, South of Nashville
Benchmark Realty, LLC (615) 495-0752 or www.TWRealtyGroup.net

With so many affordable single-family home options in Franklin TN, I discourage condo purchases. Primarily due to the high association fees. I tell buyers those additional funds are better put towards a single-family home purchase rather than condo fees. It appears they avoid a whole lot of headaches as well.

July 31, 2012 02:04 PM
Rainmaker
673,677
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

As the expert in your area Tammie, you give advice as you see it.  I would think your buyers would greatly appreciate it.  I know I respect it.  It's exactly what they are working with you for .. your experienced advice!  Condos can be so tricky.  The Association and area it is located in determines so much.  For those that do their homework and it's a good fit for lifestyle, okay.  But that homework is so very crucial ... and they need to rely on experts such as yourself for quality, reliable info ...

Gene

July 31, 2012 02:13 PM
Rainmaker
980,819
Nick T Pappas
Madison & Huntsville Alabama Real Estate Resource
Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL

Gene, Home Owners Associations are coming under more scrutiny now.  We just provided space in our office for a local consumer advocate to speak and answer questions about HOA's and providing tons of info that buyers need to know.  Of course we had a local attorney on board as well to clarify and answer question about CCR's and anything out side the realm of the lay person.  Great post.  Suggested.

July 31, 2012 04:08 PM
Rainmaker
673,677
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

I love the fact that you are taking steps to educate local buyers regarding condo purchases and HOA's.  Absolutely the best .. and right thing to do on this topic.  Condos are tough.  Potential buyers need to know that and be prepared.  Really give this the thumbs-up ...

Gene

July 31, 2012 06:48 PM
Rainer
204,518
Mark Delgado
Benicia and Vallejo, Property Management, rental h
houses for rent, Solano County & Glen Cove

I actually have to comment on two points on this very impressive blog post.  First, as simple as this sounds I do know that formatting and appearance take time and you've published a very readable, well-presented blog that manages to share a lot of information without being overwhelming.  Second, well, you've shared a lot of valuable information that is useful to others.  Kudos to you on both fronts. 

July 31, 2012 10:10 PM
Rainmaker
1,775,746
Gabe Sanders
Stuart Florida Real Estate
the BlueWater Realty team specializing in Martin County Residential Homes, Condos and Land Sales

Gene, great post!  Condo financing is especially cumbersome here in my area of Florida.

August 01, 2012 05:04 AM
Rainmaker
673,677
Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

Thank you much, Mark.  Your comment is very appreciated.  Sometimes presenting mortgage info is tricky, as there is such a wide variance of knowledge between professionals reading it ... and consumer.  I'm glad you approved of the post ..

Gabe:  Condos are ... challenging transactions way too often, no matter their location.  It's best to be educated to the process prior to entering it.  And even then, you best choose your professionals wisely.   I appreciate your thumbs-up!

Gene

August 01, 2012 01:29 PM
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Rainmaker
673,677

Gene Mundt

Mortgage Lender - Chicago/Chicagoland Mortgages
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