Wednesday, May 07, 2008
Mortgage Lending for Chicago Condos Maddening
Today, a major bank denied a mortgage for my client to buy into an established newer construction condo building for two reasons:
1. Over 20 percent of the building's owners were delinquent in assessment payments (12 unit building with an involved association and $7,000 in reserves). So, the late payments couldn't be too bad. Plus, the minutes showed the association had collected on late payments. You like a reserve fund at least $1,000 per unit in a smaller building like this, but the association is only about 3 years old.
2. Percentage of ownership of the commercial units in the building is over 20 percent.
The loan officer of the major bank decided to sit on this info for 10 days after appraisal came back and on the last day of my client's mortgage contingency. They should have at least informed her about the commercial space percentage of ownership from the beginning! Plus, they have been slow getting us the documentation so we may forward this to the seller's attorney. We have to meet the mortgage contingency, ask for an extension or kill the deal. The denial documentation will help us make the case.
This is just one more reason why I like clients (and buyers of my listings) to use a local mortgage broker who knows there stuff and comes referred. The local broker is on the phone with the agent and attorney getting the information real time about the property they are securing a loan for.
Here's a plug for my guy Phil Tully at Guaranteed Rate email@example.com
People call him all the time, don't like the truth and then go find a bank who makes loan promises they can't keep. Or, forgets details like the ones above until it's too late. No loan, no closing. Geez. You need a lender who will seek out the trouble spots well before your 30 days down the road.