Well that sucks, got denied on a refi because of my neighbors

[Squisher]

I was 24 days into my 30 day lock period when the loan processing agent told me that the underwriters would not allow a closing on my loan because the HOA has a delinquency rate on their dues of over 15%. I was getting a loan through the government sponsored HARP program and I guess this is one of their requirements. The dues were raised years ago to make up for the shortfall and the HOA is very solvent. We've got such a surplus that a part of every HOA meeting is usually devoted to what we're going to spend the money on.

From what I gather there are 144 homes in the sub and about 100 homes pay their dues on time. the other 44 homes wait until they're threatened with a lien a year down the road before they think of paying up. Some never pay, I guess expecting to foreclose down the line.

So now I guess I get to continue to pay $180 more a month on a 30 year fixed @5.625% rather than a 25 year fixed at 4.000% btw- I owe $160K on a house appraised at $175K which is why the HARP was just what I needed.

Although I've never had a problem living in an HOA I guess this is another reason not to be in one.

 

[UglyCasanova]

That sounds like bs. They didn't want to make you that loan for some reason and gave you that answer. Try a different lender. How would the underwriter even know the delinquency rate of the HOA fees anyways?

 

[Squisher]

That sounds like bs. They didn't want to make you that loan for some reason and gave you that answer. Try a different lender. How would the underwriter even know the delinquency rate of the HOA fees anyways?

They asked for the HOA board to fill out a questionnaire along with asking for a copy of the HOA budget and HOA bank statements.

I haven't gone through the loan process since '05 when I bought the house, but I was sure they were going to ask me what brand of socks do I wear.

 

[sactoking]

Welcome to the club, I can't get an FHA streamline to lower my payment because the .gov refused to consider my wife's commission income.

 

[jhansman]

Our last refi (which will be our last) was held up because a small stairway I built years ago that leads down from a retaining wall was in disrepair. Neve rmind that it led nowhere and was no longer used by anyone. I had to spend $200+ to make it "safe." When I asked, could I just remove it, I was told no, the lenders consider it part and parcel of the structure and would not fund the loan until it was repaired. Bottom line-the criteria for loan approval now is whatever the lender says it is.

 

[Squisher]

If it was just this lender I wouldn't feel so bad, but according to them it is part of the HARP program and I'm really not sure anyone will loan someone on 92% of the value of the house without PMI which would make the whole endeavor useless. I had actually gotten a preliminary approval from the underwriters on the loan and were just waiting to hear back from the HOA. We would have closed in 3 days.

 

[boomhower]

That sounds like bs. They didn't want to make you that loan for some reason and gave you that answer. Try a different lender. How would the underwriter even know the delinquency rate of the HOA fees anyways?

Pretty much all lenders use the same requirement.

 

[UglyCasanova]

Pretty much all lenders use the same requirement.

If so it is just a HARP requirement, although I couldn't find where though (I didn't look long however so I don't doubt that it may be there). Otherwise I have never come across where your HOA had to fill out anything regarding their delinquency rate or budget etc.

 

[OCGuy]

That is an investor overlay, not every lender requires the full HOA cert/questionaire.

<------ in the business.

Edit: For The DU Refi + (Fannie Mae) version of that refinance, I only have to ask 3 questions:

1. Is the project 100% Complete?

2. Is there any pending litigation against the HOA?

3. Is there any commercial use of the property?

 

[Capt Caveman]

If so it is just a HARP requirement, although I couldn't find where though (I didn't look long however so I don't doubt that it may be there). Otherwise I have never come across where your HOA had to fill out anything regarding their delinquency rate or budget etc.

It's pretty much standard.

 

[OCGuy]

Welcome to the club, I can't get an FHA streamline to lower my payment because the .gov refused to consider my wife's commission income.

2 Years is standard.

 

[UglyCasanova]

It's pretty much standard.

It's standard for what? I'm just saying that I work in the mortgage industry and I've never seen one. If it is not a HARP requirement (which I'm not convinced it is), then it is just that lender's overlay. He can probably just go down the street to a different lender who doesn't have the same overlay and get the refi done.

 

[Squisher]

That is an investor overlay, not every lender requires the full HOA cert/questionaire.

<------ in the business.

Edit: For The DU Refi + (Fannie Mae) version of that refinance, I only have to ask 3 questions:

1. Is the project 100% Complete?

2. Is there any pending litigation against the HOA?

3. Is there any commercial use of the property?

They sure did ask those questions in the first questionnaire they submitted, then they came up with a second questionnaire. Let me look in my emails, they copied me on most stuff.

Edit: I should have said that the subdivision is a site condo, so they were doing the loan as if these were attached units. Which they're not. The underwriters even waived a fee for condos because THIS ISN'T A CONDO!!!!


Not a condo:

Questionnaire:

1. Are all units, common areas and facilities within the project 100% complete ____ ____
and the project is not subject to additional phasing?
2. Have at least 90% of the total units been conveyed to purchasers other than _____ _____
the developer?
3. Are at least 51% of the units occupied as a primary residence or second home? _____ _____
4. Has control of the HOA been turned over to the unit owners? _____ _____
5. Are the units owned in fee simple and do the unit owners have the sole _____ _____
ownership interest in, and rights to the use of, the project&#8217;s facilities and common
areas?
Please explain any NO answers to questions 1-5______________________________________________
6. Does any single entity own more than 10% of the total units? _____ _____
7. Are there more than 15% of the condominium/association fee payments more _____ _____
than one month delinquent?
8. Is the project currently a party in any litigation? _____ _____
9. Is more than 20% of the total square footage of the project used for _____ _____
non-residential purpose?
Please explain any YES answers to questions 6-8: ____________________________________________
Certification
I, the undersigned, certify that to the best of my knowledge and belief, the information and statements
contained on this form are true and correct.
_________________________ _________________________
Signature Date
__________________________________ ________________________
Print Name and Title Telephone
PLEASE ATTACH DEC PAGE FROM HOA INSURANCE POLICY AND CURRENT BUDGET

 

[sactoking]

2 Years is standard.

Except she'd been at that job 2 years, and when we got the FHA loan in 2008 she had a different commission job that she wasn't at for 2 years and there were no problems.

 

[OCGuy]

Except she'd been at that job 2 years, and when we got the FHA loan in 2008 she had a different commission job that she wasn't at for 2 years and there were no problems.

Interesting. I can FHA streamline people with no appraisal or proof of income.

 

[Dirigible]

Suckiness confirmed.

Permission to kill offending neighbors granted.

 

[OutHouse]

wow so if nobody pays the HOA the bank can deny you a loan? screw that, just another reason to put on my list to stay out of HOA's.

 

[Squisher]

Suckiness confirmed.

Permission to kill offending neighbors granted.

Thank you, there is meeting on Thursday and I thought that maybe I would just vent, but seeing how I've killed before for nothing more than a half a pack of smokes and a Moon Pie I feel down right motivated.

 

[ponyo]

Sorry to hear that. I heard about the HOA % thing before but for some reason only figured it applied to townhouses and condos.

 

[postmortemIA]

another sucky one (it is in that questionnaire) is that percentage of renters have to be less than 50%.

 

[brianmanahan]

lol, hoa

 

[alkemyst]

That sounds like bs. They didn't want to make you that loan for some reason and gave you that answer. Try a different lender. How would the underwriter even know the delinquency rate of the HOA fees anyways?

Sad part is oddly with all the money the banks have at their disposal to work out 'deals', they are finding more and more reasons to deny loans.

Florida got something like $4 billion and so far not many are being helped.

 

[Bignate603]

If so it is just a HARP requirement, although I couldn't find where though (I didn't look long however so I don't doubt that it may be there). Otherwise I have never come across where your HOA had to fill out anything regarding their delinquency rate or budget etc.

I know that lenders will reject things based on the HOA, especially condos. If they're afraid the HOA will go belly up they don't want to take the risk of giving a loan.

 

[rudder]

Sad part is oddly with all the money the banks have at their disposal to work out 'deals', they are finding more and more reasons to deny loans.

Florida got something like $4 billion and so far not many are being helped.

Probably because the banks are making too much money sitting on that $4 billion.

 

[Thump553]

<-- So glad I live in a state with real zoning and no HOA.