U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 01-26-2009, 12:47 PM
 
4 posts, read 13,946 times
Reputation: 12

Advertisements

We're in the process of refinancing our 30Y fixed (6% of jumbo loan) to 15Y fixed (non jumbo). We have no other debt but this mortgage and have credit scores 800+.

We're looking at around $301K at payoff, which will be the amount we're refinancing. Been looking at American Interbank (americaninterbanc.com) since they have very competitive rates.

HOWEVER I was told that Fannie Mae just slapped a fee for condo loans because of the high default rate. I searched around and saw this article that explained:

Fannie Mae's added fee to crunch condo buyers -- chicagotribune.com

Even though ours is a (attached 2/lot) town home, legally it is classified as a condo and therefore we're subject to a whopping $4900 (if we decided to also buy .875 points to bring rate down to around 4.5% on 30 day lock) on top of our closing cost of around $2700 with this lender if we go for the 15 Y fixed.

Is there a different loan package to get around this ridiculous Fannie Mae fee? Even though it's supposed to be enacted April 1, 2009, the article suggests that many lenders are already imposing this fee - and at least this one lender I'm looking at is doing this.

Last edited by bacon128; 01-26-2009 at 12:49 PM.. Reason: clarify additional cost (points included)
Reply With Quote Quick reply to this message

 
Old 01-26-2009, 08:29 PM
 
Location: MID ATLANTIC
7,606 posts, read 17,664,631 times
Reputation: 8102
You are becoming upfront and personal with Fannie's Loan Level Pricing Adjustment. It's an add-on calculated due to the risk being experienced w/ condos. When defaults hit, the condo fee is the first item not paid. It's not uncommon to see foreclosed units rack up over 6 months in delinquencies. The remainder of the homeowners must pick up the tab, and inevitably, the condo fees are raised for all. Even worse, we are seeing more and more condos not even eligible for Fannie financing, because they cannot meet some basic requirements: percentage of owner occupants, number of investor owners of more than one unit (such as banks or Fannie Mae), litigation, % in delinquency. Maintenance becomes deferred and foreclosures continue to climb. Ugly, ugly circle.

There are pockets of portfolio money w/out the adjustments, but no one would want the financing. It's usually higher than market anyway, but even then, they are adjustable rate mortgages. So, to answer your question, yes, it's there, but not with more favorable terms. (More for those that can't qualify for the Fannie financing). I can only offer if you are in a condo now, your unit is appraised, and you are ready to go, to move forward sooner, than later. I only see stricter guidelines placed on condominiums, making financing an unbelievable challenge.
Reply With Quote Quick reply to this message
 
Old 01-29-2009, 11:42 PM
 
41 posts, read 361,626 times
Reputation: 30
Quote:
Originally Posted by SmartMoney View Post
I can only offer if you are in a condo now, your unit is appraised, and you are ready to go, to move forward sooner, than later. I only see stricter guidelines placed on condominiums, making financing an unbelievable challenge.

Profound...
Reply With Quote Quick reply to this message
 
Old 01-31-2009, 05:19 PM
 
10 posts, read 47,326 times
Reputation: 13
You could keep searching to see if there are some lenders not yet implementing this fee. My bank just started this fee just in the past week or so and I would imagine there is someone not yet charging the fee. But if you do finid someone...you will need to lockin right away.
Reply With Quote Quick reply to this message
 
Old 01-31-2009, 10:36 PM
 
Location: Dallas(Lake Highlands)
126 posts, read 407,184 times
Reputation: 80
I'm not clear on a point. Will this penalty apply only to refinancing on a condo or for all types of mortgage loans. I'm planning on putting my townhome on the market in the Fall. Now I'm deeply concerned.
Reply With Quote Quick reply to this message
 
Old 02-01-2009, 09:54 AM
 
10 posts, read 47,326 times
Reputation: 13
It would affect both purchase and refinances.
Reply With Quote Quick reply to this message
 
Old 02-02-2009, 08:43 PM
 
Location: MID ATLANTIC
7,606 posts, read 17,664,631 times
Reputation: 8102
It's for condo's only, where the land is not owned. It is driven by loan to values over 75%. The other additional area was to investor loans, we saw additional add-ons or LLPAs. As Fannie and Freddie uncover the problem areas, they will continue to increase adjustments. For example, instead of the loans over 75%, they'll just eliminate the loan to value and just say all condos.

For the most part, town houses are still regarded as a single family detached. Since almost all have required Homeowner Association Fees, it could be a future target. When a large percentage of a community does not pay their share, the community as a whole suffers, driving values down and risks higher. Keep your pulse on your HOA's health.

FYI, Fannie issues a due date when the LLPA's go into effect. We are given warning, but not all lenders share the info with their customers until it's in effect.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top