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Old 04-08-2009, 04:40 PM
 
Location: Louisville KY Metro area
4,809 posts, read 8,264,356 times
Reputation: 1958

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Folks for years, I have argued that condo ownership has a lot more downsides than benefits. Now, one of those downsides is rearing its ugly head. Lenders are being forced to look at condos in a whole new light. Because the rules have tightened so much on condo lending, there are fewer capable buyers and therefore, the demand is down and thus lots of defaults on mortgages through no fault of those paying their mortgages.
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Old 04-08-2009, 04:48 PM
Status: "No, I am your favorite agent." (set 7 days ago)
 
Location: South Metro Denver for 25 years
8,673 posts, read 19,330,735 times
Reputation: 4404
Where does thins information come from?
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Old 04-08-2009, 07:14 PM
 
1,283 posts, read 1,278,041 times
Reputation: 973
For those wishing to borrow for condos (with FNM/FM):

New condo loan rules could hurt distressed areas: Associated Press Business News: FNM - MSN Money (http://news.moneycentral.msn.com/ticker/article.aspx?Feed=AP&Date=20090320&ID=9716079&Symb ol=FNM - broken link)

States that if more than 15% of condo owners within the building are behind with their HOA fees the loan will be declined.

Also that if less than 70% of units in a new or conversion condo building are sold or under contract then the loan will be declined.


MORTGAGE RATES REPORT: Condo Mortgages Seen As "Risky" and Will Cost More April 1, 2009

Basically saying that borrowers who do not have a 25% deposit/downpayment and will therefore most likely be taking a FNM/FM loan will be charged more to do so. Either as an additional "upfront" fee at closing or through a higher interest rate.


Oh and this.......

http://realconcepts.blogspot.com/200...-to-condo.html

Last edited by London Girl; 04-08-2009 at 07:24 PM..
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Old 04-08-2009, 11:44 PM
 
Location: Colorado Springs, CO
1,571 posts, read 3,514,191 times
Reputation: 1317
I think it's wise to remember the article is talking about Florida. Florida has one of the worst hit states in the union.

In our area, Colorado, the biggest difference I have found it that closing takes longer with a condo. In large part becasue the governing documents are now having to go through underwriting. Also, if a condo complex is not already FHA approved, it's nearly impossible to get approval for FHA.
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Old 04-09-2009, 05:57 AM
 
Location: Louisville KY Metro area
4,809 posts, read 8,264,356 times
Reputation: 1958
I wrote this warning for all people buying a condo anywhere. There are risks to condo ownership that few people are made aware of when buying. In 2005, long before the crash, a near-by condo-complex had failed to maintain the common areas due to lack of enough fee income. No property in the complex was marketable for even the original "new" price the units sold for when originally built. Naturally in a community of 100 or even 10 families, transition occurs. In this situation, we had short sales and foreclosures which tragically effected those who paid their mortgages, paid their condo fees, and were overall good neighbors.
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