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Hi all, We are one week away from our closing day (6/27) and all of a sudden BOA told us that they will not close the loan until the HOA renews the Master Insurance policy, which expires next month(7/7). This is really a shock for us since we have no control over when the HOA renews the policy! They might renew it on 7/1 or 7/5. Either way they will not have any problem as long as there's no gap. But to us, if we dont close on time we are gonna lose the property and the thousands of dollars already paid. Plus the termination fee of our current apt.
We are first time homebuyer in North Carolina and we are buying a townhouse. I'm not sure if there's such requirements that certain periods of coverage remain on the policy at he time of loan funding? Did anyone have similar issue before? And I assume the reason the bank is requesting this is because they are afraid the policy wont get renewed and there will be no coverage to the outside of the property.
Right now I'm thinking of switching to a homeowner insurance which covers both walls in and the outside like the one for single family does and then switch back to HO-6 when the loan is done and the HOA finishes renewing their master policy. (The policy we currently have is HO-6 which only covers the inside.) Just wonder if this is doable and will cause any problem later?
I'm really frustrated and not sure what to do at this point.... Anyone has ideas?
If your townhouse is fee simple and not condo then you own it all, although the plan for replacement of siding and roofing that runs the length of a few townhouses has to be shared since they have no individual stopping point.
About the HOA insurance. Part of being in a HOA is having to go by whatever is in the declaration, bylaws and what happens at board meetings.
Can you get an extension of your closing date? If your loan is expiring, you could also ask for a loan commitment extention, which needs to be paid for.
The HOA due includes the master insurance premium. And I understand that the HOA has their own schedule of doing things so it might be impossible for them to renew the policy in advance just to help us out...
We will try and see if the seller is willing to extend the closing date but it's up to them. Finger crossed. I just wanted to see if I can do something at our end to solve the issue.
I just feel its somewhat unreasonable for the bank to request that kind of thing. Theres always a question mark in my mind. What if the policy expires in August or September. We will have to wait until then to close? I really wanted to know what's the purpose of doing so so that we know how to help moving the process forward.
I used to process the bills for an HOA and the bills were usually quarterly. I wouldn't get the bill (renewal) until a month before it expired. Its possible they have already sent in payment for the renewal. Simply tell the person at the HOA the situation and you need a copy of the new rider in order to complete your sale. Its only a 1 or 2 page paper showing coverage and expiration date.
If they have not renewed you will have to delay the sale until they renew. The HOA can simply make a phone call to renew and have the new rider (proof of insurance) faxed to you immediately.
LOL. Unreasonable? The bank is lending you hundreds of thousands of dollars, they can request you do jumping jacks if you really want the money.
I felt this way because no one ever told us in advance. If we know the HOA insurance could be a problem we would plan ahead. The fact is, we were never told what they need until late in this process. I dont think figuring out the expiration date for the policy would take such a long time that it is brought out this late. It feels like we are trapped in a hole and can only stuck with it.
I understand the bank is lending the money but it doesn't mean everything they do is reasonable right?
I used to process the bills for an HOA and the bills were usually quarterly. I wouldn't get the bill (renewal) until a month before it expired. Its possible they have already sent in payment for the renewal. Simply tell the person at the HOA the situation and you need a copy of the new rider in order to complete your sale. Its only a 1 or 2 page paper showing coverage and expiration date.
If they have not renewed you will have to delay the sale until they renew. The HOA can simply make a phone call to renew and have the new rider (proof of insurance) faxed to you immediately.
I cant imagine them not renewing.
Yeah... I hope they could do that so we don't have to suffer from the stress.....arrrrrr
Otherwise I will have to buy the coverage by myself........
The HOA due includes the master insurance premium. And I understand that the HOA has their own schedule of doing things so it might be impossible for them to renew the policy in advance just to help us out...
We will try and see if the seller is willing to extend the closing date but it's up to them. Finger crossed. I just wanted to see if I can do something at our end to solve the issue.
I just feel its somewhat unreasonable for the bank to request that kind of thing. Theres always a question mark in my mind. What if the policy expires in August or September. We will have to wait until then to close? I really wanted to know what's the purpose of doing so so that we know how to help moving the process forward.
Thanks!!!
BOA and HOAs can both be very messed up these days. So lenders need to cover themselves as well as possible. The settlement office should be asking your HOA manager for a letter saying the current owner has paid up on the dues, too. You should also ascertain just what insurance your hoa has regarding your property and what you need to purchase for yourself. Some, even on fee simple townhomes, non-condos, cover siding, even balconies, but not the patio and back and front grass. Some do a combo of some sort where you would need to get your own insurance for certain parts of the exterior, while they cover others.
Just got response from HOA and the bank today. HOA said they will not renew the policy before July. Bank had moved our case to their Compliance Dept. and they said we are good to close on time! So far I'm indeed confused but whatever. As long as they don't come back at the last minute asking for more, I'm done with it.
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Anyone has ideas?
