Believe it or not, I have not had a buyer purchase with a mortgage since 2006. This being stated, prior to that magical year, I have been involved with hundreds of transactions, which involved financing for properties, even foreclosures and short sales. The later being the most difficult of experiences (on the agent side and the appraiser side).
I am embarrassed to write that I missed a very, VERY important ruling (in red below) that was put in motion by Fannie Mae on March 1:
“The government-backed mortgage-finance company stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51%. In addition, the company won’t back loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single-entity.”
Those words in red affect every condo buyer I have ever represented –even the cash buyers.
Three days and 2 sleep deprived nights ago, I received a call from an owner who I sold to in 2007 (cash purchase)….
Because of the current low interest rates, the owners thought they would take a mortgage on the 2007 unit and purchase another unit in NYC because the prices are pretty good right now.
Their phone call was to inform me that the lender would not lend on their unit because “one entity” owned 18.14% of the units in the building and there are too many rentals in the building. The subject building had been put on the “list” of buildings not to lend to–the owners were not happy and wanted to back out of the other deal because of the “principle” of it all –NOT because they did not necessarily have the cash to follow through on the new apartment.
I have to say, I understood their perspective. Most of us feel that if you dump cash into real estate you are going to be able to draw on it in the future – right? Not the case anymore…it is a new time in the United States with a lot of change, which concerns all of us, on some level.
I was told by executive leaders in the NYC real estate community, multiple loan officers and other highly experienced brokers: “It is what it is-nothing can be done.”
Guess what? I said, “No, it cannot be…” and I started getting to work. I am not going to get into all of the tedious things I had to do or all of the individuals I had to “push” to help me retrieve the info I needed; but I got the building off the “list”.
My entire life I have had (some) issues with simply not accepting: “it is just the way it is – let is rest.” At times it has been my demise…
I don’t know why I am so compelled to say “No, there must be a way.” I guess if I haven’t had some success with converting the “nothing can be done” to something has been done (but differently), I would not be the fighter, I am–the “believer” that everything IS possible…
Maybe, we are so accepting of the “nothing can be done” mentality because we are not ready to see that it CAN be done.
Dominos may fall; but, the real game does get started until they are down.