Hello all: I hope you're having a great day and have big weekend plans.
I wanted to share with you an experience I recently had. I recently was approached by a couple who wanted to buy a downtown Seattle condo. The condo. complex had sued the developer which made it more difficult. In fact, I couldn't do the loan for that reason. In the Seattle area, there are a number of newer projects where there is currently litigation.
Even though I couldn't do the loan doesn't mean there aren't loans for a unit that is part of a project involved in a lawsuit. The bank that could do the loan sells directly to Fannie Mae so they could avoid the investor overlays. A bank who directly services the loan may also be an option.
Although I was disappointed that I couldn't do the loan as my relationship with my borrowers was strong, I learned something. Here is what I suggest. One, find out if the complex currently is part of a lawsuit. This isn't a deal breaker but it means most mortgage companies won't touch it. Ignore anyone who says they can do it. In our case, we couldn't because of our new compensation plan implemented in April of this year in addition to the fact we don't sell directly to Fannie Mae. I would bet most mortgage companies would be constricted as well.
If you can avoid condo. complexes with current litigation all the better. I realize it's attractive to buy that downtown high-rise condo. at a deep discount. It's just not as easy as it seems. I hope this has been helpful. Have a great day!