Neighbor: Pay Thy Bill!

You already knew your neighbors could impact your sale.  How their home looks, how they act when they see someone coming to look at your home… it all matters because it impacts the buyer’s view of the neighborhood and of the home.  But neighbors can impact your ability to sell in other ways, too, like if they don’t pay their bills.

Delinquency: It’s long been a standard on FHA loans for condo purchases. The number of households who are delinquent in their condo association dues can not exceed 15% of the total homes in the association.  Today we’re seeing lenders for other types of loan looking at the delinquency rate of condo associations and, even home owner associations, before they will make a loan.  It’s a sign of the times.  More and more home owners and condo owners associations are being impacted by a growing number of households who are unable to pay the fees.  And, when that delinquency exceeds 15% it can be a big issue… It can mean difficulty finding a buyer for ANY HOME in the association.

I have a transaction I am working on right now… We ratified the contract rather easily.  The listing agent is available, cooperative, even pleasant to deal with.  The home inspection and appraisal went through without a hitch.  The lender is assuring me the buyers qualifications look good. Things are rolling along.  AND THEN… Then came the call from the lender.  The condo questionnaire came back and the delinquency is over 15%… Just barely over, but it’s over, and that means no loan.

In this case, we only need 3 people to pay their bill to reduce the delinquency to below the threshold and the loan can go through – THREE PEOPLE.

Neighbor, PAY THY BILL!

I am not sure how this will work out – I will keep you posted, but it’s a terrible situation to be in, because none of the parties to the transaction are responsible for this issue… and yet, we’re all being held accountable for the late payments of a few.  So, I will keep you posted.  I won’t let this kill the deal for my clients, although I do not know what the resolution will be – yet.

What I do know is that homeowners everywhere should take note.  When you’re interviewing management companies ask about their collection procedures, and hold them accountable.  Their ability to collect association dues can impact your ability to sell your home.

Stay tuned for the resolution – there will be one.  In the meantime, call your association and get a copy of your delinquency report.

And, Psst... If you're only reading this blog, you're not keeping up with the latest greatest updates from the real estate whisperer.  Check out the new blog at "The Real Estate Whisperer" and join me on Facebook at www.Facebook.com/TheRealEstateWhisperer.

New Help for Unemployed Homeowners

The Obama administration on Friday will announce changes to its Home Affordable Modification Program (HAMP) that will provide financial aid for unemployed homeowners with emphasis on writing down the principal of troubled loans.

With the jobless rate still near 10%, more homeowners are falling behind on payments and risk falling into deliquency. The new measures would help by giving unemployed homeowners three months of forbearance, giving them much-needed breathing room. Reducing the principal of the loan, rather than simply reducing the mortgage interest rate, will also be considered.

Keeping people in their homes, and holding down foreclosures, is key to helping the housing market recover.

Read more at CNBC....