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home buying

Real estate Q&A: Why Won’t My HOA Board Listen to Me?

Question: I live in a beautiful community that is well maintained by the board and its various committees. All is great, except for the roads – they are ugly with oil marks and patched areas. I have asked after this, but it does not seem to be a priority of the board of directors. How do I get the board to address this issue? – Philip

Answer: Most people who want to get their board's attention try to bring up a new issue at the public board meeting. This is not a good idea and will most likely not work.

A board meeting is a business meeting and should be run from an agenda of items known to all in advance so that the members and directors have ample time to research and consider the issues to be dealt with during that meeting. The common tactic of trying to embarrass or ambush the board at the meeting almost always backfires. Simply, the board meeting is not the time to introduce a new issue.

The better method is to send your board a letter outlining your concern. Try to be detailed and propose solutions. Explain why you think it is an essential use of the community's resources, bearing in mind that other residents may have differing priorities. Send the letter by certified mail to ensure it gets the attention it deserves.

If it still does not make the agenda, try again, or even better, get some neighbors to write in, too. Many voices will hold more sway than just one.

Finally, if, after all of these efforts, the existing board does not share your priorities for the community, you should consider running for the board at the next election. When you are a board member, you are able to help set the agenda and get your ideas pushed through. At least, that is, if enough of your neighbors agree with you.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.

source: Sun Sentinel

Is The Zero-Down Mortgage Loan Making A Comeback?

Buyers may soon be able to bring less to closing. They were blamed for precipitating the housing crisis years ago, but major lenders are giving no- and low-downpayment loans another shot.

Several major lenders are reportedly offering loans with just 1 percent down. Navy Federal, the nation's largest credit union, offers its members zero-down mortgages in amounts up to $1 million. NASA Federal Credit Union markets zero-down mortgages as well.

Quicken Loans, the third highest volume lender, offers 1 percent downpayment options, as does United Wholesale Mortgage. And the Department of Veterans Affairs has offered zero-down loans to eligible borrowers for many years.

Also, Movement Mortgage, a large national lender, has introduced a financing option that provides eligible first-time buyers with a non-repayable grant of up to 3 percent. As such, applicants can qualify for a 97 percent loan-to-value ratio conventional mortgage, which is basically zero from the buyers and 3 percent from Movement. For example, on a $300,000 home purchase, a borrower could invest zero personal funds with Movement providing $9,000 down. The loan also allows sellers to contribute toward the buyer's closing costs.

So far, the delinquency rates on these low- to zero-down payment loans have been minimal, according to lenders. Quicken Loans says its 1 percent down loans have a delinquency rate of less than one-quarter of 1 percent. United Wholesale Mortgages told The Washington Post that it has had zero delinquencies from the borrowers on its 1-percent down loan since debuting it last summer.

For Movement's new loan product, the lender will originate the loans and then sell them to Fannie Mae, which remains under federal conservatorship. Fannie officials released the following a statement:

"(We're) committed to working with our customers to increase affordable, sustainable lending to creditworthy borrowers. We continue to work with a number of lenders to launch (test programs) that require 97 percent loan-to-value ratios for all loans we acquire." They add that there "is no commitment beyond the pilots," which are "focused on reaching more low- to-moderate income borrowers through responsible yet creative solutions."

During the housing crisis, zero-down loans were among the biggest losses for lenders, investors and borrowers. However, housing experts say the latest versions are different from years ago. Applicants must now demonstrate an ability to repay what's owed. They also must have stellar credit histories and scores, and lenders require a lot more documentation to prove borrowers are in good standing.

Also, many of the programs are charging higher interest rates. For example, Movement's rate for its zero-down payment option in mid-June was 4.5 percent to 4.625 percent, compared with 4 percent for its standard fixed-rate mortgages.

Some critics say that the borrowers who really could benefit from such options aren't able to qualify for them. Paul Skeens, president of Colonial Mortgage Corp. in Waldorf, Md., told The Washington Post that "it seems like people without excellent credit scores and three months of [bank] reserves don't qualify."

Source: "No Down Payment? No Problem, Say Lenders Eager to Finance Home Purchases," The Washington Post (June 14, 2017)

If you have any additional questions or queries contact us at (954).944.2799 or emailinfo@DSALegalGroup.com

 

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact an attorney.

never buy or sell real estate without a lawyer

However, real estate transactions often represent the most expensive transaction that a person makes. Spending the extra funds to ensure that the job is done right is often a prudent choice. Real estate lawyers help in the following ways when you are purchasing or selling a home: 

Contract Drafting and Review

Real estate lawyers memorialize the terms of the agreement into a formal contract. They can ensure that certain provisions are contained in the contract that protect their client’s interests as well as to make sure that state laws are complied with. They can also address certain issues that may arise, such as purchasing a lease-back by the seller, handling existing tenants, using the property for certain uses in the future and include contingencies to protect the client. 

Many documents will manifest during the course of a purchase and sale of a home. Lawyers will carefully review all of these documents and not simply take the lender’s word for what the document is stating. If there is any troubling wording or legal issue that arises, he or she can address these concerns. 

Many home sales are based on a number of important contingencies. A seller may want to secure a new home and make the sale contingent on this ability, or the buyer may want to make the sale of his or her own home contingent on the transaction. There may be other contingencies as well that can be included in the purchase agreement.

Drafting Amendments

There may be changes made in the original agreement based on new information. It may have taken longer than expected for certain stages of the process to be completed. There may be changes based on the home inspection and agreements reached regarding any defects. A natural disaster may strike, causing damage to the property. Real estate lawyers can draft such amendments to keep the purchase agreement intact but to account for this new information. 

Reviewing Liens

A real estate lawyer often conducts a title search on a property to determine if there are any encumbrances against it or anything that is clouding the title. This search helps clarify whether the seller has the legal right to sell the property and whether there is anything that may block the sale. For example, the seller may be required to pay off a lien or judgment before selling the home. A real estate lawyer can also secure proof that the judgment or lien has been satisfied. 

Transferring Property

A real estate lawyer helps to draft deeds to effectuate the transfer of real estate. Additionally, he or she can review any contracts related to the real estate transaction that have to do with a corporation, partnership or trust so that no terms of the charter agreement are breached. Without the proper legal protocol, the opposing party may be sued if the agreement is violated.

Fulfilling Additional Legal Requirements

The purchase of certain properties may require additional steps. For example, there may be special requirements if a home is considered historical property. If a property is on wetlands and building permits are not secured, the entire structure may need to be rebuilt. If the property is ultimately going to be used for a commercial use, certain zoning restrictions may apply. 

Disclosures

State laws dictate what types of information must be disclosed about a property. Real estate lawyers can help request these disclosures as well as prepare the disclosures if they are representing the seller. Without a real estate lawyer, the likelihood of being sued regarding a disclosure increases. A real estate lawyer can also be sure to put a home inspection clause in the buyer’s documents so that any unknown defects are realized before the transaction concludes. 

Recording

Property law is full of cases involving properties that were purchased but no deed was ever recorded, creating legal nightmares for buyers. A real estate lawyer can ensure that the deed is properly filed and recorded. If a deed is not properly recorded, the buyer may not be considered the legal owner. His or her income and estate taxes may be levied. 

Legal Assistance

To best protect their interests, many home buyers and sellers choose to retain the services of a competent real estate lawyer. He or she focuses on protecting the client’s interests and ensuring that all applicable rules are adhered to in order to avoid potential problems that could arise in the future.

 

How to Get Your Down Payment and Closing Costs Paid For You

Buyers can finance their Down Payment and Closing Costs with Community Second Mortgages - Community second mortgages allow eligible homebuyers to finance their down payments, closing costs and even home improvements.

This type of assistance may be offered by states, counties, local housing agencies, nonprofit organizations or Employer Assisted Mortgage (EAM) programs.

Subject to qualification, Fannie Mae and Freddie Mac allow buyers to finance over 100 percent of your home's purchase price.  They do this by combining the first mortgages with a second mortgage (this loan arrangement will work with HomeReady and Home Possible programs).

The Fannie Mae program is called Community Seconds, and the Freddie Mac option is called Affordable Seconds.

Down Payment Assistance and Closing Costs

Community second mortgages allow eligible homebuyers to buy houses with no out-of-pocket down payment or closing costs.

Repayment may be structured in several ways:

  • they may make monthly fixed monthly payments until the loan is repaid.
  • they may be allowed to defer (put off) repayment for some period. Then, you make fixed monthly payments until the loan is repaid.
  • they may not have to make payments at all. The loan is only repaid if you sell the property.
  • they may not have to repay the loan if you remain in your home for a specified number of years.

If repayment is deferred for five years or more, the second mortgage payment is not counted when the lender calculates the debt-to-income ratio (DTI).

Who Is Eligible For Community Second Mortgages?

Community second mortgages are offered by many sources.

According to the OCC (United States Office of the Comptroller of the Currency), most EAM programs have some income-eligibility requirements. With regard to income, generally, no more than 120 percent of the Area Median Income (AMI).  As it concerns credit scores, no lower than a 640.  Further, buyers must qualify in the usual manner as it relates to job stability, income sources etc.

The assistance may be limited to first-time buyers, and require some form of homebuyer education or counseling.

Every loan has its own requirements, so once the down payment and closing cost programs have been located in the buyers’ area, attention must be paid to the specific guidelines.

Finding Your Program

These second mortgage programs requirements can vary from county to county of state to state.

An online search for "community second mortgage by city, county or state will bring up programs offered by local housing departments.

HUD’s State pages may also have some resources.  Select State, then "Homeownership Assistance," and a list of links and contact information for many programs will be generated.

Mortgage rates for home loans with Community Seconds or Affordable Seconds are still very low. Combining the two mortgages can get a buyer into a home they can afford with little or nothing out-of-pocket.  These programs take time, so preparation and an early start is the key.  ** Funds are subject to availability.

This year, let’s be creative and continue to help our buyers get the best of what’s available to them.