San Diego Condos In Litigation - Mortgage Lenders Say No!
San Diego Lenders are playing rough on San Diego Condo buyers, the leading two factors by which a loan provider may decline to finance a condominium are litigation and minimal owner occupancy levels ( Below 50%). This applies to conventional loans and the popular FHA mortgages.
Condo Litigation usually means the HOA (Home Owners Association) of the building or condo complex has filed a “Defect Lawsuit”. The lawsuit is generally brought against the developer usually within the first 10 year span of construction.
This litigation could pertain to defects in particular units, phases of the development and/or the common areas. It is during the time spam of the litigation process that Lenders will refuse to lend on the property.
Prices in the San Diego Condominium complex or building generally fall due to the lack of qualified buyers (Cash Buyers) and lender financing. It is not unusual to see Investors paying cash come in and buy up litigated property at a discount.
Most if not all Lenders require a document referred to as the Condo Certificate, a document that states data concerning the standing with the condominium building. This is the document the lenders will take a look at to establish the present status of any litigation, home-owner occupancy along with other problems that may possibly cause concern towards the Loan company.
Depending on the sort of litigation and issues of your project involved, buying in a litigated complex can lead to a extremely significant low cost on market value. You can find a few ways of purchasing condos in litigation like paying out all-cash money, or spending a big down payment or perhaps paying a greater interest rate.
Operating with an experience Realtor will keep you on track with information and updates on which property is in litigation and which features a reduced owner occupancy rating saving you a lot of time and work within your buying process.