Paul S.  Henderson, REALTOR®, CRS, South Puget Sound Washington Agent/Broker! (Fathom Realty Washington LLC)

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Rainer
354,642
Caroline Gerardo
Licensed in 20 states - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Lender shuold have asked HOA for all documentation around day three. HOA's in most states have a fee - anywhere from $300 to $1000 just to provide the budget, bylaws, condo cert, if there are pending lawsuits... A pending lawsuit would weigh heavy on all the residents. In Calfornia two law firms went to every HOA and management company that was nearing the nine year old mark to sue the builder or city planning or deep pockets to show construction defects or planning oversight. These law firms assured the HOA's they would all reap in piles of cash to make improvements. BUt cough COUGh the law firms did get big settlements tying up owners from being able to get government or conventional loans during the four year legal process. The majority of the money goes to the law firm for fees and incedentals. This devalues the complex, as the sellers during the time period had to discount prices and either take all cash offers or hard money loans. A pending lawsuit even for the common areas can suck all the reserve money out of the HOA and raise the monthly fees for all. Give me the legal name of the complex and I can lookup and tell you why they are asking this. The age of the complex has nothing to do with the request. Perhaps they have low insurance coverage with very high deductable and no reserves? Lots of trip and fall claims? Girl from chandelier fell and broke leg claim (this is true story in a common area) Unpaid pending claims?  Lender was remiss in not doing this upfront. Ask for copy of appraisal and see if appraiser made some notes about the complex. Get a copy of the Master insurance policy and review- is coverage enough to replace what is there and rebuild? 

Apr 10, 2019 10:57 AM
Rainmaker
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Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Yes as far as wanting the insurance information Paul S. Henderson, REALTOR®, CRS and I assume they usually ask the insurance company about the commons area BUT they don't normally tell us what questions they will be asking the insurance company. I assume this is a standard question for them.

Apr 10, 2019 08:55 AM
Rainmaker
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Diana Zaccaro Broker Associate
Tropical Beachside brokered by eXp - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

That is common here but it is usually done earlier in the process. The age of the complex has nothing to do with it, though. I know of one complex where the flood insurance on the garages (common areas) was canceled by the Board and wonder how that will affect units that are for sale. 

Apr 10, 2019 12:22 PM
Rainer
327,687
Libby Cousins
Extraordinary Processing - Spokane, WA
Contract Mortgage Processor, licensed in WA

It is commonly asked for but depends on the characteristics of the loan. When it is asked for this late in the game, it is often because the property was submitted as an SFR instead of a PUD and the underwriter wasn't made aware of the HOA until the appraisal was received. 

Apr 10, 2019 12:08 PM
Rainmaker
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Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Yes, we provide HOA docs and disclosures asap.

Ex. of possible issue: the HOA has an active lawsuit, therefore it is almost impossible to get a loan with less than 40% down. 

Apr 10, 2019 11:17 AM
Rainmaker
5,580,934
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

the condo management company would handle all of that for us..... 

Apr 10, 2019 11:11 AM
Rainmaker
710,199
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

Yes, the HOA's financials do come into question by the lender. Some Associations are a financial or legal mess!

Apr 10, 2019 10:19 AM
Rainmaker
1,431,861
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Banks are interesting with HOAs.  Hopefully they're more responsive than the one I'm dealing with now.

Apr 10, 2019 11:33 AM
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Anna Banana Kruchten CRS, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

Here in AZ the title company is the one to ask for and get all the HOA documentions, HOA stuff, CC&R's etc.  I have not seen a lender asking for insurance policy info on common areas/claims in 34 years.  Perhaps this the start of another trend?

Apr 10, 2019 11:29 AM
Rainmaker
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Absolutely! We just had a lender request that very information on an office condo building.

Apr 10, 2019 09:58 AM
Rainmaker
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John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Lenders want to know that a complex has proper and adequate insurance. I am not knowledgeable about the normalcy of requesting information about past claims. Is the lender looking for a reason to deny the buyer's loan or simply doing their normal due diligence?

Apr 10, 2019 09:44 AM
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Yes, but, this is routinely done very early in the process. I'm surprised they waited until the week prior to Closing to do this!

Apr 10, 2019 08:26 PM
Rainmaker
4,270,336
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Lenders/underwriters can inquire with some requests that seem "odd" or "strange" to us.  Stuff happens.  

Apr 10, 2019 05:00 PM
Rainmaker
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Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

 Probably due to all those lawsuits in California. Lenders are getting gun shy on HOAs across the west now knowing many Californians are moving to other states such as Oregon and Washington and bringing their litigious mind set with them.

Apr 10, 2019 02:48 PM
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This is an underwriter earning their pay...

Apr 10, 2019 12:00 PM
Rainmaker
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Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Wow, that's a tough nut to chew Paul. No, this question has not risen to the top YET!

Apr 10, 2019 09:38 AM
Rainmaker
4,579,620
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Not this close to closing. What are they looking for, something they want to see or something real? Contact a democratic member of Congress! 

Apr 10, 2019 01:09 PM
Rainmaker
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Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I've gotten requests for a master insurance policy (but usually long before closing), but not for insurance claims.

Apr 10, 2019 11:27 AM
Rainmaker
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Roy Kelley
Retired - Gaithersburg, MD

Thanks for sharing this experience.

Apr 10, 2019 09:34 AM
Rainmaker
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Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West - Carlsbad, CA
Presence, Persistence & Perseverance

I hope you have a back-up lender. The primary lender is acting like they don't want this one on their books

Apr 11, 2019 04:21 AM
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Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Gosh... are they wanting a full 40-year history or just current info and pending claims (if any)?

Apr 11, 2019 01:39 AM
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Often, but certainly not just a week before closing.

Apr 10, 2019 08:26 PM
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Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Insurance companies are in the business of collecting premiums, and doing what it takes to not pay out, I would expect that they would be doing their research and calculating their risk.

Apr 10, 2019 06:45 PM
Rainmaker
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Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

yes. painful.

Apr 10, 2019 02:00 PM
Rainmaker
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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Paul,

I hope all goes well for you.  You have some good answers. A

Apr 10, 2019 12:44 PM
Ambassador
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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

All of that is typically dealt with upfront with the underwriting team. 

Apr 11, 2019 07:59 AM
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Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

I'm surprised this request is coming so late in the process. Lenders here usually request this information early on in the process and want to know all sorts of things about the HOA. If there is litigation in place it's tough to get a loan.

Apr 11, 2019 07:55 AM
Rainer
225,515
Bob Betel
Allstar Home Mortgage, Inc. - Sweetwater, TN
President, Allstar Home Mortgage, Inc

Asking for HOA insurance is standard practice on every file. What is not, is asking for it so late in the process. This should have been done after the title and appraisal are finished, and it should have been listed on the initial conditions. Your lender or processor should have known about that.

Also, as a Realtor, you won’t normally be involved with this, unless there was an issue. Just have the bank or the processor call the association to get the name of their master insurance company, then fax the request and you will get it this afternoon (if you are lucky)

 

 

 

 

Apr 11, 2019 05:55 AM
Rainmaker
819,610
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

I believe the closing attorney collects this infomation.

Apr 11, 2019 05:04 AM
Rainmaker
4,347,548
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

We always havea date in our contracts for all HOA docs. and make it almost same date as title.

 

Apr 11, 2019 04:50 PM
Rainmaker
1,045,215
Dave Martin (703) 585-4687
Fairfax Realty - Fairfax, VA
Making Realty Dreams a Reality #WeWillGetYouHome

Request for such disclosures by the lender should have been made much earlier on.. of course I do not know how long from contract to settlement. Perhaps they are only asking for any current claims that have not been resolved? Paul S. Henderson, REALTOR®, CRS I would probably put the loan officer on notice about such late info requests harming the likelyhood of good business 

Apr 11, 2019 08:29 AM