This is a Blog for all Broadmoor owners to share ideas and concerns. I'm Rick, my wife (Sandy) and I have owned our condo on Moritz for 13 Years. We have never had an issue with the Association Board until Oct 2010.
My Concerns :
1. Broadmoor doesn't have flood insurance (it should be $20,000.00 Ded)
2. Broadmoor doesn't have Earthquake Insurance(Should have same Ded)
3. Why would any one have a high equity position in here with such risk????
4. Two board members have been on for over 13 Years with same management .
5. I'm trying to take out a Reverse Mortgage (I owe our place outright) and take some equity out but these two members and management co. are doing everything they can to slow/stop the process.
6. In order to get Reverse the whole complex has to to approved by FHA-Which it has for the last 20 Plus years- with all the goofy home loans in the past FHA starting Feb 2010- all condos that seek Reverse must have the whole project approved at no cost to the Association.
7. Below recent LA Times Article :
Board president can't block condo owner from applying for financing
Refusal to cooperate in an application could open the president and the association to a possible lawsuit for damages should the owner lose title to the property as a result.
E-mail
Print
Question: I own one of 64 units in my development and the board president refuses to cooperate with my bank in completing my reverse-mortgage paperwork.
She wrote to owners that we are a condominium development, "which means the entire development would have to be approved in order for any individual unit owner to obtain an FHA loan.... We believe that because some people may get in because of the low interest rates (3%), and with little or no down payment required, we could be exposing ourselves to liability if these owners cannot make their mortgage payments and are ultimately foreclosed.
"At this time we believe it's not in the association's best interest to apply for the approval. We realize that this affects people who wish to obtain an FHA loan for either refinancing or obtaining a reverse-mortgage loan. We have to do what's right for the majority of all homeowners."
The bank was willing to absorb the cost of obtaining Federal Housing Administration approval, but it's been more than 30 days since my application. Isn't this discrimination?
Answer: The president's interpretation and reasoning are wrong. She cannot predict who will or will not make mortgage payments or know what's "right" for the association.
Actions such as these deprive all titleholders of their individual property rights and also prevent owners requiring refinancing or reverse mortgages from keeping their property. Those decisions also deprive titleholders from making the best possible estate planning choices. That failure by the board is negligent, subjecting the president and the association to a possible lawsuit for damages should an owner lose title to his or her property but for the approval of a reverse mortgage.
The FHA website states: "As authorized with the passage of the Housing and Economic Recovery Act of 2008 (HERA), the Federal Housing Administration (FHA) implemented an approval process for condominium projects and insurance requirements for mortgages on individual units, under Section 203(b) of the National Housing Act."
It also states, "The program insures a loan for as many as 30 years to purchase a unit in a condominium building — which must contain at least two dwelling units and can be detached or semi-detached, a rowhouse, a walk-up or an elevator structure. The loan is made by a lending institution, such as a mortgage company or bank, and is insured by HUD's Federal Housing Administration."
The FHA Resource Center phone number is (800) 225-5342; e-mail: info@fhaoutreach.com. Find the FHA's frequently asked questions at http://www.fhaoutreach.gov/FHAFAQ/.
No board director has the unilateral authority to control the assets of others, to decide what families can and cannot purchase in a development and what mortgages are acceptable. A proven allegation of discrimination or negligence will subject board directors and the association to damages, and if you miss the loan cutoff, the president and the association may be held liable for paying any fees incurred.
If you believe you have been discriminated against because of race, religion, color, sex, national origin, disability or family status, file a complaint with the U.S. Department of Housing and Urban Development, Housing Discrimination Hotline at (800) 669-9777. Or go online to http://www.hud.gov/offices/fheo/online-complaint.cfm.
Send questions to Box 10490, Marina del Rey, CA 90295 or e-mail noexit@mindspring.com.
Copyright © 2011, Los Angeles Times
RELATED STORIES
Brahma at 6:09 PM March 06, 2011
The authors may be providing legally correct advice here, as advocates for people contemplating suing their HOA board, but in general and certainly morally speaking, they are quite wrong.
The board president has a duty to protect the other owners in the complex from people who really can't afford their units and would be better off selling them instead of refinancing. It goes without saying that <b>someone who simply must have an FHA loan with only 3.5 percent equity is someone who cannot afford the home.</b> People in this situation should sell before they are any more underwater than they are, and should be encouraged to do so at the earliest opportunity, before they miss any HOA dues and/or maintentance payments.
The housing credit bubble popped two years ago and is in the long, draw-out process of deflating. If you're underwater or need money to fund your retirement because you forgot to save or spent all of your money on frivilous living during the credit bubble, as the letter-writer seems to be, then now you're getting your just deserts.
I realize that the authors are attorney's, but in reality the best advice here, financially speaking, would be for the people who wrote the letter to sell their unit and attempt to live, frugally now, on the proceeds. Refinancing with an FHA reverse mortgage is pure folly.
Advertisement
 |
Buying or gauging the market? See homes advertised in the Los Angeles Times print sections. Explore »
| advertisement |
No one but no one has the right to interfere with another persons finances. Broadmoor Huntington Harbor has been open to FHA financing for 30 years. It was called spot approval. The short sales,auctions, and forclosures were not caused by the FHA loans that were granted here. It was caused by stated income loans, and a bad economy.
ReplyDeleteI am one who wants to secure an FHA reverse mortgage. I have an 800 plus FICO and have managed my money well. I want an FHA reverse becuase it makes sense to me. The decision to secure a reverse should be between me, my bank, and FHA (the insurer). It should not be interfered with by a board of directors of an HOA.
This is where the legal issue lies. I think when tested in the courts, esp. with a jury trial, the HOA will lose.
Somthing to think about:
Seagate across the channel has homes in the 1 mil ranage and is FHA approved. I am contemplating buying new condo in Irvine using an FHA reverse and the home is over $800,000.00 My neighbor, if I decide to buy, will be a young doctor with a very high income who is having his home financed with FHA. All the new HOA's in Irvine are FHA approved. These condo complexes run from 500 thousand to close to a million. Why, you may ask, are all the condo complexes being built in Irvine FHA approved? The developers stated that they would not have broken ground unless they got FHA approval. 60%plus of all loans today are FHA insured. They would not be able to sell all their homes without FHA.
RE: Earthquake insurance
ReplyDeleteAfter the Northridge quake in January 1994, the Board spent several years - literally - investigating the options for earthquake insurance. Reputable insurers refused to write any new policies. After several years, the Board was able to obtain bids from some reputable insurers. The costs were so high, that it was put out to a vote, as monthly dues would have increased $120-$300/month to cover the costs. It was voted down overwhelmingly.
Individual homeowners can now purchase earthquake insurance from the California Earthquake Agency. Contact your own homeowner's insurer and they can act as an agent for you. It has high deductibles, but would cover you for catastrophic loss and the assessments needed to rebuild the complex. I pay about $500/year for my policy. For more information:
http://www.earthquakeauthority.com/
RE: flood insurance
ReplyDeleteThe Broadmoor is a "priority risk" area, which means we are NOT at high risk of flooding and nobody is required to purchase flood insurance.
You can purchase an individual flood insurance policy from FEMA, an agency of the Federal government, the only place you can buy flood insurance.
I pay $330/year for my individual flood insurance policy. It will cover me for catastrophes, such as a tsunami. Contact your own homeowners' insurance agent for information on how to purchase this for your own unit.