Marc's Mortgage Matter's

A woman, upon arrival in heaven, asked "God, why did you create man before woman?"
God answered "to every good design, there's a rough draft".

Stellar credit and steady income will go a long way in helping borrowers secure a home mortgage, but they may not be enough when it comes to buying or refinancing in certain condominium buildings.

Stricter guidelines that govern which buildings are approved for conventional mortgages — rolled out by three government agencies in stages since December 2008 — are locking out thousands of buildings nationwide. States like Florida and Arizona are especially hard hit; mortgage brokers say that some buildings in the New York area have also been affected.

The guidelines and approvals come from Fannie Mae, the buyer of home mortgages; Freddie Mac, its smaller competitor; and the Federal Housing Administration, which insures loans. The rules were meant to help strengthen their balance sheets as they faced a surge of loan defaults in the condo market.

“If a condo project is not approved, it makes it very difficult to get financing for a first-time purchase or refinancing,” said David Adamo, the chief executive of the Luxury Mortgage Corporation in Stamford, Conn.

The National Association of Realtors estimates that 23,000 condominium projects nationwide are on the verge of losing their F.H.A. approval by spring. Some 2,200 buildings with older approvals lost their status in December. Last month, though, the F.H.A. granted extensions.

Lists of approved buildings are available online at Fannie Mae and the F.H.A.Fannie Mae’s guidelines typically preclude it from buying a new-purchase condo loan from a lender if more than 15 percent of the owners in the condo development are 30 days or more late on monthly maintenance fees. (The provision doesn’t apply to an owner seeking to refinance a Fannie Mae loan.)

Other hurdles: Condo associations are required to set aside 10 percent of their budgets for maintenance and “reserves”; and new developments are ineligible for Fannie-backed financing unless 70 percent of their units have sold or are under contract (the threshold used to be 51 percent). Freddie Mac adopted similar guidelines last year.

There are exceptions. “We do entertain waivers on our condo criteria, depending on the nature and circumstance,” said Janis Smith, a Fannie Mae spokeswoman, “when the lender makes a rational, fact-based request for the exception.” Last year, Fannie approved 93 percent of the 1,700 condo buildings in New York that applied for waivers.

The F.H.A., meanwhile, requires that at least 50 percent of a building’s units belong to owners who occupy their units, and that no more than 10 percent be owned by a single investor. The agency requires that a homeowners’ association set aside 10 percent of its budget for maintenance and capital expenditures. If the budget does not meet those requirements, the lender can request a reserves study to gauge the building’s financial stability.

New buildings are ineligible for F.H.A. financing unless 30 percent of their units have sold.

“The biggest problem we’re running into now is that a lot of condos are not meeting the minimum reserve requirements,” said John Manning, a mortgage broker in Brooklyn. In addition, he said, homeowners unable to sell their condos have been subletting them, particularly in Battery Park City, a move that could lower the owner-occupied ratio below the agency minimum. “We have a lot of buildings that are teetering on the brink” of eligibility, he said.

Steven Campbell, a loan officer at the Mortgage Assistance Company in Plainville, Conn., says that condo owners thinking of refinancing should ask their homeowners’ association for copies of the budget and its financial questionnaire, a detailed form consumers submit to lenders for a loan or refinancing.

If a building is not yet approved, owners can hire a real estate lawyer or broker to submit the required paperwork, said Graham Lefloch, a broker at WC Financial in Stamford, Conn.

It's the weekend, so why not throw in something unrelated to mortgages? Anyone in a really cold climate and even those not, will find this pretty neat: BoilingWaterInstantSnow

Mortgage rates took back last week's little decline, as what seems to be a lack of a clear direction for the economy has helps them to find a plateau. Unlike the last quarter of last year, when economic improvement was trending higher, it may just be that we've gotten to a "wait and see what develops" kind of state.

As we move away from distortions in the market created by on-again, off-again tax incentives, we should be able to again discern true demand levels for housing. With low interest rates still in place and affordability at very high levels, existing home sales managed to jump to an annualized rate of 5.28 million in December, the highest such figure in more than six months. The kick higher in sales came even as interest rates were firmer than many periods earlier in the year, and also drained some inventory out of the market, drawing it down to 8.1 months of available homes at the present sales pace. More inventory is slated to hit the market in 2011 as foreclosures continue unabated. Still, that there is growing demand for homes as the economy has shown signs of life does portend well for the market in 2011, and increasing employment opportunities during the year may even forestall or even cancel some expected foreclosures.

The upward tick for rates may persist into next week. A slew of fresh economic data is due, including the first look at 4th quarter 2010 GDP. The Federal Reserve holds a two-day meeting to chew over the level of growth, inflation and the efficacy of the on-going QE2 program, and we'll see reports covering durable goods, new home sales and a final January look at Consumer Sentiment. We'll figure on a few basis point rise in rates at most, barring any surprises from the Fed.

Dear Tech Support,

Last year I upgraded from Boyfriend 5.0 to Husband 1.0 and noticed a distinct slowdown in overall system performance, particularly in the flower and jewelry applications, which operated flawlessly under Boyfriend 5.0. In addition, Husband 1.0 uninstalled many other valuable programs, such as Romance 9.5 and Personal Attention 6.5, and then installed undesirable programs such as NBA 5.0, NFL 3.0 and Golf Clubs 4.1. Conversation 8.0 no longer runs, and Housecleaning 2.6 simply crashes the system. Please note that I have tried running Nagging 5.3 to fix these problems, but to no avail.

What can I do?

Signed, Desperate.



DEAR DESPERATE,

First, keep in mind, Boyfriend 5.0 is an Entertainment Package, while Husband 1.0 is an operating system.

Please enter command: ithoughtyoulovedme.html, try to download Tears 6.2, and do not forget to install the Guilt 3.0 update. If those applications work as designed, Husband 1.0 should then automatically run the applications Jewelry 2.0 and Flowers 3.5..

However, remember, overuse of the above application can cause Husband 1.0 to default to Grumpy Silence 2.5, Happy Hour 7.0, or Beer 6.1.Please note that Beer 6. 1 is a very bad program that will download the Farting and Snoring Loudly Beta..

Whatever you do, DO NOT under any circumstances install Mother-In-Law 1.0 (it runs a virus in the background that will eventually seize control of all your system resources.)

In addition, please do not attempt to reinstall the Boyfriend 5..0-program. This is an unsupported application and will crash Husband 1.0.

In summary, Husband 1.0 is a great program, but it does have limited memory and cannot learn new applications quickly. You might consider buying additional software to improve memory and performance. We recommend Cooking 3.0 and Hot Lingerie 7.7.