Which Bank...

how much is the loan amount for? what rate and what program is chase quoting you?

the loan is for 500K and because I can't lock in just yet, I dont know what they are quoting me... how should I compare?

Also, the board requires that I have about 60K of add'l cash in bank after downpay. My parents will be giving me a cash gift. But when I apply for the mortgage, that cash gift probably won't be there yet. Does the bank have such a requirement for cash?

The down pay is roughly 172K and after downpay, I will have about 21K left in stocks/bonds as liquid assets. Do you think the bank will deny the loan simply because I am not high on cash?

THANKS!

Having 21K in liquid assets will satisfy Chase. As to who will give you the best rate and how quick you will close all depends on one factor..... The person who you'll be dealing with at the bank. There are good ones and then there are others. You can get everything done in 60 days or 160 days.

I just had a person who was recommended to Wells Farge and the first 1/2 was great.... Then the secretary of the banker left.... It ended up to be a nightmare. The second 1/2 took 3X the time it should have.

thanks ab_11218 that makes me feel better because i thought they will see the 21K in stocks/bonds as more risky.

i see now... it all depends on luck. so when the loan contingency in my contract says that i have 30 days, it really means to get the committment letter, right?

do you think 30 days is enough for that? they dont really care abotu locking in the rate, right? I just don't want to lose my initial deposit which is 70k!

thanks so much. needless to say i am really stressed and confused.

NYC Downtons, why can't they at least quote you a rate? and why won't they let you lock? you should definetly be able to lock, even if not on banks approval, they should be able to lock and the bank will work out the details.......Secondly are you looking for an arm or fixed product? depending on the product you are looking for, the big nationals may not be best priced now......

nycdowntown, may I ask what the name and address of the coop is? Just bc its already approved with chase doesnt mean itll be faster. The coop approval process and getting you as the borrower underwritten happens simultaneously so there is no time lost. Also, chase and bank of america pretty much share the list of approved coops. The one thing that differentiates bank of america with chase and wells fargo is our local procssing and underwriting. This almost ensures us being able to get commitments within the contingency period. The other major banks process their loans hundreds of miles away and never get to talk to their underwriters. I talk to my underwriter on a daily basis. As far as rates go, I think we're all around the same ball park. I think it'll depend on the specific loan officer you talk to. You can get 2 different rates from 2 different loan officers at the same bank. sunny.hong@bankofamerica.com

Thanks a lot. Yeah many banks share the same approval list. But Chase was the only bank that told me the building is already approved as someone just closed on it a few months ago. BOA told me that it is on the approved list but expiration date was June 1, 2009, which means they will need to re-apply.

So you don't think that should really delay things, right? I did like the guy from BOA better than the one at Chase because the BOA guy was always available to talk and the Chase guy seemed really busy.

PS I will get a 30 year fixed, I believe.

SUnny - you said that "The coop approval process and getting you as the borrower underwritten happens simultaneously so there is no time lost"

but the broker told me the other day that everything depends on the bank since if the bank isn't ready then the coop won't even review the package. By "ready" do you know what the broker meant?

NYC- the bank and bank attorney have to prepare the recognition letters (bank attorney prepares, but won't prepare until bank issues commitment. Are you sure that the co-op you are looking at is going to take time to be approved? As long as the owners are up to date on the maintenance fees, financials are in order, it should breeze by underwriting in days (maybe a week tops).

Not to put down BOA, but BOA has serious issues and their pricing is far from stellar.

As long as the coop is over 70% sold and has good financials, it does not matter that the bank will have to reapprove the coop again. I would guess that your attorney will do due diligence to ensure that the coop is in good standing in terms of financials, so you will be ok with the banks. I've seen banks give loans on buildings that, after reviewing the financials myself, I pulled out the deal. No reserves, huge assessments, chronic maintenance increases, money disappearing, etc.....

As for 30 days, that is a negotiation point. I would say that in the current market, this is a very tight deadline. Your attorney should propose 60 days and do not settle for less than 45.... I am a seller and had 30 days on my contract, the buyer wanted 60 and we settled on 45.

AB- I completely agree on the time line, but really depends on the co-op and how flexible they are, some co-ops's schedule a sepcial board for a quick process, others are strict and only allow one meeting a month, with all paperwork in by a certain date or review will be the following month, in which case 60 days may not be enough.

I was talking about 60 days for commitment letter, AZTEC forms, not closing. I would never have a clause in the contract that has less than 90 days to close on a coop and this is a very tight deadline.

thansk so much AB. that is super helpful and it is an issue which i will bring up to the lawyer on Monday. the attorney is charging me 1600 bucks for all this and I expect him to make the necessary changes.

In the contract, I read very carefully and came across a note that said that the expected closing date will be on or around 11/1 and we have 30 days to do that. So even if I start the process tomorrow, we have about 90 days to CLOSE.

So in your opinion, in addition to asking for a 60 day bank commitment, what should be the closing deadline? 2/1/2010?

Thanks again!!

AB - the building doesn't really have huge reserves. It has had assessments which averages 100 a month for the past two years and the lawyer told me it was all really for maintenance for local law 11 and replacing boilers, etc. their maintenance increases average 2-5% annually... should I trust the lawyer? This is an upper east side building. two bedroom and the stated maintenace is $1215. the total maintenance including assessments for the past 18 months has been roughly 1300 a month. total sqft on the apt is around 900-1000.

nycdowntown - yes, it is true that it depends on the bank for the coop to setup the interview and the bank has to give you the commitment letter and send out the recognition agreements. But like I said, there should be no problem with commitments going out in 30 days.

As far as the approval expriation, we dont have to "re-apply." This just means that the documents need to be updated such as the mgmt providing us an updated questionnaire, insurance, and 2008 financials. Once received the project can be updated in less than 48 hours since I know the head of coop approval. If you email me the name and address of the coop then I can start updating the documents.

I have a very good relationship with my coop and condo department. dledven, I think it depends on who youre dealing with at BofA that makes us stellar or sub-par. And like I said, pricing will vary from loan officer to loan officer. Top producing loan officers have an advantage with underwriting time flow and pricing.

It seems that the coop have very low maintenance, hence the low reserves and assessments. Some buildings like having reserves and raise maintenance for the work on Local Law 11, like mine did, some do not and do an assessment.

From what you are saying, there does not seem to be any red flags. You can also do a search on ACRIS and see if there was substantial turnover in the building. This may be a red flag, but does not have to be. Also inquire about a flip tax, that bites hard.

If you sign the contract on Sept 1st, you'll have a fully executed contract on Sept 8 or there about. Your time will start ticking then. Taking a 45 day to commitment letter will bring you to October 23rd. You will then have to provide the board package to the management within a week, October 30th. The management takes approx 2 weeks for review, some are better some are worse, you're now at Nov 13th. Now you are ready to meet the board..... That can be within 1 week or withing 1 month, ballpark time is Dec 2nd let's just say. Official approval notice is a few more days, Dec 7th. FINALLY, you're there in another 3-5 weeks, Jsn 13th.

All of these timeframes can vary. If everything runs reallllly smooth, you can close by end of Nov, but the chances of that happening are slim. December would be more realistic.

Make sure that you do not put specific dates for closing but "days from". If you sign the contract and the seller is on vacation for 2 weeks, you end up losing 2 weeks time. You cannot do anything with the bank, get the board package to start gathering info or anything else.

nycdowntown - just be aware that it would seem that the maintenance is being kept artificially low. Having continual assessments is simply as way of getting around raising the maintenance to the levels required to maintain the building properly and have some sort of reserve for major problems that may occur (roof / elevator replacement,etc.) Those might require much more substantial assessments. Has your lawyer looked at the board minutes for the last year to see what else is going on in the building?

thank you all so much. you have been such great help. tomorrow i will meet w/ the lawyer.

right now, it says that the expected closing will occur ON or ABOUT 11/1, and somethign to the extent that we have 30 business days to defer the close due to things such as board approval.

ph41 - the lawyer told me that he just reviewed the board minutes and that there are no red flags. he said that they just had to assess to meet local law 11 and that they just did major repair work which occurs every 5 years. so he thinks that it's good we are going in at a good time. however, how do i know he's telling the truth? what are some other things i should inquire about with regards to the board minutes?
thanks!!

If he's reviewed the minutes, and the building financials, there should be no reason he wouldn't be telling you the truth. He is also just saying that as of now, there are no expected major repairs - which is good news, as the building seems to have to rely on assessments to cover repairs for which other buildings have reserve funds.

ph41 was on the money in stating about the repair work. you have to remember that if anything will need to be done in the building that is not regular maintenance, there will be assessments. i know some buildings that have had heat assessments for the past 4-5 years. even now, that the price of oil has gone down, they will still have them. there has been increases in taxes, management company fees and staff salaries, so they are using the heat assessments to compensate for those.

you are getting into a building with maintenance that seems to be 70% of the typical maintenance for a similar unit. you will have to bridge the gap whenever something goes wrong. if the building had most of the work done, you're good, but you'll never know.

as to the contract having the specific date, i would not sign, but that's me. i've seen a "soft date" put into contracts that got adjusted based on the signing. i would have your attorney put in a rider that if the fully executed contract does not come in by X date, every day after that will be added to the initial date.

the 30 days in the contract are typically calendar and not business, just keep that in mind.

NYC- you can also find out how much longer the assessment payments will continue. Also if you look over the minutes you can see if there are any other planned expenditures. You can also contact the property management company and talk to the property manager he will fill you in on the building and what is happening (make sure it is a reputable mgmt. company.)

I would not think that the property manager would ever tell you about something that is not on the books. The boards talk about a lot of things, but what they will do and when is a whole different story.

As for management company and reputable cannot be used in the same sentence. I've dealt with at least 15 so far and incompetent, useless, problematic and pathetic were better terms used. As long as they are not totally worthless and lazy to the nth degree, they are fine.

I had a management company hold up the closings that took minimum of 5 months and max 8 with attorneys, sellers, buyers and realtors calling every few days. They were just too busy playing soccer in the office to bother looking at a few sheets of paper for a few months. That was Jalen management. If you hear Cooper Square, run. They are taking every building for hundreds of thousands by lining the board members' pockets.

what about bellmarc and akam?

i have to find out which one manages my building.

also i just can't seem to get over this... if the there is only 45 days to the loan commitment then how is that still a fair contingency clause? the bank can theoretically intentionally slow things down (for whatever reason in this hypothetical scenario) and as a result i can still lose all of my 10% deposit.

when I talk to the lawyer tomorrow how do i ensure that as long as it's not my fault, the 10% deposit will be returned to me?

thanks!!!

akam is a hit or miss. if the seller or one of the attorneys knows someone inside, you'll be fine. i've had closing with them that took 2 1/2 months and know of a person who took 8. make sure that there is no estate or ownership transfer issues, they will slow things down to a crawl.

as to loosing your 10%... i'm not sure if that's the way it works. speak to your attorney, but i would suspect that since you have a mortage contingency clause, you should not lose any money due to bank delays.... SPEAK TO YOUR ATTORNEY :-).

i had a person on a deal lose their job recently, supposedly. they got their 10% back.

AB - again thank you so much. i really, really appreciate it. meeting w/ the lawyer today around 1.

Yeah - for me the scariest thing is losing my 70K of downpay/deposit simply because the bank screws something up. I will of course try my very best to act quickly to get things done but I definitely don't want to be penalized for something that I have no control over.

Thanks again.