Huh? I am in the middle of refinancing our co-op into a 30 year fixed with Citi, i saw someone post here last week about super low rates with BOA (about 0.2 lower than what citi approved with us) so thought i'd see how quickly BOA could get us approved. Seeing we had all the docs in place and approved for Citi didn't think it was going to be that much effort but now BOA have come back saying they... [more]
Huh?
I am in the middle of refinancing our co-op into a 30 year fixed with Citi, i saw someone post here last week about super low rates with BOA (about 0.2 lower than what citi approved with us) so thought i'd see how quickly BOA could get us approved.
Seeing we had all the docs in place and approved for Citi didn't think it was going to be that much effort but now BOA have come back saying they are going to turn us down unless we provide a written agreement for the extension of our co-ops proprietary lease which is going to expire in December ......2034?????
wtf?
Are these BOA guys and girls smoking crack?
Would it even be possible as a co-op to extend a proprietary lease that isn't due for rolling over for another 24 years??
just to be clear this is not an underlying building mortgage, it's just for one of the apartments in the co-op?
What gives?
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Response by ab_11218
about 15 years ago
Posts: 2017
Member since: May 2009
i had the same issue when i was buying my coop and was getting a loan with Citi. they just did that part of the paperwork at the end instead of the beginning.
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Response by truthskr10
about 15 years ago
Posts: 4088
Member since: Jul 2009
If your looking to borrow money for 30 years for something that may only have a 24 year life, Id say they're smoking nothing.
Now why Citi may not come up with that is they will restructure your current loan that started 6 or more years ago.
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Response by deanc
about 15 years ago
Posts: 407
Member since: Jun 2006
@Truthskr10 - nope it was an interest only loan 2 years ago.
- so can anyone with some direct knowledge explain what is involved in extending a co-op? is this costly? does it involve resigning a new prop lease? bet you the city has their hand in your pocket for somehting involved in this process.
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Response by truthskr10
about 15 years ago
Posts: 4088
Member since: Jul 2009
deanc
I just told you, because your " in the middle of refinancing our co-op into a 30 year fixed with Citi" for something you the bank views as having control over only 24 more years.
What ab_11218 is saying is Citi will come around to the same problem with you.
Easy Solution = a 20 year fixed rate mortgage instead
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Response by Miette
about 15 years ago
Posts: 316
Member since: Jan 2009
I'm no expert in this stuff, but based on past experience the coop can extend the proprietary leases at any time -- it just requires a shareholder vote. The way I've seen it done is by extending all leases at once; not sure if it is ever done piecemeal. If the current termination date is a problem for you it will be a problem for other potential buyers (and sellers) so your board may have its own incentives to get this done. But the lease term is definitely fixable -- extending it is basically just a formality. (Not like a land lease where there's an actual third party to deal with.)
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Response by deanc
about 15 years ago
Posts: 407
Member since: Jun 2006
@Truthskr, considering Citi approved us without the 4 pieces of additional information BOA "insisted" were necessary, i doubt it.
Like i said i'll wait until BOA come back with a confirmed rate before i bother, they talked big initially but everytime i talk to them this week they seem to be inferring rates are going up fast - i thought QE2 was supposed to drive rates down?
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Response by rb345
about 15 years ago
Posts: 1273
Member since: Jun 2009
The banks' objections are standard. Extension by Coops once their leases approach the 30 year
mark is also standard behavior.
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Response by apt23
about 15 years ago
Posts: 2041
Member since: Jul 2009
Miette is correct. Speak to your board. the shareholders can vote to extend the lease and it will benefit all who might want to refi as you intend to do
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Response by front_porch
about 15 years ago
Posts: 5316
Member since: Mar 2008
At this point, every big bank is going to want to follow Fannie/Freddie guidelines, so they should all be working out of the same playbook. Citi may have recently done a deal in your building, so they knew that they would approve it, but I agree with other posters that you would have found that this proprietary lease issue popped up before your refi closed.
It's not about what Bank A wants, or what Bank B wants, it's about what Fannie wants.
ali r.
DG Neary Realty
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Response by rentingbrooklyn
about 15 years ago
Posts: 13
Member since: Mar 2009
Most of the banks will take a standard letter from mgmt on behalf of the board saying the coop plans to extend the lease.
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i had the same issue when i was buying my coop and was getting a loan with Citi. they just did that part of the paperwork at the end instead of the beginning.
If your looking to borrow money for 30 years for something that may only have a 24 year life, Id say they're smoking nothing.
Now why Citi may not come up with that is they will restructure your current loan that started 6 or more years ago.
@Truthskr10 - nope it was an interest only loan 2 years ago.
- so can anyone with some direct knowledge explain what is involved in extending a co-op? is this costly? does it involve resigning a new prop lease? bet you the city has their hand in your pocket for somehting involved in this process.
deanc
I just told you, because your " in the middle of refinancing our co-op into a 30 year fixed with Citi" for something you the bank views as having control over only 24 more years.
What ab_11218 is saying is Citi will come around to the same problem with you.
Easy Solution = a 20 year fixed rate mortgage instead
I'm no expert in this stuff, but based on past experience the coop can extend the proprietary leases at any time -- it just requires a shareholder vote. The way I've seen it done is by extending all leases at once; not sure if it is ever done piecemeal. If the current termination date is a problem for you it will be a problem for other potential buyers (and sellers) so your board may have its own incentives to get this done. But the lease term is definitely fixable -- extending it is basically just a formality. (Not like a land lease where there's an actual third party to deal with.)
@Truthskr, considering Citi approved us without the 4 pieces of additional information BOA "insisted" were necessary, i doubt it.
Like i said i'll wait until BOA come back with a confirmed rate before i bother, they talked big initially but everytime i talk to them this week they seem to be inferring rates are going up fast - i thought QE2 was supposed to drive rates down?
The banks' objections are standard. Extension by Coops once their leases approach the 30 year
mark is also standard behavior.
Miette is correct. Speak to your board. the shareholders can vote to extend the lease and it will benefit all who might want to refi as you intend to do
At this point, every big bank is going to want to follow Fannie/Freddie guidelines, so they should all be working out of the same playbook. Citi may have recently done a deal in your building, so they knew that they would approve it, but I agree with other posters that you would have found that this proprietary lease issue popped up before your refi closed.
It's not about what Bank A wants, or what Bank B wants, it's about what Fannie wants.
ali r.
DG Neary Realty
Most of the banks will take a standard letter from mgmt on behalf of the board saying the coop plans to extend the lease.