Can't Refi due to Fannie 10% reserves guideline

You can still get your refinance done assuming your loan meets certain characteristics. Give me a call if you want to explore this further. I'm a broker with Universal Mortgage. 212-401-0854

This is a real issue. My building is not compliant. Apparently a lot of condos aren't, b/c the Fannie requirement is dumb and they are hoping it goes away. To get compliant requires a 10% raise in maintenance, not something anyone wants while the economy is so weak. Banks were giving exemptions but I'm told that those have dried up now.

Would also be interested in other people's thoughts.

The requirements are ridiculous. Having a building perpetually add 10% to the reserves makes no sense, unless their is something big to fund. Try another bank. This is an over-reaction to the credit crisis. The 10% Fannie requirement is only relevant if they intend to sell the loan to Fannie or Freddie.

One of the dumber FM reqs for sure. If the reserve is really healthy enough I know you can get a waiver. Try another lender

Hmm. Riversider, godfather and godmother of all conservatism, is on the side of asset bubbles and speculation again.

The requirement isn't 10% per year forever. It is 10% of operating expenses, meaning one month's expenses, more or less. Considering current default levels, seems reasonable to me.

Assuming constant budget, 10% per year means a reserve fund equal to the actual budget at the end of a ten year period. so for a building with a five million dollar budget, your requiring an equal reserve fund after ten years and a reserve fund of twice the budget in 20 years. Any reserve fund that doesn't take into account projected building needs and the ability to assess residents is assinine. And many buildings can easily do an assessment equal to one months common charges.

What about inflation? Suppose the reserve fund is at 3 years' budget. If you add 10% of a year's budget to it annually, it grows by 3.3% a year only, just a hair above inflation expectations, effectively leaving it flat.

Now if the reserve fund is only 1 year's worth, then adding 10% a year simply keeps pace if inflation runs at 10%. Maybe the FMs are full of inflationistas just like this board....

Pretty much all lenders sell to FM. Or at least all the big ones, with the best rates. I've been told waivers are not possible on this point anymore (they were a little while ago, since buildings were providing letters stating that they "intend" to comply in the future, but that time is over).

Anyone take a guess at what percentage of NYC buildings are negatively affected? 2%, 10%?

Give me a call. I'm a mortgage broker, have my own firm

Ellen Silverman 212-786-9682.
www.esfunding.instantlender.com

The FNMA reserve requirement isn't necessarily. There is a program called limited review which states that if the building is existing and the HOA has been turned over to the home owners you can get around the reserve requirement, as long as the building is less that 20% commercial and no one entity owns more than 10% of the units. What building are you looking to refi in?

Give us a try. Www.apluscapitalinvestments.com

So, bvllsh!t regulations are pushing people to loan sharks now?

Yeah, as opposed to 21% credit cards.

Regulations like FDIC? Regs like FDA? Regs like abortion rights? Regs like you are only responsible for $500 for fraud?

Ppl Fking smoke in front of their new borns..... Ppp are complete Fking financial foolz.

It's like allowing ppl to buy smokes at a duane reade...... Maybe if they had to get a mortgage at a street corner, it'll make them think twice.

Gcondo, enjoy your new purchase while I laugh it down to $500psf. Tis just the tip of the iceberg, fk the titanic hasn't even grown off it's line at the dock.

lol! try not to type so fast