litigation

I had a similar problem when refinancing a condo. There was a slip and fall law suit against the bldg. plantiff was suing bldg for 25k, it is a 200 unit bldg with a multi million $ insurance policy- so i really didnt see how this was in any way relevant to the loan i was getting... but in order to mitigate this "risk" i could only go to 70% ltv.. i think this is just the new lending envirionment. the banks have to write squeaky clean loans if they want to resell them.

wow---this is new--i bot in a coop that had2 suits in progress for garbage like this; basically from tenants who were in big arrears on mntnce, trying not to pay--didnt come up in mtge process---it was a 50% cash building and i put >50% down, so maybe that was the issue

bot a new condo after that, and it didnt come up either---again woth a big down pmt, but wasnt even aware of an inquiry by wells fargo re suits etc

sold all in 07 and havent purchased since so i may be in for a surprise if/when i buy again

Depending on the bank this could be a problem, BAC would not finance a condo on CPS I was in contract on because of a lawsuit. They dragged it out for months requesting more and more documents. Yes the buildings have insurance, but the bank wanted a written assurance that the lawsuit would not exceed the amount of the insurance coverage. Tread carefully.

Keith, my bank also wanted the bldg attorney to write a similar document and they refused,

Keith,
did the sale fall thru or did you find another bank?
Also, was it a legit, complex lawsuit or a trip/fall/property damage claim?

it was a visitor who slipped in the elevator, i don't know how legit it was or how seriously he was injured, i do know that he was suing for 25k so i can't imagine his injuries were that severe or that the financial implications to a 200 unit complex would be all that significant

Yes, rivas77, to reduce your ltv based on an ordinary slip/fall seems like a petty excuse. But, imo, a 70% ltv seems OK, unless they give a low appraisal. What bank did you use?

private mtg broker in chicago
i didnt really mind putting in more equity, it just seemed bizare as the litigation had no forseeable impact on the risk to the lender

sb1:

1. coop and condo owners have different liability exposute to lawsuits
2. a coop owns the building in which its apartments are located
3. as a result a judgment v. the coop directly affects all unit owners
4. who have to pay it off with their personal funds, directly or indirectly
5. a condominium association does not own the building its units are located in
6. just the common elements of the HOA

7. and about 2-4 years ago the appeals court for manhattan ruled that individual
condominium owners are not legally responsible for and do not have to pay off,
directly or indirectly, a judgment against the HOA

8. your attorney and the HOA's attorney should review that case

rb345 Thanks, but seems like most lenders follow fannie mae guidlines and based on that don't clear mortgages on condos that have litigation pending involving HOA when amount of lawsuit is unkown (excess of some amount) and it is disclaimed by insurances.

http://springsrealestatenetwork.com/2010/12/27/important-fannie-mae-updates-for-2011/

sb1:

1. most lenders are rational people
2. if you can provide them/their lawyers with controlling case law re your non-liability
3. the ones you're dealing with might disregard the lawsuit and its hypothetical risk
4. just as title companies withdraw their exceptions when a concern is adequately addressed

Good Luck