I remember LITHs probems with the lenders, and now I am starting to see just how insane they are. My buyer has a VA loan (if it makes any difference), and today they asked about the road maintenance. Being in a subdivision, it is privately owned and maintained, paid for by the HOA. Well that answer wasn't good enough for them - they want to see receipts that PROVE the HOA has paid for snow removal and other maintenance. The realtors are working with the HOA president and treasurer to get the documentation they need.

Is that crazy or what? I have never heard of such a thing.

Cas, what state are you in again?

Cas, good to hear the deal is still progressing. Do not be surprised if the lender asks to see proof of the financial health of the HOA too!

Private roads have always been an issue.

Someone has to maintain them, including clearing them.

It sounds more like builders trying to cut corners and not have to put in a road that will be accepted by government that then provides maintenance.

In Virginia the state owns all the roads, and except for cities provides maintenance.
You must have a road built to state standards before the state will accept it.
If you keep the road private you do not have to pass meet the state standards, instead you have a lower quality road that WILL end up costing more in the long run.
Guess who has to pay?

can the HOA afford to re-pave the road?

Can they afford annual maintenance (like snow removal)?

NC - ok, ok, what's up with your smartbuttishness? Do you want me get in my car, drive 8 to 10 hours, take another 8 hours to track you down and stalk you, waiting for the perfect opportunity to strike, kick your butt (or you may kick mine), get caught, spend a couple days in jail, get out and spend another 8 to 10 hours driving home again? Do you really want that? Haha! Thanks for the good wishes. I'm sure everthing is still on track.

BRICK - Yes I see your point about whether or not the HOA has the funds for road improvements. There are a couple subdivsions out there where the builders went bankrupt and left behind a real mess. Our subdivision is not like that - it is 100% complete, road is still in excellent condition, will not need repaving for a long time. They did not build a cheap road. Even though its private, the county still has their building requirements. If HOA goes bankrupt, that doesnt mean buyer will forfeit on loan and then they will have a hard time re-selling the house.

I understand the lender wants to cover themselves, but that should have already been taken care of with the appraisal and with the buyer's credit rating. Our appraisal was just fine. The buyer's credit should not be a problem either. They already sold their other house (closed 1 week ago), based on his job description he makes very good money, the only debt they have is 1 car loan. It should be a slam dunk. I don't see why the lender is so worried about something like a road maintenance agreement. Seems very silly to me.

No, appraisals and the buyer's credit rating have nothing to do with the solvency of an HOA and it ability to maintain roads.

The money comes from the homeowners, and if the maintenance is not performed it WILL drag the value of the property down.

Private roads may have better snow removal since the home owners are paying the bill directly, and have a lot more leverage (and costs incurred) since they must contract privately for the removal.

Try calling the state and complaining some time, you are on a map based on traffic that determines the order things get cleaned up.

We had a refinance deal fall apart at the last minute because of lack of a written and recorded road maintenance agreement for our private road. I was able to refinance through another lender by disclosing the issue right up front and providing a letter from the county road commission stating that the county would take over maintenance in an emergency situation, plus much other supporting documentation I was able to research online and in the county courthouse. Being a lawyer does come in handy sometimes.

I think you'll be fine because the HOA should be able to provide these documents fairly easily. I think brickeyee is right that there may be further requests for financials from the HOA, so have patience and it should work out.

Good luck!

At least on of their 'lend to anyone' cheerleaders will be gone soon.
Barney Frank.

An "independant regulator" [sic] to what standards?

F&F have never been completely unregulated, but both they and the regulators have been the victim of congressional meddling.

The existence of banks capable of packaging mortgages into bonds (the secondary Marketa Fannie established) means both F&F mat no longer be needed.
Of course some banks (led by Indy and Countrywide) and followed by BofA and Deutsche Bank managed to screw up.

Don't get the sic. The regulator would be a government entity independant of Congress.

I can't follow your second sentence, but I must say the third is some kind of understatement!

http://www.youtube.com/watch?v=_MGT_cSi7Rs

But during closing, more insanity popped up that I just had to tell you guys about.

1. We had a pool table that was originally listed as a "non-conveyance" - it was to be purchased seperately. Then during negotiations, the pool table was given to the buyers for free. Do you believe that this almost became an issue to the lender? I truly don't understand their reasoning, but it has something to do with you can't leave behind personal property that has a value and make it part of the house sale. Well in this case, it was FREE - so who gives a crap? I also left behind curtains, curtain rods, blinds shower rods and shower curtains - even the storage shed could have been considered personal property. Wow, I'm lucky the lender was ok with all that.

2. This isn't lender related, but this popped up and I was scared it was going to kill the deal. The buyers were very concerned about this, and rightfully so. In our area, if you own multiple houses, you pay one tax on your residence, and you pay higher taxes on any additional non-residences. Yeah, thats really fair. Thats like if you own 2 cars, but can only drive one at a time, you should be charged a higher tax on the 2nd one. Greedy scumsucking government! Anyway - I filled out my personal property taxes correctly, and claimed one as my residence, and stated the other house I was trying to sell. Well it slipped through the cracks, and I paid the lower tax on both houses. Good for me - I finally got a break. The title attorney noticed this and told the buyers if the county notices this error, the buyers could expect to pay the back taxes. How stupid is that - instead of them coming after me, they will come after whoever currently owns the house. The buyers asked if they do notice, can't they demand I pay them, and the attorney said, no - its YOUR bill if that happens and there is no way out of it. Again, good for me. Anyway, just more silliness that could have resulted in not closing. Well, maybe not "silliness", as this was no laughing matter. It was still a bit absurd, and it was a total shock to all of us. Luckily, even at the higher rate, these taxes are not astronomical. The buyers are getting such a good deal, and they are just as tired of jumping through hoops as we are, they allowed it and we finally closed.

3. Then another thing I found "funny". There we all were at the closing table - the sellers, the buyers, both realtors and the title attorney. The attorney was a soft-spoken man who was quietly shuffling papers back and forth between us and the buyers to sign. Just about the whole time the realtors were busy talking to each other, swapping "realtor war stories", and a few times they got so loud they overpowered the attorney, and you had to ask him to repeat himself. My realtor even got out some paperwork, and then said aloud - "oh I am just going over the paperwork of another closing I had earlier today". ?????? It was rude enough you were running your mouth and distracting us, now you are studying paperwork that has absolutely nothing to do with the closing at hand? Sorry, I found that to be very rude and unprofessional.

Well I am glad it is finally over. You guys should also be happy, because now you may hear less from me! Now I can start concentrating on some home improvements I'd like to do and I can get back to having a somewhat normal life. Thanks to everyone who showed support and offered some good advice along the way. And thanks for just letting me vent my frustrations. Hopefully some of my venting actually helped someone else out there, and they can watch out for some of the pitfalls that I experienced.

Good luck to everyone - hope everyone has a very nice holiday season!

It's called investment property, and it depends on who is defining "fair."

Brick - I think you were very aware of my situation. I "got stuck" with the other house, it was never intended to be an "investment property". Thanks for taking the time to read my post, only to copy a sentence, comment on a spelling error, and then make a snide remark about it. And thanks for NOT congratulating me on finally getting my house sold. It goes to show what sort of person you truly are.

At our closing the buyers had an 8-month old baby who screamed the entire hour and half. I thought I'd have a nervous brake-down. This baby screamed so loud, people from other offices were coming in to see if there was an emergency! The closing took over an hour, I needed a stiff cocktail as soon as we walked out!

Again, much good luck,

Jane

Thanks Jane - and have a great holiday!