Fannie MURDERS Condos!!!!!!!!!!!!!!!!!!!!
From Tonight's WSJ:
Just as a flood of new condominiums are scheduled to hit the housing market this year, Fannie Mae has added restrictions making it more difficult for developers to sell their units.
The government-backed mortgage-finance company stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51%. In addition, the company won't back loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single-entity.
The new policy became effective March 1, and most lenders have started to implement Fannie's guidelines....
Still, condo developers say the rules may hasten the failure of countless buildings across the country and seem to be at odds with federal efforts designed to speed along a housing-market recovery. "These buildings are just in purgatory. This new requirement is the straw that's going to break the back of a lot of projects," says Norman Radow, an Atlanta real-estate investor who works with lenders to rescue distressed condo complexes. "It's a weight being tied to a drowning industry."
Moreover, Fannie and Freddie are both set to increase fees on condo buyers next month. Buyers without at least a 25% down payment will have to pay closing-cost fees equal to 0.75% of their loan, regardless of the borrower's credit score. The companies say these fees are necessary to protect against higher default rates.
The changes come as cities brace for a new flood of condo supply. Reis Inc., a New York-based real-estate firm, estimates that 93,000 new condo units will be completed this year, a 28% increase in new inventory from last year. More than 12,000 units will be completed in New York and northern New Jersey by year's end. Chicago will add 5,500 units, Seattle has 3,000 units coming online, and Los Angeles is readying 2,600 units, according to estimates provided by Reis.
GOOD LUCK TRYING TO SELL A CONDO NOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Aren't we trying to make it easier to get a loan?????? What happened to bailing out the homeowner.......how many building do you think 15% of the owners are delinquent on association fees.
Let's just BANKRUPT EVERYTHING and EVERYBODY right now and get if over with QUICKLY...including the banks....this slow death march is going to drive the nation into a Spector Vector downward trajectory uncontrollable frenzy. If the banks are the only ones getting bailed out, they are going to foreclose on everthing and everyone and own the ENTIRE nation as all go broke.....maybe that is what Geithner wants after all??????
If you are an employee you have a good chance of getting fired. If you own a business, there is a strong liklihood your customers won't pay you and you may be forced to shut down. If you own a shopping center, tenants are likely to go out of business destroying your cashflow. If you own a credit card, there is a good chance of getting your limit cut and FICO score reduced or interest rate raised. If you own a condo, good luck selling it now after the NEW guidelines. If you have a wage contract with a city, you could get a pay cut. If you are an exectutive for the Largest Insurance company in the world and help bankrupt it.....you WILL get a bonus for millions.
Now do you see why I say Prepare?????