8:36 PM 01/22/2013
The title says it all really (also I Googled variations on that and couldn't find anything, so hopefully any answers will make it easier for anyone else with this issue).
I am attempting to refinance my mortage. The co-op president (self managed buidling) is not being forthcoming with following - finanicals for the prior two years, certificate of insurance, budget and co-op questioinaire.
Her justifications are that
- I should have the financials (which is fair enough as I should, but I don't, so I need new copies)
- The co-op doesn't have a budget as we're not required to (!) and that I should put something together based on some *proposal* of expenses from a meeting we had a year ago when discussing whether or not to take out a loan.
- The co-op doesn't have a co-op questionaire, which I know to be untrue, it was required when I bought my apartment, however I never saw it. My mortage broker provided an example, but I need her to fill most of it out.
- As for the certificate of insurance, she'll look for it when she has time, but is busy until after 4/15 with her personal work and additional co-op duties. I have offered to gather the information myself, as well as assit with the co-op duties, if she'll point me in the right direction, but no repsonse. Every time I reach out I get a different answer.
Further complicating matters is that the Treasurer has moved out of the building to travel the world for 6 months. She is not reachable by email. The President assumed her duties so she has all of the documents and there's no other way for me to get at them.
I'm at my wits end as I'm good to go apart from the co-op documents. This re-fi will "save" me $300pm and I'm getting nothing but pushback.
Additional complications - after 4/15 the reserve will be $0, which is a whole other issue especially since we took out a massive loan to pay for some construciton and which was supposed to leave us with a reserve (I'll deal with this with the rest of the co-op later as it was only brought to my attention late last week). This means that after 4/15 I won't be able to re-fi at all, because, depsite my 805 credit and low-debt-to-income ratio, no lender will take on a loan for a building with no reserve, at least not for decent rates.
What can I do? I am very worried about my refi and also that it appears that the co-op board seems to be mismanaging our finances in order to keep maintenance low. I don't think the financial mangement is malicous in anyway, I hightly doubt anyone is living it up on the loan we took out, however it's worrying that it was all spent without letting us know. Everyone else in the building has lived here for years and don't want anything to change, so just keeps quiet.
This sounds more like a rant than I meant it to, but I have a lot of money (for me) tied up in my apartment. I reached out to the other people in the building, but got no response.
Do I need an attorney? I don't understand why it has to be so difficult.
I did some research and I found out we're supposed to be having annual meetings, minutes, budgets etc. I plan on setting all of this up going forward, as well as researching what else we need to be doing, but none of that will help me with the re-fi I'm currently attempting.
The frustrations with your COOP Board are very similar to those many also have with Condo management as well. I am not trying to sugar coat it; as while you are not alone this is a serious issue on many levels.
From a financing underwriting perspective COOPS and Condos have stringent guidelines that must be met to qualify for financing. While the borrower may be well qualified, the property can be problematic if it does not meet guidelines. Unacceptable Collateral = No Financing. Larger HOA's (or one's enlisting a professional Management Company) will have their budget, questionnaire, etc. available through an online website where you would pay for these docs. But smaller HOA's are definitely more prone to challenges to getting docs timely.
One of the first things I do on Condo and COOP financing is have the HOA Management complete a questionnaire to confirm the property meets guidelines. Aside from slow to unresponsiveness for documentation, the most critical issue I see is that your COOP has no reserves. I am not sure what the requirements are for the lender you are proceeding with, but, in general, a 10% of annual budget reserve is required by every lender I work with.
Suing your HOA is essentially suing yourself. Avoid that route until all humanly possible alternatives are exhausted. Try and befriend a Board member (or even run for a seat on the Board if you must) as these are serious issues that are assocated with managing your home.
Good luck! -Adam Roberts South Shore Mortgage email@example.com
8:21 AM 01/23/2013 | 2 Votes
As far as documentation, assuming your coop President isn't being malicious, just make it as easy as possible for them to help you. You fill-out the questionnaire yourself and leave it for a board member to sign, ask for the name of the insurance company who provides the building insurance and you can contact the insurance company directly to get the certificate of insurance (I would guess Brownstone Agency), get the name of the accountant and ask them for the financials directly. Draw up your own budget based on the amount of maintenance that is paid annually by all owners. Frankly, providing this info to owners is one of the responsibilities of being a board member so I don't see why the Pres is giving you such a hard time.
9:50 AM 01/23/2013 | 1 Votes
Some lenders have internal coop lists. If the approval is up to date they may not require further documentation. That said the coop will need to sign and stamp the recognition agreements/AZTECS so you will still need her for those. How many units is your building? Sounds like a small coop which can also be an issue if you have 4 units or less depending on the letter. There was a NY Times article a few weeks back discussing the issues with financing small coops where yours truly was quoted.
1:59 PM 01/23/2013 | 0 Votes
lender, sorry typo
3:06 PM 01/23/2013 | 1 Votes
I live in a small co-op where each and every shareholder was asked to join the board but few stepped up. My co-op also didn't have a budget, so I stepped up and now do the finances and budgeting. I aim for transparency, so I send a financial summary document to everyone several times a year. This doesn't mean that people (especially those who aren't participating in the board) don't ask again for the same information I have forwarded to them. The suggestion about doing what you can yourself and asking the pres to sign is good. It's also good to maintain your own co-op files and to volunteer to help out with building matters. It's exasperated to me when shareholders make requests lof me ike I'm at their beck and call to do whatever they need at the drop of a hat; I'm not. Usually when we've had a refinance, I've told the shareholder to look at their offering plan for the information required in the questionaire and to fill out what they can, then forward to me to finalize. I also give them the phone number of the insurance agent.
5:14 PM 01/23/2013 | 1 Votes
Thanks so much for all your responses, they've all been helpful. I did put together a budget and managed to track down some of the documents from the last person who sold. The rest were left outside my door today (after some prompting by a third party). While I hesitate to say it's "malicious", it's more a case of "tribute must be paid!". The difficult issue is that the other board members are board members in name only, one doesn't even live in the building anymore. The president actually holds all the docs and does all the work. Everything is on her terms or not at all. Trust me, I've volunteered to take on many of these responsibilities and have been rebuffed every time. Part of the frusration was that I said I'd gather the documents, fill out the forms etc if I could just be pointed in the right direction, but I couldn't even get the name of our accountant out of her.
My co-op is approved with a couple of lenders, so hopefully that will help things along, this is partly why I want to push it through quickly. I don't expect anyone to be at my beck and call, however I also don't want to be told that I can't get any documentation until a date 4 months in the future or that it doesn't exist, when clearly it does.
I found out that co-ops are supposed to hold AGMs. I asked about this when I moved in but was told "we don't want you coming in and changing things". My research shows this is actually a requirement so I'm going to set something up and put some formal structure around how we do things.
There are 8 units in the building. Other than me and another guy who bought just after me, everyone has been here forever.
I understand this is the price you pay for living in a co-op, especially a self-managed one. While I'm happy to roll my eyes at most of the shenanigans, there's a point at which it's no longer a funny story at a bar.
Anyway, lesson learned, I will keep copies of everything going forward, be proactive about asking questions about finances etc, and if and when I decide to sell I will be prepared.
Thanks again everyone, I really do appreciate it.
9:28 PM 01/23/2013 | 0 Votes