The Los Angeles condo market experienced a significant decline before
the mortgage credit crunch started. In fact, Los Angeles was one of the
markets that promulgated the credit crunch with its higher than normal
foreclosure rate. On August 2, 2007, American Home Mortgage went belly-up, sparking a chain reaction of A paper lenders to close their doors, permanently. 262 lending institutions have "imploded"
since the sub-prime mortgage decline in late 2006. The mortgage
industry contraction has exacerbated the Los Angeles housing market
decline, especially the condominium market.
It doesn’t have to stay like this.
Condominium management associations are dealing with stressed out
homeowner associations, who are responding to angry homeowners.
"Where
are all the qualified buyers?", they demand. "Why is the Los Angeles
condominium market in a free fall?"
I have the answer. Nobody can get financed. Well, nobody is a
strong word; very few can get financing for Los Angeles condominiums. On
June 2, 2008, Fannie Mae severely limited its approvals for condominium financing. Now, you need at least 10% down payment to get a
loan for a condominium….UNLESS…
…you read carefully. I know how to stop these prices from dropping like a ball off a table; government financing.
That’s right, FHA or VA loans can save the Los Angeles condo market.
They don’t have "declining market" adjustments, aren’t relying on PMI
companies to insure loans with a down payment of less than 10%, and
offer competitive loan terms to borrowers. The problem for FHA/VA home
loans in Southern California? Most condominium complexes are NOT
approved for government loans. If you’re a condo owner, or a HOA board
member, or an association management company employee, you can check to
see if the complex is approved for:
If your complex isn’t approved for government loan financing, you
have effectively cut the pool of potential buyers by two thirds. Many Los Angeles condominium buyers are first-time home buyers and don’t have
20% down payment. When you limit the pool of potential buyers, you
work against the already stabilizing housing market in Southern
California.
While houses may rise, later this year, Los Angeles condominiums can
still decline in value because of poor management. Can you afford to
have your property investment go sour because of laziness or lack of
information? It doesn’t have to be that way.
Call me and I’ll help assist you with the government loan approval process.
It may take 4-6 weeks and will probably cost the association about
$2,000 to get the complex approved. While that may sound costly, I
assure you that your homeowners will be ecstatic that you’ve stabilized
their property value.
Brian Brady is a San Diego-based mortgage banker and can be reached at 
858-777-9751
.
{ 3 comments… read them below or add one }
As a Toronto real estate agent I think that it is the role of the government to take responsibility back to its own hands and help a market in the free fall. It would be only profitable for the state itself when it helped its inhabitants when they are facing a difficult situation they cannot manage themselves.
I guess i’ll agree too.. It is the government that must have an action about this to help the real estate back on track again..
-david
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