But I *was* going to go sign the closing papers late this week...

Nov 18, 2008

The home purchase is in jeopardy - and it's all due to paperwork, and it's nothing I could possibly have any influence over.

FHA loans are loans from the US government, not from a bank. FHA loans are often used by first time homebuyers because you don't have to have as high a credit score to qualify for one. Thus, people with little to no credit history can apply for and get an FHA loan. (FHA loans can also let the homebuyer make an initial downpayment as low as 3% - another attractant to the first-time homebuyer, since they don't have to have as much liquid assets to get themselves into a house.) For the past five years, people have gone more with conventional loans (including many of the subprime loans that are now one of the most visible, publicly-berated cause of our economic woes) than with FHA loans. Starting in July 2008, however, the FHA cast the hairy eyeball at the mortgage industry (and all its little wizards) and said to itself, "Self, we don't want to end up that teetery in five years. We'd better make the requirements for FHA loan approval more stringent." So now, along with the building being liveable and having records of any maintenance or additions being done by proper contractors, condos, townhomes and coops must show sound property management including sound fiscal policy. That means a separate bank account for the HOA, decent cash reserves available for any building-related maintenance or emergencies, and a paper trail showing regular deposits of the dues collected from the homeowners.

With me so far? Good.

Now, some history from another angle: this particular condo complex includes 16 cottage units. The complex was built in 2001, so residents moved in beginning in early 2002. Because they were so very small, the residents decided to manage the homeowner's association themselves. They set up a separate bank account, they kept maintenance records and meeting minutes, they collected homeowner's dues and deposited them into that separate bank account. They'd actually built up some pretty healthy reserves. However, by 2007, this whole process had begun to pall. Screw this self-management crap, said the sixteen. Let's just raise the dues and hire a property manager. (They also probably decided to do this because one of the sixteen, one of the more active, was going through a divorce, so probably would not be staying in the complex much longer. And when you lose your most active members...time to outsource.) They did some research - and by May 2008, a property management company took over the homeowner's association management and administration. One of the issues found was that while the homeowners had kept regular meeting minutes, they were not as complete as they could have been paperwork-wise. So the new property manager set about getting things organized. In October, he applied for FHA approval of the complex as a whole - so that if people who could only get an FHA loan wanted to move in, they would be able to do so. (FHA approval makes a complex look more attractive - if a complex is FHA approved, that's almost shorthand for "sound management and maintenance practices".)

You still with me? That last bit was a little dry. Go grab a sandwich or a drink. I'll wait.

Okay, so fast forward to this month — this week, actually. As the last step in getting the deal completed, the lenders (specifically, The Gubmint) need to see that the property that I wish to buy is FHA approved. If it isn't...no loan for me. At least, not to buy *this* particular property. My mortgage broker has been communicating with someone in the loan office, sending over all kinds of papers so that this particular unit can be spot-approved by the FHA. It involves much backing-and-forthing. (Thank the forty-nine little godlings for emails.) The property manager heard that the loan people need to see not just the current amount in the HOA account, but a line item or some other paper trail showing regular monthly deposits equal to the monthly HOA dues collected from the homeowners. However, because of less-than-stellar bookkeeping by the self-run management, that line item / paper trail isn't there. The property manager asked - through my mortgage broker - if he could send bank statements for the previous months of that account, showing the regular deposits. (The feds need to see that that money's been there all along, rather than, say, pulled out of some account in the Cayman Islands in October just to look good for the FHA approval committee.) The person at the loan office didn't reply, though, because the person at the loan office works from 6am to 3:30pm. (Isn't that just spiffy?!??) So I'm on tenterhooks until sometime tomorrow, when this conversation is resumed and the statements are either sufficient, or we're told that some other paperwork must be produced to get FHA spot approval.

Which all means that there's miniscule chance that I won't be closing on November 24th, after all.

Fuck, fuck, fuck, fuck, fuck, fuck, fuck. A-a-a-and FUCK.

Possibilities are:

1. the FHA spot approval could go through tomorrow or the day after, I could still close before Thanksgiving.
2. the FHA spot approval could go through, but not until after Thanksgiving - which would delay closing until early December.
3. the FHA could decide, well, this is already in progress, let's let it run the full fifteen weeks and run every last little check. If that occurs, and the complex is FHA approved, closing would happen in mid to late January.
4. the FHA spot approval could not go through due to some other reason, which may mean that I'd have to wait in limbo for the whole complex to undergo the normal FHA approval process. Again, closing would happen in mid to late January.
5. the regular FHA approval might not be granted (due to some number looking funny or what), which would mean that I could not buy the place with an FHA loan. This would mean that I'd apply for a conventional loan. If I got a conventional loan, I might have to go through the whole damn process again...unless some other buyer snaps the property up. Assuming I applied for and got a non-FHA loan, closing might happen as early as February - but more likely March.
6. with no FHA lending approval, and unable to qualify for a conventional loan (first time homebuyer, nonexistent credit history other than a CapitalOne card), I would not be able to purchase this condo, and would have done all this stressing for absotively posilutely nothing.
7. worse, the other condos I've looked at don't hold a single candle to a detached condo. If I now had to settle for buying one of those units and living there for a few years while I built up my credit history, then to hope that something as cool came available when I was ready to buy again...I think I might just give up and consign myself to a life of renting.

I don't drink. I can't drink. I can't hold my liquor; and my liver took lots of wear taking dilantin for a quarter-century. Heck, the last time I had a near-beer, I had the mother of all hangovers and two seizures. But if I thought I could get away with it...I'd go to the pub and get myself good and drunk.

Instead, I went to the grocery store. Oh yes, children, Momma went on a depressive-sugar-shopping minibinge. I got

8. eggnog
9. spiced cider mix
10. raspberry Pims
11. good quality cocoa
12. a raspberry danish loaf
13. two big chocolate bars
14. ...in other words, absolutely nothing with any nutritional value whatsoever unless you count protein molecules that may have rubbed off of the packaging

I can't get drunk, but I can damn well give myself a sugar high. I have twenty-four hours of limbo staring me in the face. When limbo's over, either I'll know that yes, Virginia, I'm buying that cottage, or I'll have to go to the apartment complex managers and tell them that I won't be moving out after all. And then, of course, I'll have to call the cable company and tell them not to switch my services over, call the electric company and tell them the same thing, call the movers and cancel that appointment, call the carpet cleaners and cancel that appointment, call work and tell them that I will be working those two days after all (save up my time off for whenever I *do* eventually move), and possibly - possibly - start unpacking. At least enough so that I can get to my books and DVDs easily for however long I'm still at this place.

Fuck, fuck, fuck, fuck, fuck, fuck, fuck. A-a-a-a-aaannnnd FUCK!

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