hoa wont sign loan docs, cant get loan!

So my parents bought a condo at a really good deal because they used their home equity line to buy cash. They have been trying to get a cash out refi so they can get most the home equity line back. reason is the intrest is low, but can adjust up tp 9% and we know intrest rates will rise soon so they want to lock in on a 30yr so better cashflow.

bank says the HOA is refusing to fill out the questions because its a liability. all they have to give is the financials, and answer 2 sheets of questions. this happened to the lady above me too and she couldnt cash out refi either.

that is stupid. if they dont let people get loans how could they ever expect to fill the complex up with people who will pay the hoa fee? they cant even move in!!!

is this legal? last time i called the hoa lady about the lady who lives above and her loan, she said, " yea, they were trying to do something weird. selling the condo or something." they were cash out refi!! any help guys?

Edited: 06/26/2010 at 11:02AM

Frank Adams

· Loveland, CO

1,170 posts
4 awards
50 influence

Dec 31 '09, 05:18 AM

We need to sort a couple of things out;

1. This does not concern YOU (except personally) so your parents need to go to the HOA and ask/tell them to SHOW THEM IN THE BYLAWS (I'm assuming your parents are familiar witht he bylaws) what right they have to UNREASONABLY WITHHOLD INFORMATION.

2. Forget the lady upstairs. That is no concern either, you don't know (although you probably think you do) the specifics of that and even if you do, IT IS OF NO CONCERN.

Then if the HOA refuses they need to inform them that they are (possibly) in violation of the HOA rules and STATE LAW. Tell the HOA that the next stop is your attorney's office where you will obtain a WRIT OF MANDAMUS (I'm not sure that's the correct term, the attorney will know) and that you will petition the judge to have the HOA pay all fees involved in obtaining same.

Good luck.

all cash

Edited: 06/26/2010 at 11:03AM

Don Konipol

Note Investor · Tempe, Arizona

Pro Basic

1,068 posts
17 awards
87 influence

Dec 31 '09, 02:29 PM

I have found that when dealing with unreasonable rules, regulations or people the involvement of my attorney is usually enough to insure that the other party becomes reasonable. Many people become indignant about having to pay an attorney to obtain something they believe that they have a reasonable right to, but unfortunately we live in a society where "legalistics" has overtaken reason.

Edited: 06/26/2010 at 11:03AM

Bill Gulley

Real Estate Investor · Springfield, Missouri

5,643 posts
13 awards
100 influence

Jan 01 '10, 01:11 AM

Hi, your HOA is probably a non-profit association, either way you have a right to its financials.
I would play hard ball quickly. There is a financial loss from their failure to perform in the matter. Mostly, the possible income that the cash out refi can produce for your parents, the debt that may be paid off, etc...they are keeping them from or obstructing fair trade. Federal laws pertain to the requirement for verifications to be completed with federally insured loans. Your parents and the lady upstairs may want to join forces with an attorney. The HOA may be responsible for the loan amounts plus damages. The HOA may have some dirty laundry, contingent liabilities, escrowed funds, maintenance issues or other issues that they do not want made public, all the more reason to push them into compliance. Tell the HOA in a certified letter to provide the documentation within a timely manner or you will seek other remedies. Bill

Edited: 06/26/2010 at 11:03AM by Bill Gulley

Dwight Droze

Real Estate Investor · citrus heights, California

138 posts
2 awards
50 influence

Jan 01 '10, 02:59 AM

thanks guys. i guess they talked to their attorney and starting monday they are going to work something out with them. we have the financials, its really a questionaire and a signature. the hoa callled yesterday and said oh, there is nothing holding up on our side. no paperwork here for your condo.

yea thats because they told the bank we wont even give you our fax number to send your documents. its a liability to give out the info you requested. This is exactly what they did before to the other lady because i was going to get the loan with the same lender she was and the lender told me they wont bother because that HOA wont sign anything.

so we are going to fax it to them ourselves and see what they say because they wont accept it from the bank. hopefully no problem and we can get this over with!

Edited: 06/26/2010 at 11:03AM

Ofgift Gift

· Tucson, Arizona

946 posts
4 awards
50 influence

Jan 01 '10, 04:46 AM

If you decide to get an attorney, do NOT get one associated with Community Associations Institute (CAI) or any of it's offshoots. They work for, support, lobby for, rules that strengthen hoas and weaken homeowners.
In fact, look for one that is anti-hoa/coa.
Ofgift

Edited: 06/26/2010 at 11:03AM

Erik Kiehle

Real Estate Investor · Longview, Texas

2 posts
50 influence

Jan 31 '10, 02:51 PM

Have your parents check with the bank about their Home Equity Line. Some of those can be converted to fixed at current interest rates, though mine from Wells Fargo has a max term of 10y if I recall what they told me in '03.

Just an option if your parents are mostly concerned with locking in low rates.

Edited: 06/26/2010 at 11:26AM