Urgent help needed in closing my first deal issues in financing contingency

5 Replies


I am trying to close my first deal. It's a town home with the hoa under litigation. The litigation is non structural. We still put a financing contingency. Worked thru mortgage broker and got a conditional approval within 3d. Submitted all the paperwork requested in conditional approval. No big issues. 

We have till tmrw to remove the contingency. Now bro ker informed me that underwriter never requested hoa questionaire which would have detailed the litigation. He said he was surprised too but never followed up. He claims the loam processor told him as long as appraisal didn't trigger hoa questionaire then no issue. He said he will get approval from quality control person and if there is no issue there as well we can remove it

However what i think I know is that Fannie always requires questionaire

A. Do I trust my broker that is qc person says okay we are cool

B. When do u remove contingency typically. Conditional approval or fina approval or some other stage

C. Shall I just walk away after all this effort

Thanks so much. I listed urgent since I don't have much time.

As an investor you need to protect your investment, and part of that includes deposits. You are well within your right to demand the broker put communication from them to you in writing as it relates to sensitive contingency expiration matters. Their loan processors may communicate with them however they want, but they have a fiduciary responsibility to keep you informed. If you request this in writing to them then they've been put on notice you are requiring they communicate the status of the hoa questionnaire to you in writing. 

Let s/he know you're nervous about the contingency expiring without confirmation the hoa questionnaire isn't going to be required by the lender, and uncomfortable letting it expire unless you've received said written confirmation.


Either get an extension for your loan contingency, or cancel.

@Roy Mitle

If the litigation is covered by insurance or has to do with quality of life issues between units, then this will  not be an issue on a Fannie deal. 

If this litigation is not covered by insurance, you would need to find a portfolio lender who will overlook the litigation, which may or may not be possible. 

Early in the morning, let your realtor ask the seller's agent to extend contingency deadline because your lender screwed up. If you get this back in time from seller in a signed form, then have the lender work it out. If the seller stalls, I would cancel the contract in time before I risk the earnest money.

I know nothing about the likelihood if the lender will end up getting you the loan. Mortgages for condos are harder to structure than for SFRs or town homes.

@Roy Mitle 

The HOA Cert aka full review aka limited review is ALWAYS needed for any deal that involves an HOA.

Broker dropped the ball on this one.  As Wayne said try and get an extension or cancel.  

Another option is to find out exactly what the repair cost would be.  Fannie is very detailed about this so you'll need to read the sellers guideline on this issue.

What exactly is the litigation for?

Also I'm not a realtor but I'm pretty sure you have 21 days in California to remove contingencies.  Look at your contract and read it through carefully.  Also get your realtor on the horn and go over this so you don't lose your cash Sir.

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