Real Estate & Property Law

Alert - FEDERAL FHFA Regs May Hurt HOAs and Condos

Please see the message below and follow the sites for more information - caionline.org and caicalif.org to stay informed!

From The Community Associations Institute and the CAI-California Legislative Action Committee:

"ALERT - FHFA SEEKS BAN ON PRIVATE TRANSFER FEES

By now, many of you may have heard about a proposed regulation from the Federal Housing Finance Agency (FHFA) issued on August 13, 2010.

The proposal would prohibit Fannie Mae, Freddie Mac and all federal home loan banks from purchasing mortgages for properties in communities with deed based transfer fees. While the target of the regulation appears to be private transfer fees that require a payment to a third party each time a property is sold, the proposed rule would include deed based transfer fees used by many community associations.

The impact of such a rule would be devastating to communities with such restrictions and would likely mean that their properties would be unmarketable. The reason for this is that Fannie Mae, Freddie Mac and the Federal Home Loan Banks originate most mortgages. If they cannot purchase such mortgages from banks, banks will likely not lend money to these properties. To further complicate matters, it is difficult ? if not impossible ? to remove a deed restriction, as it usually requires a super-majority of all property owners to approve such changes and, in some instances, requires the consent of all property owners.

CAI has already communicated our immediate concerns on this matter to FHFA. However, we will be submitting comments to ensure that FHFA reconsiders its position.

We have an update on our website."

Take a look, stay informed on this important topic. Visit
caionline.org and caicalif.org.

Full post as published by California Condo & HOA Law on September 09, 2010 (boomark / email).