New Federal Law?

ValerieS2 (Michigan)
Posts: 244

Posted:

I have been receiving requests from a lady at PNC bank for HOA information for a refi one of the residents is working on.

In my three years as treasurer I have prepared many such statements covering status of annual dues, budget and verification of liens and special assessments - takes me about 15 minutes all told.

Please take look at the attached questionnaire.

Unless it is mandated by law, I am definitely NOT comfortable with providing the information being requested. I told her we are a volunteer board with limited time and resources and that I would not be spending that amount of time and research without the HOA submitting an invoice to PNC Bank.

She said to go ahead and submit the bill and it would be paid at closing. I asked "paid by whom?" she said be the residents trying to refi.

I said no, the residents are not the ones requesting this intrusive amount of information, PNC Bank is and I would expect PNC Bank to pay. She said Fannie Mae and Freddie mac now require it.

I said, fine, give me proof of that and I will see what I can do. She told me to google it. I told her once she provided proof that the Federal loan programs need that level of detail, I would begin compiling it.

Is this questionnaire normal and legal?

Thanks!

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JohnB26 (South Carolina)
Posts: 1,569

Posted:

the form you attached is for a condo association

if you are ~ get used to it ~ they are performing DUE DILLIGENCE

if you are not a condo ~ request the proper form

ValerieS2 (Michigan)
Posts: 244

Posted:

Lol John I will not be getting used to that form anytime soon. Not doing the banks work for them. We are detached single family homes; however, classified as site condos.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Valerie,

Oh dear! You have not been keeping up with the times.

Do you have to fill out the form? No. But, by not doing so the owner may not be able to obtain financing for the re-fi, or may only be able to obtain financing at a higher interest rate. In turn, he may file a claim against the association in court which will result in more cost and trouble for you in the long run.

As a result of the housing crisis back in 2008, the FHA, Fannie and Freddie, have tightened their requirements for insuring loans for common interest communities, such as condominiums and the like. Hence, they are now requiring lenders seeking Fannie or Freddie approval for their loans to ask for more detail in their questionnaires. Many, if not most, lenders want to be able to sell their mortgages on the secondary market and, as a result of the housing crisis, just about the only secondary buyer is Fannie, or another lender who wants to see Fannie approval of the loan.

When I refinanced my own home a year ago, I, and my association, had to jump through more hoops than we did back in 2004 when I originally purchased the home. There were more questions to be answered and more detail and documents required. It's just the way things are these days.

So, if you want to be stubborn, don't fill out the questionnaire and your homeowners will suffer because your homes will be less marketable. What do you think that does to preserve home values?

So, who should pay? The answer is easy, the buyer - not the bank or the lender.

Basically, it's no different than the borrower (buyer or person seeking to refinance) paying for a title search or for an appraisal. It's simply the cost of obtaining the loan. Simply bill the bank for the cost of completing the questionnaire and the bank will add that amount to the settlement costs to be collected at closing. At closing, a check for that amount will be prepared and sent to you.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By ValerieS2 on 06/21/2013 1:24 PM
Lol John I will not be getting used to that form anytime soon. Not doing the banks work for them. We are detached single family homes; however, classified as site condos.

Whether they are detached single family homes or not, it doesn't matter. If you are classified as a condo, you are a condo.

Usually, what determines whether a community is a condo or not is how the common property is owned - not whether the units are attach or detached.

MatthewW4 (Arizona)
Posts: 500

Posted:

Valerie,

They are asking that you take a lot of your volunteer time to do their job for them. Much of the information that they seek could be answered if someone from the bank got off their dead butt and visited the site. Other information is available to them from public records.

It's not your job to do research for the bank.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This has been a required form for years. It's simple PUD form. The one I reference to in many of my posts. It is simply the form the HOA needs to fill out with the "Health" of the HOA. Whenever a federally backed loan like FHA, Freddie mac, or Fannie Mae does a closing they use this form. It's really no big deal and I have signed a bunch of them. Only like 5 minutes to fill out.

It's like a HOA assessment form. It covers the stuff like is it "Fee simple" which is the most important part. You may want to have this defined to you. The other parts reference to the rental rates, collections, and if there are existing liens/foreclosures. The FHA doesn't like to loan money to HOA's with a certain percentage of rentals. Which ironically the HOA can't really control. However, this is where that information gets recorded.

The form is a good health guide and filling it out is very important. It will help you all in the end. It's a tool for the mortgage companies to use in deciding their rates and loan programs. More banks are choosing to use it more and more other than FHA.

Former HOA President

JonD1
Posts: 2,350

Posted:

Not sure how NEW the types of forms are but we have been seeing them here for some time now for re-financing and sales.

In our case we have the MC complete the forms. They charge a nominal fee paid by either the seller or buyer but not the banks.

Now recently I had an owner who was listing their property ask if I would fill such a form out for her. Under no circumstances would I do so.

In speaking with our MC the penalties for providing false or inaccurate information and then signing your name to this form can be quite substantial. Now who would decide if the information was intentionally misrepresented well I would not want to risk that with MY name on the form.

As you are dealing in this case with federal agencies you would now be dealing with federal charges.

If at some point the qualifications of the person seeking financing were brought into question I would guess they might be calling you in to explain.

As a volunteer Board member I would not complete or sign such a form.

I would ask the MC. If there were no MC in place I would have the property's lawyer fill out the form and have them charge the buyer/seller for THEIR time and expertise.

When the loan goes bad and they begin to go over the information you provided I want NO part of that process.

Years ago during the boom years of real estate "fudging" the numbers, adding a few units or leaving out a few details was commonplace to secure a loan. You would be crazy do get anywhere near that process now.

And my guess as a volunteer Board member you might not even be competent to fill out the form in a proper manner.

Not positive but I think our MC mentioned a $250,000 fine and up to a year in jail.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Seriously this is now a federal offense? I filled this form out for free and usually the day of the closing. If not hours before the sale. I just provided the information I knew, and signed the document. No big deal. Not going to lie on the form. I was president of the HOA and represented it. So I did have to fill out the form over our MC or accounting firm. I would be more scared to have a paid contractor fill the form out than me the president.

I guess I had my finger on the pulse of my HOA so closely that this form was just no big deal. Others it seems to be a wake up call. It is educational and important. I just hate to see someone's whole house buying experience to go up in flames cause were debating all of this. That is what is being held in the balance here. Someone buying a home. Don't lose site of that.

Former HOA President

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Good Lord! Just fill out the form! More time and effort has already been spent discussing this on this thread than filling out the form in the first place. Talk about being penny wise and pound foolish!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Thank you Bruce! A house sale is being held up because someone is scared of filling out a form? Good grief it is part of the job and responsibility. Just ask questions and be truthful. Done.

Former HOA President

JonD1
Posts: 2,350

Posted:

Quote:

Posted By MelissaP1 on 06/21/2013 5:56 PM
Thank you Bruce! A house sale is being held up because someone is scared of filling out a form? Good grief it is part of the job and responsibility. Just ask questions and be truthful. Done.

Just curious Melissa when was the last time you held a Board position? When was the last time you were filling out these types of forms?

And where does it state part of serving on the Board is filling out loan documents?

Was that in your CCRs? I never saw that in mine.

My guess it doesn't say that anywhere.

My guess many Board members would have a tough time completing such a form. And my opinion as volunteers it is not up to the Board to sign legal documents involving the sale or financing of units with private ownership.

One reason being as a member of the Board you are now adding liability to the Board should you not know as much as you think. As President would I allow a Board member to complete such a form? No.

Have the MC, the attorney, or the real estate agent complete the from and let them sign.

Recently here one agent asked for a $500 fee to complete such a form.

Now the MC I spoke with regarding this manages 12 properties with over 1000 units but certainly your knowledge exceeds theirs.

MatthewW4 (Arizona)
Posts: 500

Posted:

Quote:

Posted By JonD1 on 06/21/2013 4:28 PM
As a volunteer Board member I would not complete or sign such a form.

I would ask the MC. If there were no MC in place I would have the property's lawyer fill out the form and have them charge the buyer/seller for THEIR time and expertise.

Jon,

I like the idea of having the lawyer fill out the form. He's gonna want to be paid in advance for his work and the bank can foot the bill if they want the information. I am sure a lawyer would be very dilligent in his work and you know what they say: "Time is money."

Ditto on your comments that the covenants do not require the board members to fill out forms for the sale of real estate where the association is not a party to the sale.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

If your a good board member or president, you would already know this information or should. It's not that hard. A house sale depends on this form being out. It is just unbelievable the federal and legal case being made here. It is NOT that big of a deal and no one really goes ape crap over this stuff. They basically just file this form away. If they used it all the time, then why ask for it every sale? It really isn't the big deal your making it out to be.

Former HOA President

JohnB26 (South Carolina)
Posts: 1,569

Posted:

fill out the bulk of the form ONCE

photocopy it

VOILA ! ~ 2-3 minutes when you need it again

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Posted By MelissaP1 on 06/21/2013 11:41 PM
If your a good board member or president, you would already know this information or should. It's not that hard. A house sale depends on this form being out. It is just unbelievable the federal and legal case being made here. It is NOT that big of a deal and no one really goes ape crap over this stuff. They basically just file this form away. If they used it all the time, then why ask for it every sale? It really isn't the big deal your making it out to be.

I agree.

This form is pretty normal. Similar to a resale certificate. You should already have all this info handy if you're an officer. If you don't, I question your competence to be an officer. Though it's not required by federal law or whatever your conspiracy theory, if you don't fill it out, it will likely result in someone being denied a loan or refinance or need to pick a loan with a higher rate because its higher risk to the bank.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

If you don't know something just leave it blank.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By MelissaP1 on 06/21/2013 11:41 PM
If your a good board member or president, you would already know this information or should. It's not that hard. A house sale depends on this form being out. It is just unbelievable the federal and legal case being made here. It is NOT that big of a deal and no one really goes ape crap over this stuff. They basically just file this form away. If they used it all the time, then why ask for it every sale? It really isn't the big deal your making it out to be.

So I guess Melissa you won't be responding to my question as to when you in fact held a Board position last? So of course it would not be possible for things to change and what was once simple has now become a complicated process.

Your assertion a home sale is at risk is nonsense if a Board member is not willing guess what they would have to find that information from someone else! Maybe the real estate agent might have to do some work for their commission. If you are buying or selling a $300,000 home my guess a small fee would be well worth the additional cost.

Now John suggests you simply make one copy and done. Well some of these forms includes a breakdown of owner/non owner residents in my world that number changes on a regular basis.
Litigation guess if you answer NO that is now the case forever? So having one form without updates is not practical OR doable.

And lets just assume Melissa you WERE the most knowledge filled Board member that ever existed when it came to YOUR former property. What about those numerous Board members who don't have the information or understanding you had? Do I want them giving it their best shot? And it is not a matter of being truthful alone is is about being accurate in the information you provided.

So I would not complete or sign such a document and I would not require any other Board member do so.

I don't put my name on legal documents which expose me to liability when there is another simple option. As a current Board President I listen to the professional MC who works with this sort of paperwork each day and processes forms like this each day through their office.

Now Melissa if and when you once again hold a Board position you yourself can sign whatever documents it is you wish.

Why put yourself and your property in that position when you don't have to?

MatthewW4 (Arizona)
Posts: 500

Posted:

Quote:

Posted By ValerieS2 on 06/21/2013 12:14 PM

She [bank employee] said Fannie Mae and Freddie mac now require [the form].

If this is a federal form, why is there no federal agency named on it?

The form says "PNC mortgage condominium worksheet/questionnaire." This tells me this is just a lazy lender who expects others to do their job for them and will lie about it.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By MelissaP1 on 06/21/2013 11:41 PM
If your a good board member or president, you would already know this information or should. It's not that hard. A house sale depends on this form being out. It is just unbelievable the federal and legal case being made here. It is NOT that big of a deal and no one really goes ape crap over this stuff. They basically just file this form away. If they used it all the time, then why ask for it every sale? It really isn't the big deal your making it out to be.

Just for the fun of it, I printed this form and filled it out for my community. Most of the information I knew right off the top of my head and the rest, like name and address of insurance company, premiums, deductible, HOA budgets, etc., I would have to look up but would only take me a couple of minutes since I already have it on file.

The time it took me to complete the form was less than 20 minutes.

If your community is of any size, chances are you have a property manager. The PM has all the information needed to fill out this form. Your PM probably completed forms like these several times before and does it as a regular part of the job. Turn the form over to the PM and let him or her do it.

If your community is small, and if you are self-managed, as a board member I would expect you know, or should know, the answer to most every question on the form.

1. General project information: Some of the questions didn't apply to my HOA. I left those blank. The answers to all the others I knew off the top of my head. Time to complete: < 2 minutes.

2. Insurance information: Had to look that up. Time to look up and complete: < 2 minutes.

3. Budget information: Board meeting Monday, just happen to have a copy of the budget in the meeting package on my desk. Time to complete: about 1 minute.

4. Management company information: If you are self-managed, you need answer only questions 21 and 22a. The rest don't apply. If you do have a management company, you shouldn't be filling out this form anyway.

5. Litigation information: If there is no current litigation, answer question 26a no. The rest of the questions don't apply. If there is current litigation, the borrower probably won't get the loan anyway.

6. FHA Information. If it's not an FHA loan, then you don't need to complete this section. I filled it out anyway. It took a little longer for this section. About 3 minutes.

7. Declaration and bylaws. Leave blank. Don't send them unless they are asked for. Even then, the declaration should be on file with the deed and let the title search company get that one.

8. Unit sales and occupancy: Pretty simple. Took me a minute.

9. Unit Breakdown. If your community is complete built, some of the numbers asked for will never change. If it not completely built, hand this section to the developer (or the developer's secretary) and let the developer fill it out. They probably know the answers better than you do.

Should you sign the form? That depends on how comfortable you feel. Surely, some officer of the association must be able to sign legal documents for the association. Someone has to be on the hook as a registered agent (the person to be served court papers). Let that person sign.

When I refinanced my home last year, our PM completed a similar form.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By MatthewW4 on 06/22/2013 7:49 AM

Posted By ValerieS2 on 06/21/2013 12:14 PM

She [bank employee] said Fannie Mae and Freddie mac now require [the form].

If this is a federal form, why is there no federal agency named on it?

The form says "PNC mortgage condominium worksheet/questionnaire." This tells me this is just a lazy lender who expects others to do their job for them and will lie about it.

It's not a lazy lender. The lender doesn't know the information needed to fill out the form. For them to learn the information to fill out the form someone from the HOA or the management company is going to have to provide the information.

Hey! Guess what? That's what the form is for!

JonD1
Posts: 2,350

Posted:

Quote:

Posted By MatthewW4 on 06/22/2013 7:49 AM

Posted By ValerieS2 on 06/21/2013 12:14 PM

She [bank employee] said Fannie Mae and Freddie mac now require [the form].

If this is a federal form, why is there no federal agency named on it?

The form says "PNC mortgage condominium worksheet/questionnaire." This tells me this is just a lazy lender who expects others to do their job for them and will lie about it.

Well Matthew it could be a lazy lender who doesn't want to do the leg work or pay the fees. Or a lazy real estate agent who would rather someone else gather the information and swear to it. Or a cheap property owner who doesn't want to spend a few bucks when they can have a willing Board member fill it out and assume the liability of the information being accurate.
And you have Board members willing to do this for free when everyone else charges for ANY of their services.

As I said just a week ago an owner asked me to fill out a form for them. She was looking to save herself money and why shouldn't I provide my time for free? Her form included required information about "wetlands" I myself don't retain information about designated wetlands in our area perhaps Melissa does. The real estate agent who was selling the property only wanted $500 to complete the form. But I should do it for nothing and sign my name.

Now the solution, so we don't put to risk the sale of a home, was rather simple. Submit the form to the MC who does this sort of paperwork each day and pay.........a $60 fee!

Gee do you think that might prevent the sale??? $60 whole dollars....

I don't want MY name on loan documents involving the sale of private property NOT HOA related issues out there forever. Because IF an issue ever arises it will be YOU they contact for an explanation. I would prefer to avoid that.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Interesting conversation. Really along the lines of lead, follow or get out of the way.

Personally I would have no issues filling out the form to "the best of my knowledge" but I can see where some would not be comfortable doing so.

EllieD (Vermont)
Posts: 446

Posted:

Bruce,

I did as you did - Printed out the form.

We are a completely self managed Condominium Association. I am a Board Member and have been for many years. We have no Management Company or Managing Agent.

It is not uncommon for us (the Board) to get these types of form to fill out. And as you, I could answer most of the questions “off the top of my head”. And those answers that I did not know, like you – I could easily look up.

Also as you pointed out this is a “Bank Form” not a Federal FHA Form. Apples and Oranges. Although the “Bank Form” does appear to contain some of the FHA questions.

Also the “certifying” requirement on the Bank Form is – “to the best of my knowledge, etc, etc” – so, as such I would have no problem signing.

Now as to the FHA questionnaire – that is a completely different story - or was for a time – as it had the following below the signature line.

“Title 18 U.S.C. 1014, provides in part that whoever knowingly and willfully makes or uses a document containing any false, fictitious, or fraudulent statement or entry, in any matter in the jurisdiction of any department or agency of the United States, shall be fined not more than $1,000,000 or imprisoned for not more than 30 years or both. In addition, violation of this or others may result in debarment and civil liability for damages suffered by the Department.”

http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf

I believe that, that signature certification requirement may have been modified - see:

http://www.caionline.org/govt/news/Political%20HeadsUp%20Public%20Document%20Library/FHA%20Releases%20Condo%20Updated%20Guidelines%20-%20CAI%20Release%209%2013%2012%20FINAL.pdf

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By EllieD on 06/22/2013 12:53 PM
Now as to the FHA questionnaire – that is a completely different story - or was for a time – as it had the following below the signature line.

“Title 18 U.S.C. 1014, provides in part that whoever knowingly and willfully makes or uses a document containing any false, fictitious, or fraudulent statement or entry, in any matter in the jurisdiction of any department or agency of the United States, shall be fined not more than $1,000,000 or imprisoned for not more than 30 years or both. In addition, violation of this or others may result in debarment and civil liability for damages suffered by the Department.”

Ellie,

I'd be a little cautions about signing any form that contains a similar statement, too.

But, the key is the words "whoever knowingly and willfully." That's pretty hard to prove. I prepare tax returns and the IRS can levy severe penalties against any preparer who "knowingly and willfully" prepares a false or fraudulent return. We keep a copy of all the documents a client provides us and a careful record of all questions we ask a client and the answers given.

JonD1
Posts: 2,350

Posted:

The only issue you might have with a "to the best of my knowledge" atempt is if and when "to the best of my knowledge" proves to be not good enough. So if you offer incomplete or forms missing sections the bank might kick it back and reject the application.

Now how do I know because that happened. An owner filled a re-fi application the form was sent to the MC to be completed. The completed form was reviewed and the information did not satisfy the loan department.

Next they made th owner re-apply for this loan modification and pay for a second time the $500 application fee.

Then I was contacted by the bank rep. who informed me that in order for this application to be accepted I would have to provide a written letter detailing the procedure we had use to formulate and set up or budget and they also needed a line by line explanantion of how we arrived at our estimates.

And of course they wanted me to sign this letter. I declined.

So now the owner had laid out $1,000 and gotten no where.

Myself I would make every effort to complete fully these forms the first time around because if not it may end up costing the property owner duplicate charges for work that was already done.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By BruceF1 on 06/22/2013 1:45 PM

Posted By EllieD on 06/22/2013 12:53 PM
Now as to the FHA questionnaire – that is a completely different story - or was for a time – as it had the following below the signature line.

“Title 18 U.S.C. 1014, provides in part that whoever knowingly and willfully makes or uses a document containing any false, fictitious, or fraudulent statement or entry, in any matter in the jurisdiction of any department or agency of the United States, shall be fined not more than $1,000,000 or imprisoned for not more than 30 years or both. In addition, violation of this or others may result in debarment and civil liability for damages suffered by the Department.”

Ellie,

I'd be a little cautions about signing any form that contains a similar statement, too.

But, the key is the words "whoever knowingly and willfully." That's pretty hard to prove. I prepare tax returns and the IRS can levy severe penalties against any preparer who "knowingly and willfully" prepares a false or fraudulent return. We keep a copy of all the documents a client provides us and a careful record of all questions we ask a client and the answers given.

Gee only 30 years and $1,000,000 why worry.

Now if you don't fill out and sign such a form you never have to worry how tough it is to prove.

If the loan goes bad, the bank or federal agency begins to review the documentation with that loan YOUR name never comes up. Sounds good to me.

MatthewW4 (Arizona)
Posts: 500

Posted:

Quote:

Posted By BruceF1 on 06/22/2013 8:11 AM

It's not a lazy lender. The lender doesn't know the information needed to fill out the form. For them to learn the information to fill out the form someone from the HOA or the management company is going to have to provide the information.

Hey! Guess what? That's what the form is for!

Yes, it is a lazy lender. Most of the information requested is public information available from either the county recorder, the county assessor, or the clerk of courts. Many of the other questions (such as commercial space) could be answered with a drive-by or in-person visit to the site.

I notice that you did not address the other issue I raised: that the bank employee tried to obtain the information by fraudulently claiming that the association was required by law to fill out what is actually an internal bank form.

MatthewW4 (Arizona)
Posts: 500

Posted:

Quote:

Posted By BruceF1 on 06/22/2013 8:07 AM

Should you sign the form? That depends on how comfortable you feel. Surely, some officer of the association must be able to sign legal documents for the association. Someone has to be on the hook as a registered agent (the person to be served court papers). Let that person sign.

Bruce,

I am really disappointed in you for making that statement. A registered agent does not need to be a member, officer, or director, of an association (or other corporation). A registered agent's sole function is to receive process and other legal notices sent or delivered to the corporation. Appointment as a registered agent does not give that person any legal authority to sign on behalf of the corporation.

Did you know that a registered agent is not even required to be a real person? There are several large nation-wide corporations who do nothing except act as the registered agents for other corporations.

EllieD (Vermont)
Posts: 446

Posted:

MatthewW,

It looks like the Bank is trying to expedite, by using their form, and by not requiring that the actual FHA/HUD form be completed, so as to obtain the information needed to process the re-fi.

If I understand correctly, FHA/HUD requires that the information must be supplied directly by the “Association”, and under an “Association signature”, but perhaps I misunderstand.

Getting back to the question asked by Valerie, and the “Bank Form” that needed to be filled out, and which we are discussing - Valerie also posted that “We are detached single family homes; however, classified as site condos.” This link applies to “site Condos”

http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/2011/08/hudfha-site-condo-definition-and-reporting-requirements-ml-2011-22.html

And this link, found by “searching”, offers an easy to read explanation of “FHA Loan Requirements for Condominiums”

http://www.whdlaw.com/files/CondoLawResources/FHALoanRequirements.pdf

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Your right EllieD. It was a requirement for a board officer to fill out that form. They even preferred the president's signature if possible. I had to sign with my position along with my signature. Our secretary could have done it but we didn't exactly have one.

Seriously it's NOT that big of a deal. Any questions I could ask my accounting firm for. However, as President it is something I should have known already. Accounting firm or a MC is a paid contractor of the HOA there to assist. If you can't answer the questions on this form or have a resource available to answer them, then you really need to educate yourself.

The bank is NOT being lazy one bit. It's that the HOA is the resource to fill out this form. Would you say your doctor's receptionist is being lazy for not filling out those forms when you enter the office? No. Your the source of the information. Why not supply it to the best of your knowledge? You do NOT have to be 100% right. Just to your best knowledge.

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I reread the OP and the attachment.

The attached form is from the PNC Mortgage Company. It is not a government of any type form.

I would fill it out and sign it in a NY minute.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By MatthewW4 on 06/22/2013 6:32 PM
Yes, it is a lazy lender. Most of the information requested is public information available from either the county recorder, the county assessor, or the clerk of courts. Many of the other questions (such as commercial space) could be answered with a drive-by or in-person visit to the site.

Yes, some of the information is public information, and some might be obtained by visiting the site. However, if you read all of the questions carefully, some can only be answered by an individual who is personally closer to the situation. It would take a person representing the lender, who knows nothing about the condo community to begin with, several hours, if not days, to obtain that information, and it may not even be entirely accurate. Is the lender being lazy or just trying to save time and money? I could claim it is the person who knows, or should know, or could easily look up the information that is being lazy. As I said earlier, I completed the form for my community in less than 20 minutes, and it was the first time I had done one. If I had to do a second one it would take me probably half that time. So, who's being lazy? The person who is unwilling to take 10-20 minutes to fill out a form or the person who needs to spend hours, or possibly days, to obtain the information?

Also, as I said, if a community has a property manager, then this form should be completed by the PM. If the community does not have a PM, then somebody has to have volunteered to perform some of those functions, or a person or small form is being paid to do some of it. Unfortunately, with that comes the need to occasionally fill out form similar to the one asked for by PNC.

By the way, PNC's form appears to me to ask for a lot more detail than most of the ones I have seen from other lenders.

Quote:

Posted By MatthewW4 on 06/22/2013 6:32 PM
I notice that you did not address the other issue I raised: that the bank employee tried to obtain the information by fraudulently claiming that the association was required by law to fill out what is actually an internal bank form.

I saw no need to. If you go back and read the original post, nowhere is is it stated that the bank employee actually said the information was required by law or that the form was anything other than a bank form. The title of the thread is "New Federal Law?", but those are the words of the person starting this thread. They are not the words of the bank employee. All the bank employee said was that the information is required by Fannie Mae and Freddie Mac. If you do some research you will learn that over the past few years Fannie and Freddie have tightened their lending underwriting requirements with respect to condominiums and now require substantially more detail than they have in the past. Spot FHA approvals are out, and all blanket FHA approvals of projects were terminated. Projects desiring blanket FHA approval must now apply and re-apply every two years.

Probably because of the title of the thread and and the statement that Fannie and Freddie now require this information (which is a true statement; maybe not ALL of it, but much more than they used to in the past) some people who posted to this thread jumped to the conclusion that someone claimed this was a Federal form and not a bank form. As I said, read the original post. Nowhere is it claimed that the form is a Federal form or that the law requires it to be completed. If the form is not completed, and if the bank's underwriters cannot make the loan without the information requested on the form, then they deny the loan. Simple as that.

Quote:

Posted By MatthewW4 on 06/22/2013 6:46 PM
I am really disappointed in you for making that statement. A registered agent does not need to be a member, officer, or director, of an association (or other corporation). A registered agent's sole function is to receive process and other legal notices sent or delivered to the corporation. Appointment as a registered agent does not give that person any legal authority to sign on behalf of the corporation.

Did you know that a registered agent is not even required to be a real person? There are several large nation-wide corporations who do nothing except act as the registered agents for other corporations.

Really? No kidding?

You are making assumptions about what I might or might not know. I've been around a long time. I might just surprise you.
Yes, I do know what the function of a registered agent is.

1. Of course I know that a registered agent does not have to be a member, officer, or director of an association or any other organization.

2. Yes, I also know that there are companies, or corporations, whose only business is to serve as a registered agent for other organizations.

But, I also know that sometimes some other individual may be a registered agent. I've seen this before, too. The registered agent for our community was originally the developer (the person, not the company) himself. Bad idea. Our registered agent now is our management company.

It's not generally a good idea for an individual to be a registered agent. What if that individual is away, on vacation, or otherwise unavailable? If papers are served for that agent to appear in court on a specific date and the individual can't be there - not good. If the registered agent is a firm or company, then at least some representative from the firm should be available for the court appearance.

My point was that someone from the association has to have the authority to sign legal documents for the association. Usually that person is the president, but other officers might have the authority to sign other documents. I did not mean to imply that a registered agent could sign legal documents on behalf of the association. My point was that just as an association must have a registered agent, it must also have an individual who can sign legal documents on behalf of the association.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By BruceF1 on 06/23/2013 5:47 AM

Posted By MatthewW4 on 06/22/2013 6:32 PM
Yes, it is a lazy lender. Most of the information requested is public information available from either the county recorder, the county assessor, or the clerk of courts. Many of the other questions (such as commercial space) could be answered with a drive-by or in-person visit to the site.

Yes, some of the information is public information, and some might be obtained by visiting the site. However, if you read all of the questions carefully, some can only be answered by an individual who is personally closer to the situation. It would take a person representing the lender, who knows nothing about the condo community to begin with, several hours, if not days, to obtain that information, and it may not even be entirely accurate. Is the lender being lazy or just trying to save time and money? I could claim it is the person who knows, or should know, or could easily look up the information that is being lazy. As I said earlier, I completed the form for my community in less than 20 minutes, and it was the first time I had done one. If I had to do a second one it would take me probably half that time. So, who's being lazy? The person who is unwilling to take 10-20 minutes to fill out a form or the person who needs to spend hours, or possibly days, to obtain the information?

Also, as I said, if a community has a property manager, then this form should be completed by the PM. If the community does not have a PM, then somebody has to have volunteered to perform some of those functions, or a person or small form is being paid to do some of it. Unfortunately, with that comes the need to occasionally fill out form similar to the one asked for by PNC.

By the way, PNC's form appears to me to ask for a lot more detail than most of the ones I have seen from other lenders.

Quote:

Posted By MatthewW4 on 06/22/2013 6:32 PM
I notice that you did not address the other issue I raised: that the bank employee tried to obtain the information by fraudulently claiming that the association was required by law to fill out what is actually an internal bank form.

I saw no need to. If you go back and read the original post, nowhere is is it stated that the bank employee actually said the information was required by law or that the form was anything other than a bank form. The title of the thread is "New Federal Law?", but those are the words of the person starting this thread. They are not the words of the bank employee. All the bank employee said was that the information is required by Fannie Mae and Freddie Mac. If you do some research you will learn that over the past few years Fannie and Freddie have tightened their lending underwriting requirements with respect to condominiums and now require substantially more detail than they have in the past. Spot FHA approvals are out, and all blanket FHA approvals of projects were terminated. Projects desiring blanket FHA approval must now apply and re-apply every two years.

Probably because of the title of the thread and and the statement that Fannie and Freddie now require this information (which is a true statement; maybe not ALL of it, but much more than they used to in the past) some people who posted to this thread jumped to the conclusion that someone claimed this was a Federal form and not a bank form. As I said, read the original post. Nowhere is it claimed that the form is a Federal form or that the law requires it to be completed. If the form is not completed, and if the bank's underwriters cannot make the loan without the information requested on the form, then they deny the loan. Simple as that.

Quote:

Posted By MatthewW4 on 06/22/2013 6:46 PM
I am really disappointed in you for making that statement. A registered agent does not need to be a member, officer, or director, of an association (or other corporation). A registered agent's sole function is to receive process and other legal notices sent or delivered to the corporation. Appointment as a registered agent does not give that person any legal authority to sign on behalf of the corporation.

Did you know that a registered agent is not even required to be a real person? There are several large nation-wide corporations who do nothing except act as the registered agents for other corporations.

Really? No kidding?

You are making assumptions about what I might or might not know. I've been around a long time. I might just surprise you.
Yes, I do know what the function of a registered agent is.

1. Of course I know that a registered agent does not have to be a member, officer, or director of an association or any other organization.

2. Yes, I also know that there are companies, or corporations, whose only business is to serve as a registered agent for other organizations.

But, I also know that sometimes some other individual may be a registered agent. I've seen this before, too. The registered agent for our community was originally the developer (the person, not the company) himself. Bad idea. Our registered agent now is our management company.

It's not generally a good idea for an individual to be a registered agent. What if that individual is away, on vacation, or otherwise unavailable? If papers are served for that agent to appear in court on a specific date and the individual can't be there - not good. If the registered agent is a firm or company, then at least some representative from the firm should be available for the court appearance.

My point was that someone from the association has to have the authority to sign legal documents for the association. Usually that person is the president, but other officers might have the authority to sign other documents. I did not mean to imply that a registered agent could sign legal documents on behalf of the association. My point was that just as an association must have a registered agent, it must also have an individual who can sign legal documents on behalf of the association.

Bruce not sure what banking institutions you deal with in CT but in speaking with the woman who handles these forms at the MCs office she has told me some of the forms now are 6-8 pages. So perhaps even more complicated then this one form provided. My assumption every bamk or agency has their own form and might ask similar but not exactly the same questions.

My point long long ago was if possible the MC should be filling out these forms. In the real world THEY would have ALL the information on hand to fill his out as fully and completly as possible. So why bother attempoting to complete a form when another office can simply do it themselves without the need to make phone calls and gather information.

Now I have yet to hear how or why any Board President or Board member would be obligated or forced to fill out and sign such a form. And to suggest only they can sign for the HOA is simply not correct. IN 26 years no Board member has completed or sigend such a form here. So somehow someway its been possible for us to satisfy the banking requirements without a Board member involving themselves.

My concern would be many Board members would not have the knowledge or ability to fill out these forms. Based on the fact when most folks apply for a mortgage through a bank do THEY complete their own forms? Could they?

And as Board members you have now involved the HOA in the production of these documents.

"A good man has to realise his limitations." Dirty Harry.

And sometimes what you think you know is in fact a lot less than you ever thought.

And as to registered agents. Many have no real function other then o be a contact point for an organization or corporation with litte if any real authority to act alone on behalf of that entity.

Our MC acts in that capacity but they do not act in the name of the property without Board knowledge and approval.

And finally, over the years I have signed legal documents, contracts, liens, etc. but I did NOT prepare them. For me there is a huge difference. Our lawyer prepared the liens. Our lawyer drew up legal documents. Our MC handles contracts and agreements.

Filling out loan information for the sale of a private piece of property not directly involving the HOA IMO is no the duty, responsibility, or obligation of a Board member. Now they can make it so using the flawed justification they laone know best, or they have now some duty to see the sale of a home goes through, or perhaps their conclusion that this is all making a federal case out of nothing. In that case let THEM complete the form and sign.

As I mentioned I spoke with our MC. 25+ years managing properties. 1,000+ units under management. Heads the local chapter of CAI. Offers lectures and seminars to both Boards and other MCs.

His opinion in today's world you have to be very careful who fills out these forms, how they are filled out and the information you provide. Failure to do so can cause the person signing these forms serious problems. I take him at his word. He just might know more than I or others think we know.

DaveD3 (Michigan)
Posts: 796

Posted:

Personally, I would send them an electronic copy of the declarations and bylaws and ask them to contact me directly if they need any specific additional info. Most of what they "need" is in there.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

When I filled out the form it was required the President of the HOA do it or the Vice-President. They needed the representative of the HOA itself. MC's, lawyers, and whatever else you want to call someone are not. They are paid contractors of the HOA. A lawyer only needs to represent the HOA in court. Not in all legal documents.

For pity sake seriously people from a person who has filled out these type forms many times before a closing/refi it is NOT that big of a deal or federal case. Yes the information you provide needs to be accurate to the best of your knowledge. That's all.

The issue arises ONLY in these areas: If you lie about the number of rentals or legal matters. (I.e liens, foreclosure, lawsuits). It is okay if the HOA has numerous liens or is doing a foreclosure. It shows your trying to collect a debt. Lawsuits on the other hand just gives an idea of how much legal troubles are involved increasing the HOA risk. The amount of rentals or empty lots/homes increases the risk to home values. Which then is a risk to the banks to loan money.

That is where the rubber meets the road of all this. The other important issue is the fee simple part. Which I forgot what that meant. Otherwise everything else is just information one should already know about their HOA as a member or an officer.

Former HOA President

GlenL (Ohio)
Posts: 5,491

Posted:

Ladies and Gentlemen,

See the dead horse,

See the posters flog it,

See it move - NOT

Jon, I agree with you that IF you have a MC, the MC should fill the form out but not all HOA's have MC's nor can they run to the attorney for every little loan form. Fill the form out, don't fill the form out, give it to another Board member to do. At the end of the day, the only ones affected by your decision will be the homeowners trying to refinance. Oh yeah, homeowners aren't they the ones the Board is supposed to serve?

Bruce, thanks for the common sense approach. I'm sure as a tax preparer you don't just sign your name to anything stuck in front of you.

Melissa, as much as it pains me to agree with you, the form is no big deal, fill it out make a copy and you'll have most of the information set for any future ones, just update the information that changes.

Matt, I know you live in Arizona but most of us don't see the black helicopters, not everything is a conspiracy.

Studies show that 5 out of 4 people have problems with fractions

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Jon,

Rather than use the quote feature and repeat everything, let me try to respond to some of the points you raised.

I have no argument with the many points you raised. You raise some very valid points and concerns. I would not doubt that similar forms from other lenders may be several more pages that the PNC form in the OP. I've seen shorter ones, too. If I remember correctly, the form my bank requested to be completed for my re-fi a year ago was only one page, or maybe two. I simply handed it to our property manager because I believe, as you do, that it's their job to complete and they are likely the most knowledgeable when it comes to supplying the requested information. Furthermore, the PM has likely completed similar forms for other lenders and other associations several times.

No, I don't believe that any association officer or board member should be obligated or forced to complete any form. You stated that too many board members may not have the knowledge or ability to fill out such a form. While I believe that a board member should know the information requested (at least, considering the PNC form) my experience, like yours, has shown that's not reality.

I would guess that most associations of any size would be professionally managed. So, I think we agree the PM is the person who should complete the form. But, what about smaller associations that are self-managed? Who completes the form? You suggested the association's lawyer. What if they don't have a regular lawyer either?

You made a statement: "A good man has to realize his limitations." I'll give you a similar one: "He who knows not and knows he knows not is a wise man. He who knows not and knows not he knows not is a fool." I'm not sure where that came from, or if I've stated it correctly, but I think we're on the same wavelength.

If Valerie feels uncomfortable completing the form, believes it will take too much time, or is uncomfortable signing it, then she shouldn't. Neither should she feel she is obligated or "has a duty" to fill out the form because the homeowner may not get the loan is she doesn't. The homeowner may not get the loan even if she does! That's none of her concern.

The difficulty I have is that Valerie states that she has filled out similar, apparently shorter, forms in the past that took only 15 minutes or so. Somehow she feels overwhelmed by this form and that it will take considerably longer and will require more work and time. Perhaps that is very true. After all, I don't know anything about her association. However, I was able to complete the form for my community in about 20 minutes (not much longer than 15 minutes). Granted, I have the advantage that our community consists of only 88 homes, and we are completely built so a considerable amount of information will never change and the next similar form will require even less time since I won't have to look up as much. I also know most everyone in the community, and I know whether there are any investor-owned or rental units (none), commercial use (none), and whether the homes are the primary or secondary residence of the homeowners (all primary). I know how many homes are for sale and how many have been sold but not closed and when it (there is only one) is due to close.

But, Valerie seemed to indicate in her OP that she would be willing to complete the form if the association was compensated for the time. Not an unreasonable request.

I understand what a registered agent does. I also understand and agree that the board makes the decisions; not any one officer, not the PM, not the registered agent. They act only with the knowledge and the authority of the board.

My opinions may be different, but they are not uninformed. I have had several conversations with friends who are experienced in the field; one who is a lawyer who has experience in real estate and HOA law, one who is an assistant vice-president and branch manager for a bank, one who is a loan officer for a different bank, and of course, our property manager whom I am in contact with on at least a weekly basis. I am also a member of CAI (as are all our board members) and I make it a point to try to keep informed.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By GlenL on 06/23/2013 10:44 AM

See the dead horse,

See the posters flog it,

See it move - NOT

Agreed.

I believe I said it earlier. I think we've all spent more time discussing the merits of filling out, or not filling, out this form that it would take to fill it out in the first place.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Valerie,

Is it normal, Yes.

We actually provide a statement for free that answers the questions required by HUD.
If the Bank wants the information on their form, we charge $25 per form.

One bank insisted on using their form and paid us the money (check issued from closing). Therefore, I simply copied the information from our form to theirs and e-mailed it to them. It took less than 10 min.

TimB4 (Tennessee)
Posts: 21,059

Posted:

BTW, I saw the dead horse but couldn't resist poking it to see if it was really dead

DwightT (Idaho)
Posts: 664

Posted:

This has been a fascinating thread. Yes, Fannie/Freddie are now being stricter in their reporting requirements, with potential fines/jail for knowingly providing false information. They provide a form that must be filled out ..... by a bank officer. Because the banks were so loose in how they handled the loans during the boom/bust years, the feds have tightened things down in order to hold the banks more accountable. So the banks now have to collect this information in order to fill out the federal form.

The original form posted was indeed a bank form, and not the federal one. The bank is using their form in order to collect the information that they will need to fill out the federal form. They want to use their form (and not just a blanket statement from the HOA) so that if there is an audit, they will be able to go to the same place on every loan to find out where they got their info from. They ask that somebody sign their form so that they can contact that person if there are any questions, but at least with the couple of bank officers that I have talked to they would be happy with the info even if the form isn't signed.

The form is just the bank's way of doing their due-diligence.

ValerieS2 (Michigan)
Posts: 244

Posted:

Thank you everyone for the responses.

Melissa, as you often do, you jumped to a premature and inaccurate conclusion in implying that I was "holding up a sale".

JohnD1 the advice you have given has been echoed by what our association attorney stated over the phone this morning, thanks for the response.

Tim I like the idea of a generic form with everything required by HUD - do you happen to have an example of those requirements?

To the person complaining about a dead horse continuing to be beat: scram. No one is forcing you to view the beating and I am still asking for help.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By ValerieS2 on 06/24/2013 11:58 AM
Thank you everyone for the responses.

Melissa, as you often do, you jumped to a premature and inaccurate conclusion in implying that I was "holding up a sale".

JohnD1 the advice you have given has been echoed by what our association attorney stated over the phone this morning, thanks for the response.

Tim I like the idea of a generic form with everything required by HUD - do you happen to have an example of those requirements?

To the person complaining about a dead horse continuing to be beat: scram. No one is forcing you to view the beating and I am still asking for help.

Valerie:

Sometimes it is not necessary to re-invent the wheel. Many issues that come to this site have been dealt with by some of us before. My motivation in coming here is to share what I might have picked up along the way during my 26 years of Board service. Even an idiot would have gained some knowledge along the way. I am far from that.

So it sounds like your attorney just might know what they are talking about. Since you are paying for their time perahps you should heed their advice. Sometimes even lawyers get it right.

My concern with this issue it that a volunteer might be putting themselves into a position that might become problematic for both them and the property. If a project goes into bankruptcy, default, or a loan goes into foreclosure the bank or mortgage holder might look back at all the documents pertaining to that transaction. Myself I don't want my name anywhere on that paperwork. And just how would you go back say 3 years or 5 years and recreate the information you relied on when you filled out these forms?

One series of questions related to pending litigation. Do I want a Board member explaing what the legal issues are in a court case to a bank? Worst case scenario my guess not many Board members could correctly predict what might happen in the legal system with any certainly.

Hence my suggestion the MC or if not an MC a lawyer. No cost to the HOA.
No risk to the HOA. No risk to the Board member. Over and out!

If you were dealing with a mortgage broker no telling how manny copies of this document might be submitted and circulated all with your signature. And if you handle a few sales each year there will be quite a few copies of your name on bank loan paperwork. Just what good can come of that?

IMO this is not the Board's duty or obligation. To suggest so is IMO nonsense. I don't have a problem calling out nonsesne when I see it.
Might just save someone a problem.

What bothers me most is when you have people who come here and abased on one property, in one state they determine THAT is the way this should be handled each and every time. In many cases because that is the way they handled it. And to diminish the conerns of others by suggesting they are making a federal case out of it well $1,000,000 fines and jail time that would peek my interest in staying far far away. And when questioned they justify their opinions simply because that is the way THEY see things. Might have to consider the possibility that what they think they know is not as much as they do in fact know.

You might just be giving bad information. Myself I would rather remain quiet than express an opinion based on little.

So Valerie if my opinions helped you in any way then this is a good thing. Board service is not supposed to come with a price. You can do your job and still protect yourself. And life rule # 2735 ONLY YOU DECIDE WHAT IT IS YOU HAVE TO DO NO ONE ELSE. Along the way I have learned there really is LITTLE I have to do. I choose if and when I decide to do anything. As I get older I have learned to say NO more easily and more frequently.

Good luck.........

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By ValerieS2 on 06/24/2013 11:58 AM

Tim I like the idea of a generic form with everything required by HUD - do you happen to have an example of those requirements?

I'll attach what we use. However, condominiums would likely have additional questions (I only researched PUDs)
You can do an internet search for Association PUD statements and see what others provide.

NOTE: We include assessment amounts and the Lot's ledger balance via e-mail.
This kept the form generic enough that we only update it twice a year.

Hope this helps,

Tim

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