Downtown Los Angeles Unwarrantable Condos and Loft Loans and Lenders

Alta Lofts recently entered into the settlement phase of litigation as the builder developer agreed to reimburse the HOA for construction defects.

Lawsuits and unwarrantable condo loans

Litigation is but one of many issues that can affect a buyer’s ability to get a home loan. Most lofts have issues that buyers want to know about before going to see the property for sale. They often need a loft lender for successful mortgage financing. Sometimes they require an unwarrantable condo lender or litigation specialist lender.  #lawsuits #unwarrantable #lenders

One of the biggest disasters in Downtown Los Angeles real estate that can be prevented has to do with home purchase mortgage financing. More than half of the homes for sale in downtown LA are industrial or commercial loft conversions using the city of Los Angeles Adaptive Reuse Ordinance.  These conversions are still listed in the records as commercial buildings. When buyers use a residential lender, especially a discount home loan company, the lender generally has little knowledge or experience with lofts.  The friendly mortgage broker says “Yeah sure I’ll hook you up no problem”. But, he does this without checking on the building type first. The major problem happens weeks later when the home is in escrow and the underwriter finally checks and sees that the building is listed as an industrial or commercial type, and it has unusual issues such as no floor, and the lender has not given them an HOA questionnaire previously. The buildings are often mixed-use with some units allocated specifically for commercial purposes.  The disaster happens when the lender eventually says, at the end of the escrow period, that they will not finance the building, or there will be a lengthy delay or significant extra expenses such as higher mortgage interest rate, higher fees or per diem fees to reimburse the seller for waiting on the delayed escrow.  The property often falls out of escrow at this point, and the buyer and seller must both start over.  This problem happens all the time unfortunately, especially when both the buyer and seller use out of area agents and out of area lenders who are not familiar with the special needs of loft real estate transactions.  By using a loft specialist lender from the onset, this problem could have been prevented.

Other buildings have many renters or other more serious issues that nearly all lenders will find unacceptable.  These are buildings that home loan companies, banks and even loft lenders will not loan on. They are called unwarrantable condominiums.  Fortunately, there are some lenders that specialize in non-warrantable condos.  These are direct lenders for condos with the most difficult of problems, often HOA litigation and lawsuits involving the home owners association.  A litigation lender or unwarrantable condo lender can do 30-year fixed loans up to $2,000,000 for purchase or refinance with cash out.  They can lend on: projects where one entity owns more than 10% of entire project, such as SB Grand lofts; mixed use complexes with up to 80% commercial/retail; high HOA delinquency rate and/or budget issues; new developments with no minimum pre-sold; complexes with high percentage of renters; condo-tels condominium hotels on a case-by-case basis. Originators of non-warrantable condominium loans have excellent, reliable results, and will usually need to charge a bit more interest and fees to cover the added risk that they incur in dealing with these buildings.

Get a free list of loft and condo buildings with litigation or lawsuits. Fill out the online form:

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SB Grand 312 W. 5th St. unwarrantable condo

Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com  Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

Downtown Los Angeles Loft and Condo Questions – Ask Corey

Lawsuits, Litigation – Downtown Lofts and Condos

1100 Wilshire Chase building
1100 Wilshire Chase building

There are many issues about Downtown L.A. lofts and condos that are hard to look up online.  One of these issues is litigation and lawsuits.   Here’s a question that we received this week:

Dear Corey,

Can you tell me anything about lawsuits at 1100 Wilshire?

Thank you for your request. I think I remember someone else asked a similar questions recently, so I’ll put a link to that one.  Litigation has been reported by listings agent on these dates:  05-23-2017, 11-25-2017 and 05-08-2017. Sometimes the homeowner’s association can provide details. The HOA phone: number for 1100 Wilshire Bl 90017 is 213-977-8880.

It’s one of my favorite buildings, and one of the most respected buildings in Downtown Los Angeles, but it seems that building has had more than its share of litigation.  It’s often hard to find out exactly what is going on with lawsuits at any given time because some try to keep the under wraps.  Here’s what we’ve heard about issues in the building that might be relevant:  years ago we heard someone got her finger hurt in the elevator door. This is easy to believe because the elevator doors in this building seem to close faster than other elevators. Now a modern loft residential building, 1100 Wilshire was originally a commercial office building high-rise. The elevators were built to zoom large numbers of people up 30 floors rapidly so they can get to their busy offices.  The benefit is the elevators are a little bit faster than most residential elevators, but the drawbacks are that the elevator doors close faster so you need to be careful to run into the elevator more quickly and keep your hands away from the elevator doors.  Perhaps even more importantly keep your pets away from the elevator doors and also make sure the door does not close on the leash.

More recently, we heard that the HOA reserves might actually be depleted somewhat due to too much litigation. We don’t know if that is true or not.

We are told a building is being possibly constructed across the street on the south side. The tall building could potentially he block some sunlight to the south facing units. This could potential he affect the swimming pool deck on the 17th floor.

Another issue that has bothered me personally is Chase Bank somewhat took over the building, putting their name on the top of the building, and sharing the lobby. I have noticed a little more wear and tear on the lobby and nearby areas. The worst thing has been giving control of the parking over to Chase.  While we could once get free parking easily 24 hours a day with validations from the front desk, we now can only get a tiny discount on the parking from Chase bank during banking hours only.

Most lawsuits in Downtown LA involve the homeowners association suing the developer for construction defects. Not sure if one of the lawsuits is related to that common situation.

Prospective homebuyers receive usually a lot of homeowners association documents when they are in escrow. These usually mention any ongoing lawsuits and litigation and will sometimes provide details.  The issues mentioned in this post help provide a general background of what we have seen or what we have heard about.  Some of these issues may not be an issue today. We’ve also been yelled at and told that we were wrong about issues we had mentioned before in this building. We don’t have access to the very latest documentation regarding litigation and lawsuits. Prospective home buyers and attorneys are responsible for checking out the details, and home sellers are required to disclose all known facts that may affect the value of the property.

With its many luxury amenities and modern style with extremely high overall quality, 1100 Wilshire remains one of the most sought after buildings in downtown Los Angeles.  Here is the link to more information about 1100 Wilshire and a link to more information about downtown loft lawsuits and litigation.

Get a free report on litigation and lawsuits in downtown Los Angeles. Fill out the online form:

LOFT & CONDO LISTINGS DOWNTOWN LA [MAP]

  Lofts For Sale     Map Homes For Sale Los Angeles

SEARCH LOFTS FOR SALE Affordable | PopularLuxury
Browse by   Building   |   Neighborhood   |   Size   |   Bedrooms   |   Pets   |   Parking

1100 Wilshire Los Angeles
1100 Wilshire Los Angeles

Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com  Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.