What do underlying building mortgages and the recent changes in lending programs have in common?

Answer everything.

True story.

A nearby coop has an underlying mortgage total of $ 50,000 average per apartment.

A buyer wished to buy a $200,000 apartment with 20% down ($40,000) and an 80% ($160,000) mortgage.

The bank looked at the $50,000 underlying mortgage per apartment and computed ($50,000 + $200,000) as the base amount for risk assessment and told the buyer the only way to obtain a mortgage is to put down 80% of $250,000 or $50,000 down for a lending mortgage principal of $150,000.

Real reality check for buyers, for boards and for sellers. No doubt it is worse for a co-op does not have a retirement program for the underlying accumulation of first, second and in some cases third mortgages. Balloon payment mortgages can be a death knell; for buyers and sellers.