WHile our Co-op only requires 10%, I believe the new mortgage rules are closer to 20%

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I need to restate my last post. Our co-op has recently seen some 10% down mortgages with PMI. The problem with raising the bar to 20% is that you decrease the pool of buyers. Remember, if the buyer goes under, the co-op still has primary lien and can recoup the missing maintenance and legal fees. Assuming the co-op has a policy of sending late payers into the legal process fairly soon after the late event occurs (60-90 days, for example), your considerations should only be timing of when the maintenance is received and not whether the maintenance is received. Your reserves should cover the timing too.

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we changed from 10 to 15% a couple years ago, maybe 8 years or more.
It was abot 6 months before the housing mess started coming out. They wanted to go to 20% we went to 15%, however i beleibe tey became more stringent on buyers money in the bank and their finances in reserve if they lost their job, ie 1 year of maintenance in reserve.
i didn't realize how messed up the mortgages were, when i got my mortgage in 1983, it was pretty strict as far as income and amount borrowed . with the way they were throwing mortgages around i could have bought a i million dollar property for the same money. it was insane.
i see the other post below states PMI, i thought PMI was necessary if you put down under 20%, it was when i bought. i could not believe that it wasn't required anymore under 20%. idiots

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I push for a 20% rule in my buildings because if (God forbid) we were to have a stronger housing slump, and property values drop by 10 and 15%, the coop would have no leverage against someone who is financed at 90% and possibly now upside down on thier loan... they may even walk away from the liability if they get in trouble.

~AR

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