For those who are buying condos

My most recent transaction is a condo that looked just like a detached single family home, but it was built as a condo by the developer, and has a condo designation in the tax record.

You probably know condos need an HOA cert for the loan (that includes information such as owner occupancy ratio and HOA due delinquency ratio) and your interest rate will be 1/8 or so higher than a single family home that does not have a condo designation. What you probably didn’t know is about two weeks ago, the lending rules have changed (at least for Wells Fargo), and now each lender (think bank) has to warrant its own loan. With this change banks are doing all sorts of investigations into the well-being of the HOA and are much stricter on some requirements, such as if the reserves are low.

While this is actually a good thing for the buyer (it protects the buyer from unexpected special assessments), it can SERIOUSLY delay the progress of the loan because the progress relies upon how quickly the management companies get back to the lender. This delay is probably not an issue if you have a traditional equity sale transaction (and if you have an understanding seller), it might become a huge issue if you are buying a short sale or bank owned property, especially if the bank threatens to charge you a per diem fee for closing beyond the original contract date. Not to mention also that there is a cost associated with this new condo questionnaire, and many lender are passing it onto the buyers (in my case the lender paid for it, but they won’t be doing this forever).

You might be a solid buyer with 20% down buying an owner occupied home; you still need to be aware of this potential issue. For my buyer, unfortunately, this change started in the middle of the escrow and we had no way of preparing for it. Talk to your lender upfront so you don’t get caught off guard.

Popcorn ceiling texture disposal in San Diego.

If you are a homeowner of an older home with popcorn ceiling like us, and if you'd like to remove them by yourself, I hope the following information is helpful for you.

First you need to get the popcorn texture tested to see if it contains asbestos. Although the general rule is if your house was built after 1978, it should not contain asbestos. But if your house was built around that time, it's safer to get it tested for the peace of mind. You can google a testing labs.

Our results came back positive. With that, you can only hire a licensed asbestos abatement company or you can remove it yourself. We decided to do it ourselves.

You can google how to properly remove the popcorn ceiling texture. There are websites and videos show you how to do that. What I want to talk about is how to properly dispose the popcorn material. It turns out that's harder than the job itself.

I called the San Diego Environmental Services before we started the project, and I was told to take it to the landfill on a Saturday with an appointment. The next time when we were done, I called to make an appointment and was told they do not take materials with asbestos in them. I was given a name of a company that should be able to dispose it for us. I called that company and was given the Environmental Services number in return.

It turns out you need to call a registered hazardous waste hauler/transporter. For a complete list of these companies, go to the California Department of Toxic Substances Control. As part of the disposal you will need to obtain a temporary EPA ID number from the State of California, and the company you choose to hire can help you obtain the number.

We contacted two companies. One told us to transport the waste to a Chula Vista facility. The other would send in someone to re-double-bag our waste in our driveway, and haul it away. We chose the latter for the same price. The gentleman packaged the bags (which we double bagged) with another layer of bag/plastic sheet and warning labels.

As I am writing right now, our popcorn ceiling is being transported to somewhere in Arizona. Once it safely arrives, we will receive a receipt in the mail that it reaches the destination.

It took us almost 2 weeks trying to figure out how to be a responsible citizen. Many times within this time we wanted to put them in the trash due to frustration. I hope this bit of information will save anyone who wants to remove popcorn ceiling themselves in the future from disposal frustration, and help keep the environment clean.

Re-finance and foreclosure protection.

California has protected homeowners from deficiency liability from their home mortgage since the 1930s, but this protection only applies to "purchase money" loans (ie. the loan one took out when he/she bought the hosue).

When the homeonwers re-financed to take advantage of lower interest rates in recent years, for examples, they lost the legal protections and may be personally liable for the difference between the value of foreclosed property and the amount owed to the lender.

Under current law, the lenders have up to ten years to collect this deficiency liability, which could means the family could potentially be paying the debt even years after they lost their home.