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THE SUNDAY SANTAN SUN NEWS | FEBRUARY 27, 2022
Legislature moving to protect condo owners This, right here, takes existing housing, where “ people are living in it for sometimes a modest amount
BY HOWARD FISCHER Capitol Media Services
Led by a Chandler legislator, state lawmakers are moving to ensure that if you like your condo you can keep your condo. Without debate, the House recently voted to repeal laws that allow any investor who acquires 80% of the units in any condominium to then force the owners of the other 20% to sell. HB 2275 now requires a final roll-call vote before going to the Senate. At issue are longstanding laws that deal with the formation of condos. These are real estate development where areas are designated for individual ownership, with the balance considered common ownership. Those laws also set up procedures to dissolve condo agreements, including saying that can be done with the consent of at least 80% of the owners. There are provisions for appraisals of the units of those who do not want to sell as well as relocation costs. But Rep. Jeff Weninger, R-Chandler, said that still isn’t fair.
of money, and in a market that is going straight up, allows a developer, not from this state, from Chicago, from other places, to come into this state, and force these people to sell them their condos.
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– Rep. Jeff Weninger
What happens, he said, is developers come in, make offers that 80% of owners are willing to accept, and then find themselves in a position of being to force out everyone else. “I just think it’s a practice that should be eliminated completely,’’ Weninger said. And he said that anyone who cares about the lack of affordable housing would want to repeal what is now on the books. “This, right here, takes existing housing, where people are living in it for sometimes a modest amount of money, and in
a market that is going straight up, allows a developer, not from this state, from Chicago, from other places, to come into this state, and force these people to sell them their condos,’’ Weninger said. “And what do they do right away?’’ he continued. “They double the price.’’ The measure drew support from Rep. Jennifer Longdon, D-Phoenix. “When you buy a home, a condo, it’s yours,’’ she said. “It should be yours for as long as you choose to live there,’’ Longdon said.
“The idea that someone can see a bigger profit and come in and take it from you is ridiculous.’’ She said there have been real victims. “A woman with a significant disability bought her condo specifically because it was close to what was important to her,’’ Longdon said, things like shopping, transportation and her doctor. What happened, she said, is the value of the condo rose and a developer got the owners of other units to sell. “They tried to force her out,’’ Longdon said, offering her a lot less than she would have needed to take care of herself and her adult son. The only thing that saved her, she said, was negative publicity that forced the developer to back off. But Longdon said that this woman’s victory in this one case isn’t a real solution to the problem. “We shouldn’t be forcing people into poverty because a developer has found more profit in their unit than they do,’’ she said.
Crypto currency a challenge for mortgage lenders BY MARK SANDISON Guest Writer
With the rise in popularity of cryptocurrency investing and trading, many people have a significant portion of their wealth held in a cryptocurrency. While cryptocurrency presents exciting opportunities for investors to take advantage of a new technology and diversify their portfolio, this technology is so new that traditional financial institutions are mostly uncertain how to deal with these assets. Consequently, if you are wanting to apply for a mortgage and have a significant amount of your wealth held in cryptocurrencies or receive a significant portion of your income in the form of cryptocurrencies, qualifying for a mortgage can quickly become a tricky endeavor. The most common questions that people often ask who hold cryptocurrency and want to apply for a mortgage are: Can I pay my mortgage with crypto? Does crypto count as income? Can cryptocurrencies be counted in asset calculations as a basis for repayment obligations? While every lender can set their own guidelines, given the novelty of cryptocurrency and uncertainty of financial regulations surrounding cryptocurrency, so far virtually all major lenders will not accept cryptocurrency as a form of payment or consider it for mortgage qualification calculations. Fortunately, though, if you have a significant amount of your wealth or income in the form of cryptocurrency,
there are strategies that you can employ to use crypto wealth or income to help you qualify for a mortgage. Freddie Mac, one of the largest mortgage lenders in the US, recently released guidelines on how it will deal with cryptocurrency assets. The main points were: Income paid to the borrower in cryptocurrency may not be used to qualify for the mortgage; For income types that require evidence of sufficient remaining assets to establish likely continuance (e.g., retirement account distributions, trust income and dividend and interest income, etc.), those assets may not be in the form of cryptocurrency; Cryptocurrency may not be included in the calculation of assets as a basis for repayment of obligations; Monthly payments on debts secured by cryptocurrency must be included in the borrower’s debt payment-to-income ratio and are not subject to the Guide provisions regarding installment debts secured by financial assets; Cryptocurrency must be exchanged for U.S. dollars if it will be needed for the mortgage transaction (i.e., any funds required to be paid by the borrower and borrower reserves). United Wholesale Mortgage, the second largest lender in the U.S., recently decided against moving forward with its plan to accept Bitcoin as payment for mortgages. United Wholesale Mortgage said not only would they incur additional costs by accepting Bitcoin as a form of payment, but the regulatory uncertainties surrounding cryptocurrency and the lack of demand of customers wanting to pay in Bitcoin caused them to scrap the project.
Because of its constantly changing valuation, lenders are hesitant to consider crypto income when calculating your income. Additionally, unlike other securities such as stocks, lenders will not consider the valuation of your crypto holdings when determining your basis for repayment obligations, because of the volatile changes in valuation There is good news, though, if you store a significant amount of your wealth or receive a significant portion of your income in crypto. Fortunately, you can use your crypto wealth to help you qualify for a mortgage. The main reason that lenders don’t look at crypto is because it’s hard for them to gauge what it will be worth in the future. Because of this, you will
need to convert your crypto to cash in order to apply it towards mortgage qualification calculations. If you are primarily paid in crypto, this means you will likely need to regularly convert a certain amount into cash to satisfy the income requirements for the loan. If you are thinking about applying for a mortgage and hold a substantial amount of your wealth in cryptocurrencies and/or receive a substantial amount of your income in cryptocurrency, our real estate experts can help you qualify for the mortgage. Mark Sandison is with MacQueen & Gottlieb, one of Arizona’s top real estate law firms. They can be reached at 602-562-7218.
Ocotillo splendor
This 5m479-square-foot house in Ocotillo recently sold for $1.8 million. The four-bedroom, 3 ½-bath, two-story home was built in 2003 and includes a private guest wing with two additional bedrooms. It also boasted a number of upgrades in addition to a four-car garage, including hand-scraped wood floors, a spacious basement with custom-built entertainment area and a large “resort-like” backyard. (Special to SanTan Sun News)
