05 March 2011

Mark Puente's Inaccurate St. Petersburg Times Stories

Lately I have been following some of Mark Puente's stories in the St. Petersburg Times searching for inaccuracies in his articles. After all, the St. Petersburg Times is well known for keeping the housing and mortgage crisis alive and well through the use of injecting fear and worry in the public as far as the housing crisis is concerned.

I have sampled two articles of Mark Puente's lately. My opinion: These articles convey nothing more than fear in the public. After all, the St. Petersburg Times has to do something to sell more newspapers, now that street hawkers selling the Sunday edition of the St. Petersburg Times have been banned in St. Petersburg. A victory for living here in St. Petersburg!

Let's sample two of Mark Puente's articles on the housing and mortgage crisis.

The first article is just recent, and it has to do with cash being king when it comes to buying a home. Traditionally, unless you are very rich you saved up the down payment for a mortgage, usually 20%. You walked into the bank, filled out the paperwork, plunk down the application fees and - depending on your credit - you got that mortgage and you can go home shopping!

In this day and age the mortgage lending standards have changed. It is still possible to find a mortgage but the playing field has changed somehow. I have noticed more and more people having to go the Federal Housing Administration (FHA) mortgage route because of difficulties with past credit that may keep them from getting a conventional mortgage.

Here's a quote from this Mark Puente article:

"Even in a market saturated with lower-priced homes, many purchasers, like first-time buyers, cannot get financing. Lenders are even turning away people with decent credit and down payments. So if they want the house, they have to pay cash. If they can't, that leaves more homes for investors to bid on."

That statement by Mark Puente is very inaccurate. It is still possible to get that mortgage for the home you want, just make sure that the price and payment are within your means. On the other hand, Mark Puente does not mention why banks don't want to lend to people with good credit: The banks received federal bailout money in the hope of loosening the credit market; instead, the banks act stubborn and hoard that money while at the same time treat their customers like second class citizens.

If you're out there trying to get a mortgage and you are running into difficulty despite your good credit, don't give up. There are organizations out there that can help you find the mortgage you need for the home you want. Moreover, if you belong to a credit union ask to see if mortgages are offered and see if your credit union can pre-qualify you. After all, it doesn't hurt to ask. It's like finding a needle in the haystack - only this time you have you have to dig deeper in the haystack.

Now to another article of Mark Puente's, and this is for you if you live in a condominium complex.

I am going to share with you part of an email I sent to Mark Puente the day the article was published in the St. Petersburg Times (the email is edited as I redacted some semi-personal information for the purposes of this blog entry):

I read your article in this morning's St. Petersburg Times with a lot of interest. Unfortunately, there are some major facets of your article which I believe are inaccurate.

I happen to be on the Board of Directors of a condominium association and I have been on the Board for many years. Condominiums are regulated in the State of Florida pursuant to Chapter 718 of the Florida Statutes which deals with condominiums and the activities of condominium associations are regulated pursuant to Chapter 718, specifically Sections 718.301 to 718.303. On the other hand, a homeowners association is governed by Chapter 720 and, unfortunately, not subject to the regulation of activities compared to Chapter 718.

In 2010 the Florida Legislature passed two laws related to condomimiums in regard to unit owners that do not pay their monthly maintenance fees as required. One law is in regard to units that are rented out by a unit owner and the unit owner does not pay the monthly maintenance fees; the new law allows condominiums to collect the rent from the renter to pay the monthly maintenance fees. The other law allows condominiums to deny access to certain common areas such as the swimming pool and the clubhouse to unit owners who are seriously delinquent in their monthly maintenance fees (usually 90 days or more).

Mr. Puente, you should also know that if a unit in a condominium is mortgaged and that it is brought to the mortgagor's attention that the condominium monthly maintenance fees are not being paid, the mortgagor has the right to pay these fees owed to the condominium association in order to protect the mortgagor's interest.

Hopefully the above should set the record straight as to foreclosures being done by condominium associations.

After all, condominium associations are regulated by Florida Statutes compared to little regulation of homeowners associations, such as the northwest Hillsborough County community of Westchase. In July 2010 two laws were implemented in Florida as to 1) the collection of rent from unit owners who rent their units and the unit owners are delinquent in association payments, and 2) the denial of the right to use the common facilities such as the pool and clubhouse for unit owners that are more than 90 days delinquent.

If a condominium unit is mortgaged like in a first mortgage, upon receiving word that the monthly maintenance fees and special assessments are behind then the mortgagor can go in and pay the back fees and at the same time add the back fees to the amount owed. This is nine times out of ten necessary to protect the mortgagor's interest. Remember the note you signed at the closing table?

When a unit owner jumps ship on a condominimum unit due to difficulty in paying the association monthly maintenance fees and special assessments, the association will step in after so many months and place a lien on the unit and foreclose on the lien. Unfortunately, if the unit is mortgaged the mortgage holder's mortgage is superior to the condominium association's lien; the association can rent out the unit to help collect back association fees in the interim but the association's lien is extinguished when the court orders the judicial sale of the unit as part of the mortgage foreclosure proceedings to satisfy the mortgagor's interest. As in any court proceeding, things go slow.

Again, Mark Puente's article on homeowners associations as I just mentioned I believe is inaccurate. Based on my past experience, I am trying to set the record straight.

OK. My overall opinion of Mark Puente and his articles in the St. Petersburg Times to date: Inaccurate and misleading, at times placing the public in fear. Again, if you are out there trying to get a mortgage in order to buy a home, don't fret - there are lenders out there that should be able to help you.

By the way, if you are trying to get a mortgage and despite your good credit the bank acts stubborn and denies your mortgage loan application, I want to hear from you. Please, do not include personal identifying information in your comment but the name of the bank you applied to is OK.

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