With the coronavirus / COVID-19 pandemic hampering so much daily economic activity, the country could be on the verge of recession as governments and financial institutions attempt to control not only the spread of the disease itself, but its long range economic impact too.
Among those who monitor the markets and try to move transactions forward while protecting themselves against infection are buyers, sellers, brokers, banks, appraisers and other parties crucial to mortgage processing. for cooperatives and condos. They all navigate a deeply altered landscape without much roadmap.
The front line
Jonathan Miller, president of Miller Samuel, a leading national real estate appraisal company based in New York, says his team recognized the problem early on. “Several weeks ago, as word of the virus spread,” he says, “we asked our office staff to work from home as they saw fit. Now we have a policy that when we receive a valuation order from a customer “- usually a bank”, “we call the owner of the property in question, and if the owner agrees, we do a review. inspection with appropriate precautions “. These precautions include of course a mask, gloves and hand sanitizer. “Over time,” says Miller, “it has become evident to lenders and to us that sellers are at least as concerned about contamination as we are. “
Miller goes on to say that he has suggested to lenders and other clients that his company could perform drive-thru or off-the-road inspections on a contingent basis, with internal inspections due at a later date. So far, however, lenders have been lukewarm about the idea, possibly due to legal requirements surrounding the inspection process.
Precautions aside, Miller candidly points out that given the growing severity of the crisis, asking an assessor (or anyone, for that matter) to come into close contact with other people in spaces. unsupervised puts the assessor, the unit owner and anyone doing a site inspection for any reason. Doing so to perhaps save money on monthly mortgage payments is not without ethical implications.
Lenders’ concerns and action
Mary Alex Blanton, senior vice president of the National Cooperative Bank (NCB) in New York City, said, “We continue to process and close transactions, but things change on a daily basis. NCB has a solid business continuity plan for all eventualities. According to Blanton, they continue to make fences on individual shareholder mortgages, but remotely… by email… with electronic signatures.
Blanton says his firm is awaiting advice on regulatory guidelines for assessments and inspections of all types. They are also considering mortgage relief for existing borrowers on a case-by-case basis. Blanton points out that things change every day and she expects NCB to be very actively engaged in dealing with the financial ramifications of the crisis for co-ops and condominiums.
From the legal world
Mark Hakim, legal advisor at Manhattan-based law firm Schwartz Sladkus Reich Greenberg Atlas, describes the bottleneck lawyers face as the crisis worsens: “Existing commercial and residential loans and transactional agreements [were] pushing at the proverbial light speed to close before closing in New York, when staff were available. New or unsigned pending deals, including non-essential construction projects that were underway that looked secure a week ago, are being delayed or canceled while everyone reflects on where they will be personally and where the industry will be. maybe. Existing agreements are indefinitely delayed or renegotiated while everyone absorbs the information and tries to assess the possibilities of what may be to come. “
With new developments and implications emerging daily as the nation and the world do their best to cope with this time of upheaval, it is almost impossible to predict with certainty how exactly co-ops, condos, and HOA communities will be impacted. both long and short term. Experts and laymen alike find themselves in uncharted waters, and what is certain is that the reverberations of the pandemic will be felt for a long time to come.