Condo Deposits Returned

Condo Deposits Returned SAN DIEGO, CA - Developers of San Diego's tallest mixed-use condominium high-rise, at Tenth Avenue and A Street Downtown, have decided to cancel all escrows and return home deposits to some estimated 300 buyers because too few purchased homes to meet financing deadlines.

Developers had to have 70 percent of Vantage Pointe's condos sold to prospective buyers to meet the new guidelines secondary mortgage giant Fannie Mae (known formally as the Federal National Mortgage Association, or FNMA) implemented March 1.

Buyers should have received their returned deposits by the first week of June. Developers needed to meet sales deadlines by mid-May. Buyers will either take the refunded deposit or have a chance to sign new purchase agreements, said Vantage Pointe sales manager Donna Lutz.

Fannie Mae guidelines require at least 70 percent of the units sold or under contract before the government- backed secondary mortgage company would purchase any of the home loans from primary lenders.

Fannie Mae changed the number of homes sold or under contract needed to purchase the loans from 51 percent to 70 percent on March 1. Developers had 43 percent of the condos sold or under contract, according to Lutz. Wells Fargo Home Mortgage financed a majority of the home loans, according to the project's parent company, Pointe of View, and its president and chief operations officer Brian Stoddard.

Pointe of View's main offices are located in Alberta, Canada. Stoddard confirmed the return of deposits amounting to 5 percent of the purchase price. Selling prices for the mostly unfinished homes range from more than $200,000 to about $1.2 million.

Asked whether he's heard any complaints from any prospective buyers about the returned deposits, Stoddard said, "Those are all handled by the sales office in San Diego."

To satisfy requirements and move forward with financing, Fannie Mae and Pointe of View agreed to split sales requirements into three phases. Instead of requiring the sale of 70 percent of all units, developers must have sold or entered into an agreement with buyers for at least 70 percent of the units in each building.

"Fannie Mae is committed to continuing to provide liquidity and market support in a manner that supports sustainable home ownership and helps stabilize communities and neighborhoods impacted by the housing and economic downturn," said Amy Bonitatibus, Fannie Mae spokesperson, in an e-mail. "The conditional approval granted to Vantage Pointe shows our willingness to work with lenders and developers on projects that require additional consideration.

"In this case, we agreed to recognize each tower separately and approve financing for the individual towers if certain presale conditions are met." Construction on the 679-unit complex started several years ago and has yet to be completed.

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