Marc Landis Quoted in Brick Underground Article on Shareholder Approval to Get a Reverse Mortgage11/06/2023
Phillips Nizer Managing Partner and Real Estate Practice Co-Chair, Marc Landis, was quoted in a Brick Underground article, published on October 30, titled: “Does a shareholder need an approval from their co-op Board to get a reverse mortgage?”
Marc’s quotes were stated as:
“Boards are often conservative in dealing with new products, so there is a learning curve involved,” Landis says.
“But a reverse mortgage won’t raise your carrying costs, making it more attractive to boards concerned about collecting monthly maintenance fees, Landis says.”
“That’s why most lenders won’t allow shareholders to borrow more than a 60 percent loan-to-value ratio, meaning that you can’t borrow more than 60 percent of the value of your apartment,” Landis says.
“That document [recognition agreement] helps protect the co-op’s right to secure any missing maintenance fees before the bank collects,” Landis says.
“Landis helped a board unanimously approve a reverse mortgage with a 50 percent loan-to-value ratio this year. He said the process went swimmingly.”
“We had a frank conversation about what it means for the co-op to have a shareholder who has a reverse mortgage and the answer is that it doesn't put the co-op at any particular risk,” Landis says.
To read the full article click here.