James Goldstick offers tips on lending procedures.

With the real estate market experiencing record, activity owing to the lowest interest rates in recent memory, Fannie Mae conducted a roundtable on the topic of cooperative lending on Wednesday, April 30 at the offices of JP Morgan! Chase in Manhattan.

In the interest of gathering critical information about how lending procedures can be simplified and transactions expedited in cooperative corporations, Fannie Mae invited residential management authority James Goldstick, vice president of Mark Greenberg Real Estate Co., LLC, a full service residential management company with headquarters in Lake Success, offices in Manhattan, and clients throughout the New York metro region, to represent the New York residential management industry at the event.

Goldstick was joined on the roundtable panel by representatives of some of the most significant lenders in the metropolitan area, including Chase, Citibank, M&T, Washington Mutual, Bank of New York, Astoria Federal Savings Bank, HSBC, and American Home Mortgage.

Fannie Mae purchases loans from lenders pursuant to a set of guidelines. In the case of residential cooperative corporations, these guidelines include the provision to Fannie Mae of certain specific information about the co-op in question. Typically, this information is provided to the lenders by the co-op's managing agent.

"Fannie Mae's April 30 roundtable provided the forum for a dialogue between lenders and the management industry as to how we can work together to improve protocols for securing and processing the information lenders are required to provide to Fannie Mae," said Goldstick.

"Our objective was to discuss ways to make the processes of financing and refinancing smoother and more efficient for the ultimate end-user: the bank's customer, who is also the co-op's prospective shareholder."

During the course of the full-day .roundtable, Goldstick made the following suggestions:

There should be a uniform questionnaire for the use of all lenders and managing agents.

"Right now, every bank has its own form and list of questions," he said. "It would be far more efficient if all lenders were required to use the same questionnaire. That way, Fannie Mae would be sure to get all the answers they seek, and the work required of the lender and the managing agent would be streamlined."

There should be uniformity with regard to insurance requirements.

"Among the things banks need to know is that the co-op is properly insured," said Goldstick.

"But even though banks try to follow Fannie Mae's guidelines, each bank has its own interpretation as to what minimum insurance requirements are and what needs to be said on the certificate of insurance. Agreement in this area would go a long way toward making the financing process much smoother."

Lenders need to be better educated about how coops run.

"One of the big problems managing agents encounter is confusion on the part of some banking personnel regarding the financial and operational structures of cooperative corporations," said Goldstick. "The same is true for condominiums. To be most efficient for their customers, banks need to get their front- line lending officers up to speed with regard to how shared-interest associations operate."

Every co-op needs to be aware of when its proprietary lease expires.

"A major problem for lenders is the fact that proprietary leases in many co-ops are set to expire in less than 30 years. This means that the lender can't give a 30-year mortgage unless the lease is extended. What I explained at the roundtable is that it requires a special meeting of the co-op body at which at least either 66.67% or 75% ofall shareholders, depending on the laws of the co-op. vote in the affirmative in order to extend an expiring proprietary lease. That's not an easy feat. Of course, it's a no-brainer when you look at it from a needs perspective, but as a communication issue between the board, the managing agent, and the co-op's shareholders, it sometimes takes some effort to explain why shareholders need to get together and vote in favor of a motion."