Q–It might be too late for you to help me, but I want to know what I should do about my condo, which I recently bought. When it was listed for sale, I inspected it over the July 4 holiday.
Everything was very quiet. I tried to meet my prospective neighbors, but they were out of town. Now I have discovered my adjacent neighbor is a single mom with two teenage sons who are up until 3 or 4 a.m. making noise, such as stereo, voices, phones and banging doors.
Did the seller have a duty to disclose this noisy nuisance to me? When I spoke to one of the teens, he told me the seller used to pound on the walls when it was too noisy. I am getting estimates from contractors to soundproof the wall. Do I have a right to make my seller pay the costs? I never would have bought if I had known of this problem.
A–Yes, your seller should have disclosed the noisy neighbor nuisance. If you were a regular reader of this column, you would have known poor soundproofing is the No. 1 complaint of condo owners. You should have insisted on testing the soundproofing before purchase.
Before you spend money on soundproofing, which might not work, please consult a local real estate attorney. He or she will probably write a letter to your neighbor, requesting immediate abatement of the noise nuisance. If that doesn’t work, a lawsuit to abate the private nuisance might be the most effective remedy.
If the soundproofing cost and legal fees are within the small claims court jurisdiction, you might want to sue both the seller and the noisy neighbor to decide who should pay the expenses to abate this private nuisance. Thank you for sharing this bad experience so others don’t make the same mistake.
Q–I often read in your excellent column how increased home value should allow cancellation of private mortgage insurance (PMI) premiums. We bought our home in 1997 for $180,000 with a 5 percent cash down payment, so we had to get PMI. Today our home is worth about $300,000.
Since we have a huge equity, we asked our lender to cancel our PMI $109.88 monthly premiums. However, the lender says I must prove I have paid at least 25 percent of the purchase price, although we have about 40 percent equity. Unfortunately, our PMI contract seems to back up the lender, although no mention of this severe restriction was made to us when we obtained the PMI mortgage. What can we do?
A–If you had obtained your home loan after July 1999, you would be able to cancel the unnecessary PMI when the loan-to-value ratio declines below 78 percent. In 1999, Congress enacted a new law barring PMI abuses, such as your situation. Unfortunately, this new law does not affect your 1997 PMI mortgage.
Who owns your mortgage today? Ask your loan servicer. You must be told. If you’re lucky, your mortgage was sold in the secondary mortgage market to Fannie Mae or Freddie Mac. Their policy is to cancel PMI when the loan-to-value ratio drops below 80 percent if the borrower has an on-time payment record.
However, if you can’t get the PMI canceled to save $1,318.56 in PMI premiums each year, refinance with another lender. Don’t do business with firms that don’t treat you right.
Q–I have an FHA mortgage with Homeside Lending. When its balance dropped below 80 percent of my home’s market value almost two years ago, I asked to have my mortgage insurance canceled. But I was told this can’t be done since I have an FHA home loan. Is this true?
A–If you contact FHA in Washington, D.C., you will be told it is up to the FHA mortgage lender to decide when and if FHA mortgage insurance is no longer needed. But in the real world, FHA lenders rarely cancel mortgage insurance to save money for their borrowers. Unfortunately, FHA can do nothing to force your lender to cancel your FHA mortgage insurance.
———-
Have a question about real estate? You can write to Robert Bruss in care of Tribune Real Estate Features Service, 435 N. Michigan Ave., Suite 1400, Chicago, IL 60611. Answers will be provided only through the column. Please note that laws vary from state to state and area to area. Consult an attorney for specific legal advice.
