Sunday, September 9, 2012

"Legal, Non-Conforming Use" Zoning Status Throws Monkey Wrench Into Couple's Effort To Sell Home

In Deltona, Florida, The Daytona Beach News Journal reports:

  • The moving boxes speak to Lynne and Earl Hoisington's intentions.

    But two closings this week -- the one where they planned to buy a new house in DeLand and the one where they would turn in the keys to their three-bedroom, two-bath Deltona home -- are off.

    The Hoisingtons and the real-estate agents involved in their deal say a city ordinance, an eagle-eyed appraiser and the square-footage of the Deltona house are to blame. They suggest the city's rules, if not changed, could slow the sale of homes in a city that continues to be in the throes of the foreclosure crisis.
  • [A]n appraiser reviewing their Giovanni Street home found its dimensions, 1,068 square feet, fell short of the Deltona requirement for single-family homes in its residential zoning. He checked a box marked "legal nonconforming (grandfathered use)."

    The nonconforming tag means if the home were to be destroyed by fire or a natural disaster, it would have to be rebuilt at the current standard, 1,200 square feet, or more. That clause meant the buyer could not obtain financing, according to Matt Gurnow, a loan originator with Watson Mortgage Corp., DeLand.

    Gurnow wrote Deltona Mayor John Masiarczyk last week explaining that the loan for a nonconforming house is "not sellable on the secondary market and therefore not a loan we can close and fund. ... Our investors (JP Morgan Chase, Wells Fargo, Bank of America, B&T) will not purchase a loan on a home that is nonconforming, knowing that if their collateral for the loan is destroyed, it cannot be rebuilt as it sits."

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