A cooperative in Manhattan is converting to a condominium. How does this conversion affect existing shareholders with share loans?
Correct Answer
D) Lenders typically require loan modifications or refinancing to reflect the change in collateral type
Conversion from co-op to condo changes the collateral from personal property (shares) to real property (condo unit). This fundamental change in security typically requires lenders to modify existing loans or require refinancing to properly secure the debt with the new real property.
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