Calculation of PRO RATA shares for co-op

[APOLLO77]

The bank wants to know the exact way to calculate Pro Rata Share I explained the way I have been doing this is by
Taking the overall Mortgage divided by the total # of shares in the complex or building and multiplying it by the # of shares in the subject unit. Then I divide that by the Mortgage to get the pro rata share for each unit x 100.

The Lender said that the way it should be completed ( overall Mortgage divided by the number of shares in the unit not the complex or building = the pro rata share for the unit.

If my method is correct they want me to prove that this is approved by FNMA/FHLMC

who is correct and if I am correct how do I prove it?

 

[Howard Klahr]

In general you are correct but to provide the information that the bank wants, tell them to read the articles of incorporation and bylaws of the coop. Just like the Prego commercials, "Its in there"

 

[APOLLO77]

Thank You they are still being a Pain they want to give them the articles of incorporation. I didn't know they wanted me to go to the co-op management company to retrieve this information for them. I wonder if they will put me on there payroll after all I am doing there work for them. Again Thank You for your response to my question.

 

[VolcanoLvr]

OP...you're saying (in your formula) that individual Co-op units can have more than 'one' share assigned to it?? How are shares assigned?

Is this always the case in all Co-op units?

I'm just trying to get an understanding of how 'shares' work. I don't personally do Co-op assignments. There are only a few Co-op's in Seattle, and I don't work there. I have heard that there are a very few number of appraisers who do Co-op assignments in Seattle because Co-op's are an entirely different ownership situation than Condo or normal fee simple residential.

 

[J Grant]

The owner should have some paperwork that specfies his percent of shares/# of shares in corporation, if the owner does not have it have them ask board of directors for it. Articles of incorporation should have # of shares per unit