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Old 05-13-2018, 09:23 AM
 
3 posts, read 1,461 times
Reputation: 10

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I am a current customer with Flagstar Bank and I am applying to refinance my primary residence.

My FICO mortgage scores are 632 , 623, 590. My original purchase price was $530k and my current loan amount is $100k.

I am looking to do a cash out refinance and increase my loan amount to $152k. My debt to income is about 36% and LTV is fairly low as well.

The caveat is that my neighbor and I have had a disagreement about a fence I put up because he believes they are not allowed and has filed a lawsuit in Chancery court . He is not seeking monetary damages other than a claim for attorneys fees which he is not entitled to given that we are a state that follows the American rule ( each side pays their own way ) . He is also asking the judge to require me to take my fence down.My lawyer is paid for through a pre paid legal plan through work and hence I do not have any such costs either.

Could you please help me understand if at a bank like Flagstar my refinance would be possible ? Especially if I am with the same bank for my current loan ? Or are there rules barring me from closing the deal till judgement is passed?


Thank you so much ! I really appreciate it.

Last edited by sudman1; 05-13-2018 at 09:26 AM.. Reason: Added fact
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Old 05-13-2018, 09:41 AM
 
10,196 posts, read 6,124,956 times
Reputation: 10667
Quote:
Originally Posted by sudman1 View Post
I am a current customer with Flagstar Bank and I am applying to refinance my primary residence.

My FICO mortgage scores are 632 , 623, 590. My original purchase price was $530k and my current loan amount is $100k.

I am looking to do a cash out refinance and increase my loan amount to $152k. My debt to income is about 36% and LTV is fairly low as well.

The caveat is that my neighbor and I have had a disagreement about a fence I put up because he believes they are not allowed and has filed a lawsuit in Chancery court . He is not seeking monetary damages other than a claim for attorneys fees which he is not entitled to given that we are a state that follows the American rule ( each side pays their own way ) . He is also asking the judge to require me to take my fence down.My lawyer is paid for through a pre paid legal plan through work and hence I do not have any such costs either.

Could you please help me understand if at a bank like Flagstar my refinance would be possible ? Especially if I am with the same bank for my current loan ? Or are there rules barring me from closing the deal till judgement is passed?


Thank you so much ! I really appreciate it.
I'm not a professional, but if there is no lien on your house and one could not be put in place because of this so I don't see how it could affect you negatively. If you are asked if there are any lawsuits pertaining to the property you should disclose and bring any documenting proof that it is not a monetary lawsuit. Before you spend any money on inspections or appraisals you could ask the bank if this is an issue for them in your refinancing and get the answer in writing. You have a lot of equity in your home so I would think it's not a problem.

Have you gone to the township and established that fences are allowed, if not you should and ask your lawyer to have the case thrown out because it has no merit. Did you need a fence permit for the fence when you put it up, are you sure he's not disputing that it's on his land. are you sure the fence is not a kind that is not allowed or too tall according to town rules?
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Old 05-13-2018, 10:26 AM
 
3 posts, read 1,461 times
Reputation: 10
Thank you so much for reaching out and sharing your thoughts.

The fence is allowed and I got all the permits needed by the county and village I live in. Materials were checked and fully passed. I specifically built my fence a foot into my property to guard against and claims of encroachment.

The neighbor believes that the covenents formed 40 years ago bar fences and so I am in violation of the covenant. However, these covenants have never ever been followed and there are neighbors that have fences as well . The difference is mine is privacy as I wanted to block the creep next door from constantly staring at us when we were enjoying our land.

I just was not sure if have a pending lawsuit even though it’s not a boundary dispute or a lien prevents banks from lending to us in a refinance.
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Old 05-13-2018, 07:48 PM
 
Location: MID ATLANTIC
7,519 posts, read 17,283,443 times
Reputation: 7945
Well, not kniwing the legalities about your fence, Flagstar would not want to replace a 100K loan liability with a 152K liability. Any potential violations could be flagged with the HOA, when the title company seeks instructions from the HOA for closing.
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Old 05-13-2018, 08:12 PM
 
3 posts, read 1,461 times
Reputation: 10
No HOA exists or was ever created . The action by my neighbor is due to a covenant he believes runs with the land.

I have about $400k equity in my home so I thought this would help them overcome the fence issue given we believe the covenants have been abandoned as they have never been enforced in 40 years and no committee was ever appointed by the builder 40 years ago.
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Old 05-14-2018, 08:36 AM
 
10,196 posts, read 6,124,956 times
Reputation: 10667
Quote:
Originally Posted by sudman1 View Post
No HOA exists or was ever created . The action by my neighbor is due to a covenant he believes runs with the land.

I have about $400k equity in my home so I thought this would help them overcome the fence issue given we believe the covenants have been abandoned as they have never been enforced in 40 years and no committee was ever appointed by the builder 40 years ago.
Could you ask your lawyer to submit to him and his lawyer all the evidence you have with the permits and approvals? Maybe send the neighbor a letter apologizing for any upset that this issue caused him but that you have town permits that were approved and there is no reason to take down your fence and you would prefer if you could become civil neighbors to each other since you both need share a property border. Maybe post your phone number or email if you want a quick response. Then you will know if he's reasonable or a crazy person. If there are any other reason for his dislike such as racial or ethnic it may not make a difference. Tell him he has no right to legal fees and his lawyer may just be prolonging this to get money from him that he will never recover. He may be a miserable SOB who's only happiness in life is to try to make other's miserable in which case there is not much you can do but fight it.

I would approach another bank and ask if this would be an issue with such a refinance and provide proof of permit. I doubt he could even place a lien on your home if he wins damages to pay for his lawyer, and that would not happen overnight anyway. If the other bank says this is not an issue than ask your bank. If they say it's an issue you can always find anther bank. Just make sure that you get in writing from someone high up that this is not an issue so you don't lose any inspection or appraisal money towards the refinance.
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Old 05-14-2018, 09:40 AM
 
Location: Northern Virginia
4,497 posts, read 4,646,226 times
Reputation: 10291
Quote:
Originally Posted by sudman1 View Post
I am a current customer with Flagstar Bank and I am applying to refinance my primary residence.

My FICO mortgage scores are 632 , 623, 590. My original purchase price was $530k and my current loan amount is $100k.

I am looking to do a cash out refinance and increase my loan amount to $152k. My debt to income is about 36% and LTV is fairly low as well.

The caveat is that my neighbor and I have had a disagreement about a fence I put up because he believes they are not allowed and has filed a lawsuit in Chancery court . He is not seeking monetary damages other than a claim for attorneys fees which he is not entitled to given that we are a state that follows the American rule ( each side pays their own way ) . He is also asking the judge to require me to take my fence down.My lawyer is paid for through a pre paid legal plan through work and hence I do not have any such costs either.

Could you please help me understand if at a bank like Flagstar my refinance would be possible ? Especially if I am with the same bank for my current loan ? Or are there rules barring me from closing the deal till judgement is passed?


Thank you so much ! I really appreciate it.
Make an appointment to talk to someone at your bank. FWIW, your credit score falls into the Fair range so that may be more of an impediment than the pending lawsuit.
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Old 05-16-2018, 08:36 PM
 
Location: MID ATLANTIC
7,519 posts, read 17,283,443 times
Reputation: 7945
If the suit is in the title search, it highly unlikely the refi can move forward. From the lenders POV, again, if there is a suit, they won't want to increase their exposure from 100K to 152K. It's the way lenders think.

See if the title company will insure over the suit, with your equity.
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