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Profile picture for yonki

Can I refinance my mortgage while in litigation (being sued) by an individual?

  • October 12 2011 - Mount Pleasant
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Answers (4)

Profile picture for dk58

In respect to refinancing your current mortgage with pending litigation potentially against you, it is a huge liability for both the bank and the title company insuring your title if the loan closes without this being disclosed. Upon a normal mortgage refinancing, a title company always generate a compete title report against the property being refinanced, and certain searches are included in the title report which include any liens or judgments against the property. In a situation where you as the client have properly disclosed to your loan officer this situation, then at that point the title company can advise on the best solution since it wouldn't be seen on title since it's in pending status.
  My best advice is to wait until this case is complete, and then you could refinance with no issues. If there is a way you can obtain a letter from the other parties stating no liens and/or judgments is involved in this matter, then it might be worth a shot and seeing whether the title company and bank will accept based on investor approval.
If you should have any further questions regarding this matter, I would like to take a few minutes to speak with you and review all your options.

All the best,

David Kievsky
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  • October 05 2013
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google Hoa Litigation Condo Loans and you will find info.  We funded over 10 mil worth of them last year. 
  • October 05 2013
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You need to disclose this with a letter of explanation. Depending on the reason for the litigation it will depend on the underwriter working your file. Also, your loan officer may inquire with some lenders to check on this issue beforehand. I think this would be a case-by-case situation.

Happy funding, Rudi 
  • October 12 2011
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Profile picture for sunnyview
Good question. I thought that there was a question on most mortgage applications I'd seen that said something about the property being in an active lawsuit, but maybe I was dreaming when I read that. It's also possible that it only applies to lawsuits dealing with the specific property and not other types of lawsuits. You might ask your lender about it.
  • October 12 2011
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