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Refiancing with builder defects but no litigation or lawsuit

Hi,
 Doing a refi and approved but totally forgot the hoa filled a claim against the builder for defect's back in 2012. No lawsuit has been filed and the hoa and builder are working together. The board members state that litigation is the very last resort if needed. In the 2.5 years the only thing has been the roof's where inspect by the hoa and then the builder. that was 2 months ago and the board members have not heard anything from the inspections. What are the chance this will still go through? The lender just ordered the Hoa certification and it just reminded me about the defects. I hope this does not become a problem and our loan get's denied. Any info would be great.
 
 
 
 
  • June 11 - Santa Clara
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Answers (6)

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We got the clear to close so no problems with the HOA. The lender was only really looking to see if our HOA was in litigation. Thanks 
  • June 26
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When we had our home appraised the appraiser asked for the hoa info. Would he of contacted the hoa when doing his report and noted any builder defects, claims? There was no mention of anything about the hoa and builder. I guess we just have to wait and see. I will let everybody know of the outcome. Thanks for all the help.

Oh our loan is through a broker if that makes a difference. The bank wanted a full hoa certification filled out.
  • June 12
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Yes we locked our rate @4% for 30 years. I was looking on a home that sold in our complex(last year) and the disclosures state see hoa about claim against builder. Everything else passed IE(inspection report, termite report etc).. Thanks for the info.
  • June 12
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Everyone is correct about how the HOA completes the questionnaire.  It is also possible, if you're doing a conventional loan that the automated underwriting system requests only a limited review where this question is not asked. 
  • June 12
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Did you have a locked interest rates? There may be other lenders who will refi mortgages with a lawsuit.

 In the Bay Area almost 100% builders are being challenged before the end of 10 year warranty on defects which occurred over the years.


 
  • June 12
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Best to wait and see.  The HOA Cert sent by the lender almost certainly asks if there is any "pending lititation". All depends how the HOA checks the box. If the HOA does check "Yes", then provide the lender with documentation on the nature/extent of the claim. They have a HOA department that reviews these items.  Worst case, if they say no, try another lender.
  • June 11
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