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Kayakgirl, Home Buyer in Freeport, ME

I live on a private road in Maine. I was denied a refinance mortgage because no legally binding private road agreement exists. There about 10 other

Asked by Kayakgirl, Freeport, ME Thu Aug 5, 2010

houses on the road. We purchased our house 3 years ago and refinanced a year ago and the private road agreement never came up as an issue. I imagine my neighbors also have mortgages and never asked me to sign an agreement. Has anyone ever heard of this before?

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Hi Kayakgirl,

I haven't personally ran into that issue, but I have seen a major tightening in the lending industry over the past 3 months. I thought the tightening had ended a year ago, but this most recent wave has been the worst I have seen in years. I would suggest going to a different lender to try the refinance. If you would like a recommendation, give me a call at 975-9330 or e-mail me:

Steven M. Dyer, CRS
Keller Williams Realty
50 Sewall St., 2nd Floor
Portland, ME 04102
1 vote Thank Flag Link Thu Aug 5, 2010
This has been happening for a while. Best bet is to find a different lender who will lend on a property on a private road. I think if I lived on one I'd be tempted to see if I could get it turned into a "regular" road. I really don't see the benefit of them and this issue is a real drawback for homeowners on private ways.
0 votes Thank Flag Link Tue Sep 23, 2014
Just happened to me tonight via a phone call from my loan officer. She stated that a private road agreement between 27 owners must be signed before I get this loan! She also told me that I could not sell my home until the agreement is signed. I was livid. It's not enough that they asked for my divorce papers of 18 years ago; now this! Try getting all these country people in Tennessee to sign an agreement. The loan officer is going to write them a letter and tell them someone on their road is trying to get refinancing and a private road agreement has to be signed and registred at the courthouse before anyone on the road can sell or refinance.

Wow, go figure....Loan Officer said it was the government doing this to people to protect loans because of the real estate crash.

I'm ready to walk away. (The same thing that happened when real esatate market crashed) People just walked away.
0 votes Thank Flag Link Tue Sep 23, 2014
That shouldn't be a deal breaker for us. I just refinanced my Dad who is on a private road and one other. There are ways around it and we underwrite our loans inhouse and know that this is common in Maine.
0 votes Thank Flag Link Fri Aug 6, 2010
The requirement for a written road agreement is a farily new requirement, implemented by Fannie Mae a few years ago. Not only must the road agreement be wrtiten, it must be recorded in the County Registrar. The State of Maine also has specific rules covering formal road associations. You will find additional information on this at:

Not all loans are required to meet Fannie Mae guidelines so it may be possible to get a loan without a formal road agreement. You just need to tell the lender upfront that there is no road agreement and inquire if they offer a loan program that will not require it.

That being said, a new mortgage and 2 refinances within a 3 year period is a bit unusual. There are costs associated with a refinance that usually take time to recoup. Frequent refinance, especially if accompanied by "cash out", have led some other homeowners to problems. I urge you to review the refinance with a financial advisor to see if this is really your best financial option.
0 votes Thank Flag Link Fri Aug 6, 2010
I have never had people actually be denied, but I have had attorneys draw up a road agreement for the loan to go through. It is true that underwriting will usually not approve the loan without one. If you email me, I'll give you the name of an attorney who may be able to help you.
0 votes Thank Flag Link Fri Aug 6, 2010
becoming more and more common... our daughter recently had trouble purchasing a home in a new development... she was the first or second one to purchase... no road association had been formed yet... they HAD to get one done before the sale could proceed... it was driven by a comment from the appraiser in her case... he could not support the value w/o a proper association in place.
0 votes Thank Flag Link Thu Aug 5, 2010
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