Home Buying in Wappinger>Question Details

Joe, Other/Just Looking in New York

Is there any way to get a mortgage without a Road Maintenance Agreement?

Asked by Joe, New York Wed Feb 6, 2013

I understand a cash buyer will not require one, but in the case of a buyer who needs a mortgage, is there any way around this requirement? One of the homeowners on the road is refusing to sign the agreement and this is holding up the sale of the property. The buyer has tried several lenders with no luck. Any suggestions would be greatly appreciated!

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2
Good afternoon Joe,

Unfortunately the answer to your query is, "No." Think of this situation from a Lender's perspective and from what I was taught 23 years ago when I began my career as a mortgage professional, "Common Sense Underwriting."

In the event we lend money on the property and there is some radical change to the roadway because there's no formal agreement AND there's a fire in the house---the house which the bank collateralized for the mortgage loan---AND the fire engine can't get down the private roadway due to the radical change, then the house will burn down or suffer fire damage. There goes our collateral!

Here's what FannieMae says about this situation. (I had to look this up Monday because one of my Prequalified Buyers encountered exactly this situation while looking at a home in Brewster on Saturday): "If the property is not situated on a publicly dedicated and maintained street, then it must be situated on a street that is community owned and maintain or privately owned and maintained. There must be adequate vehicular access and there must be an adequate and legally
enforceable agreement for vehicular access and maintenance."

Notice the language, "enforceable agreement for...access and maintenance." We Lenders---and ultimately FannieMae, FreddieMac, HUD, and USDA want to know the collateral is protected and accessible. Further there should be no obstacles to marketing the home to any and all buyers in the even the Lender has to take back the home in a foreclosure proceeding; the bank wants to get the house sold and a private roadway limits the market for potential buyers (as you know).

Sounds like your community around this roadway needs to hire an Attorney to determine what, if any, actions you can take with your neighbor who refuses to sign the agreement.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528

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2 votes Thank Flag Link Wed Feb 6, 2013
I just went through this on a deal

I have a lender who will make a loan on a property without a recorded road maintenance agreement.

Bruce R. Lublin, President, NMLS # 67032
Homerica Mortgage Corporation
235 Mamaroneck Avenue, White Plains, NY 10605
(914) 946-7100 x 210
Licensed IN NY, NJ & CT
NMLS # 60094
0 votes Thank Flag Link Sun Oct 12, 2014
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