Is it common for lender to refuse to lend (Conventional fixed 30 year) because they refuse to accept the "60 day letter" from HOA?

Asked by Csp, Houston, TX Tue Oct 19, 2010

We recently got a shock when we found out the day before the closing (from title company) that the lender had problem accepting the "60 day letter" lien subordinate stuff from the HOA of the property we are purchasing. So we were refused loan last minute.
Is it common for lender to refuse conventional loan due to the HOA policy on lien subordination? The title company as well as the lender they have recommended me to use told me usually lenders should accept the "60 day letter" and approve the loan. Just wanna get a 2nd opinion here. Thanks!

Help the community by answering this question:

+ web reference
Web reference:


Rick Grau, Mortgage Broker Or Lender, Baytown, TX
Tue Oct 19, 2010
I ran into this problem on a cashout refinance in The Woodlands last year. The Woodlands HOA then did not subordinate and only issued the 60-day letter. The lender I was using refused to close the deal which was about 2/3 done when I found this out. If it helps at all I switched my client to Security National who had no problem accepting the 60-day letter and we closed it. They were the only ones I could find of the regular lenders I use that would take it.
That was a year ago so I don't know if they've changed their policy. I know that The Woodlands switched over Jan 1 to a new form of HOA and now it's not supposed to be a problem there. I understand there are still HOA's scattered around that refuse to subordinate, though, and obviously yours is one of them. Ask your mortgage guy to contact Security National and see if they can do it. Unfortunately you'll probably need a new appraisal...
Good luck - Rick
1 vote
Robert Wisem…, , Houston, AK
Tue Oct 19, 2010
Can you provide more information about the 60 day letter from the hoa?
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more