I am now dealing with this issue and trying to find the neighbours in order to sign the agreement. At a standstill until we got there. No signatures no conclusion If the property is not located in a state that has legal requirements for maintenance, and there is no agreement or arrangement for road maintenance, or there is an agreement or arrangement that does not meet the requirements listed above, the lender can still deliver the loan. However, the lender is required to indemnify Fannie Mae (as described in A2-1-03, Compensation for Losses) for any loss suffered by Fannie Mae due to the physical condition of the road or to establish and/or maintain access to the road. Fannie Mae will not purchase or securitize a mortgage secured by a property that is subject to certain land use regulations, such as. B coastal tide or wetland laws that create setback lines or other provisions that prevent the reconstruction or maintenance of property improvements if they are damaged or destroyed. The purpose of this type of land use regulation is to eliminate existing land uses and to stop land use planning, including the maintenance or construction of dikes, within certain backlash lines. Update March 23, 2015: Sad news. The above bill is dead. The politicians of Olympia probably have no idea how important it is, and they didn`t take the time to vote on it.
No one cares. Oh boy. Wait until you try to sell your home on a private street and your buyer can`t get the FHA loan. Hundreds of homeowners will be affected and imagine the devastation if you simply can`t sell your home to someone who gets a loan that requires the FNMA`s participation. If they do not pass this simple bill, many will not be able to sell their homes except to cash buyers or those who get a conventional loan. An elderly couple from this subdivision decided to sell their prefabricated house on one hectare. Buyers are also 70 years old and apply for a loan. They are eligible for the loan, but their lender tells them a few days before closing that someone in the bureaucracy, that is, the FNMA regulators in the sky that govern the subscribers, threatens not to make the loan unless the seven owners agree to a written contract for the maintenance of private roads, that their signatures be notarized and that they do not register it. The agreement must stipulate that all private road maintenance costs will be shared equally among the seven owners, or words to that effect. Summary of the Provision of House Bill 1349: An easement is a non-possessive interest in someone else`s land that entitles the parties to a private right of way that embodies the right to surrender someone else`s land. UPDATE: I`m adding this important update because some of you might be facing this nightmare, and after a lot of legal research, phone calls, emails, and administrative resources that came into play on this topic, we found the solution in Washington State.
If, according to FNMA regulations, there is a state law that does the same thing as a private road maintenance contract, that is, stipulates what is already true in common law that anyone who uses the road is responsible for its maintenance, then the FNMA requirement is met and the loan can be granted in accordance with the FNMA. Here is the specific language of the Washington Law (HB 1349) which does the following: If I technically own the road, but all my neighbors have legal access, and let`s say the road needs work. just a little filing and filling, but it costs $5,000 or $10,000. (And yes, it costs.) Regulators don`t understand real estate, and they certainly don`t understand the implications of requiring private road maintenance agreements, otherwise they would never have written such a deeply ridiculous rule. Since a registered easement, such as the one in this story, is legally part of the property, a registered trust deed guarantees the loan with or without a road maintenance contract. The potential problems they envision for lenders are about a million times less than the problem they have created for buyers and sellers. Of course, the regulators have never consulted with me or other brokers in the rural sector, but there would have been a simple answer if they had really felt compelled by an overwhelming desire to create such regulation. They could have added an exception that would allow a lender to include a statement explaining why such an agreement would be inappropriate for the local real estate market and why it would impose an unreasonable burden on all parties involved. But they didn`t.
Private road maintenance contracts should never be imposed on private owners by a regulatory fiat. I think the justification for this requirement is somewhat legitimate. Think about it from the perspective of the banks. What happens if they borrow money for a house on a private road without an agreement? They land on the property and part of the road is washed away by flooding or similar. They just want a legally enforceable agreement that is registered so that they can guarantee that the damage will be repaired. What happens if the house is the last house on the street and the bank house is the only house affected by the damaged street? They would not be able to sell the seized property until the road is repaired, and if there is no agreement, then they would be S.O.L The end result is that many homeowners will not be able to sell their homes, especially prefabricated homes, subject to this deeply unfair regulation. This settlement will hurt many elderly couples who will have to sell their prefabricated home on a private driveway for health reasons or the death of a spouse. This regulation has never been enforced in the Sequim area, but now many older homeowners will find that their homes are unsaleable, as cash buyers of prefabricated homes are extremely rare. It was only yesterday, after receiving a copy of the review we paid for to obtain a home equity line of credit, that the lender, a credit union, informed us that we had to provide a PRMA before closing. Jesus. Luckily for us, we don`t really need any money, but it could cause so many problems for everyone on our street in the future.
I may have a good chance of getting the other 3 owners to sign something, but it has to be done well. What crocodile. Thank you for your well-written article. Yes!! arrived to us, the key bank concluded a breaker deal on CLOSING DAY!! Everyone refused to sign a simple road maintenance contract!! What a nightmare. For those of us on the ground with our boots firmly planted on the Terra company, living and breathing real estate, and for brokers like me who have practiced real estate law for 20 years and written hundreds of real estate documents, including many private road maintenance contracts (and pleaded the language in these agreements), the naivety of these underwriting regulators and the FNMA is shocking. Therefore, today`s video explains what to do if the property is located on a private road, what important steps are needed to get your financing, and explains the requirements of the USDA, VA, FHA private road, and conventional loans. I also deal with this stupid mess. Dirt road. Maybe 130 feet by 12 feet in dimension. What a crazy and stupid situation. I also received this call today: “I call about the bill of 1841 that you presented to Olympia. We are located on a private road where the DNR, the warehouse and a former railway easement are involved.
There are about 12 or 15 parties here, and now they can`t sell their properties. . “, because not everyone can agree to sign a private road maintenance contract. The costs of maintaining an easement are shared between the landowner and those with the legal right to use the easement. The parties may determine the conditions for maintenance in a documented agreement with the district auditor. Alternatively, if the parties do not agree on maintenance, the costs of maintaining the easement must be shared between the parties in proportion to their use of the easement. Each party is obliged to make good any damage it causes due to negligence or abnormal use. When resolving disputes between the parties, the frequency of use of the easement by each party and the size and weight of its vehicles should be taken into account, unless otherwise specified in the agreement. Without such a maintenance contract, my neighbors could force me to shoulder the full burden of maintenance costs. You can use it, but you don`t have to pay. Why is this fair? My mother passed away last year and we sold her house.
The registration deadline was April 1, 2017. The VA rejected the veteran because the house is on a private road. That`s what lender Chase Bank says. make a conventional loan. We have extended the deadline to April 14. The banker said he would close. Guess what? Three days before closing, the banker said they couldn`t make the loan because of the road! Now the deadline for submissions is April 24 and there are 15 residential properties on the street. The road is in very good condition because everyone takes care of their part.
Now I have to work on a road agreement. It was a nightmare! Buyers are devastated and so are we because it is our legacy and we (my siblings) have plans. My sister wanted to use her share to build a new house (she was still renting), so it`s really wasted! Help!! It appears that the bill was reintroduced on April 29. I am currently dealing with this and I hope that I can get the other owners to sign this agreement. Thnx for your well-written article. I think it`s frustrating that politicians aren`t just solving this huge problem for homeowners. .