my house flooded and the first mortgager was ok with self repair. my new mortgager is not. what do i do?

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the work is almost done and they require contractor documentation that I don’t have due to the fact that my first mortgager didn’t require it.

Asked February 13, 2019

1 Answer

The response and outcome of this situation depends on the documented agreement that was formed during the mortgage origination process. The fact that a new mortgager exists would imply that a process such a refinancing took place. This process would’ve most likely begun with documented establishment of required stipulations.

By US law, these stipulations are legally binding once there is evidence of mutual consent and the agreement does not violate acts such as the Fair Credit Reporting Act, the Truth in Lending Act and the Real Estate Settlement Procedures Act.

Self-repair could just as easily have been disallowed by the original mortgager, in which case the borrower would be in the wrong for doing so. The question, therefore, becomes what terms and conditions were agreed to within the context of the new agreement? Were the existing terms from the original agreement in areas such as this to be transferred to the new agreement?

The borrower is clearly aware that the new mortgager does not allow self-repair. How did the borrower become aware of this? Was it simply because the situation has now arisen, or can reference be made to the agreement?

The fact is that what the borrow can do now heavily depends on what can be proven. If there is no evidence that the mortgager established this clause in the agreement, then the borrower would be within his/her right to effect self-repair as the mortgager would be in breach by trying to act on a non-existent clause. In this case, the borrower can take this matter to the courts. However, if the clause does exist then the borrower is in the wrong.
Additionally, depending on the state in question, mortgage agreements may make provisions for application of state laws. Of course, this would only be a factor if state laws apply directly to this situation.

Answered February 15, 2019 by kdw

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