Lawsuit during Refinance Process

2 Replies

I am a current customer with Flagstar Bank and I am applying to refinance my primary residence.

My FICO mortgage scores are 632 , 623, 590. My original purchase price was $530k and my current loan amount is $100k.

I am looking to do a cash out refinance and increase my loan amount to $152k. My debt to income is about 36% and LTV is fairly low as well.

The caveat is that my neighbor and I have had a disagreement about a fence I put up because he believes they are not allowed and has filed a lawsuit in Chancery court . He is not seeking monetary damages other than a claim for attorneys fees which he is not entitled to given that we are a state that follows the American rule ( each side pays their own way ) . My lawyer is paid for through a pre paid legal plan through work and hence I do not have any such costs either.

Could you please help me understand if at a bank like Flagstar my refinance would be possible ? Especially if I am with the same bank for my current loan ? Or are there rules barring me from closing the deal till judgement is passed?

Thank you so much ! I really appreciate it. 

Your credit scores will be an issue, outside of an fha loan, but the action by the neighbor should be irrelevant. Lenders don’t look up pending law suits, they’d just find judgments.