September 8, 2021 at 3:13 pm #76510Brad09Participant
We signed our closing disclosure and were waiting on the final underwriting review to get our clear to close when the day before closing BoA said there were issues with the leasehold on our property. This is 16th section land, which is unique to Mississippi, where the land our new house is on is leased from the local school district. This is very common here and mortgages are done everyday with this particular leasehold. It seems the BoA underwriter is not familiar with how these leases work in Mississippi. Our NACA counselor closed a loan on 16th section land in a neighboring county just last month, so BoA has done this before. Our NACA counselor has done all he can to reach out to BoA and their PRO department to try to get them to clarify what the issues are or to call the local 16th section specialist for our school district so this can be worked out. We have been trying to get answers from them for three weeks now and are concerned the seller is going to back out or we’re going to lose thousands of dollars in earnest money, structural/hvac evaluations, home inspection, etc. that we’ve already paid for. Our file has been escalated and NACA supervisors have been brought in but nothing is being done. Is there anything I can do or someone with NACA/BoA that I can contact to get this pushed through? Any other suggestions would be appreciated.September 8, 2021 at 3:54 pm #76511NelsontMember
I live in the Baltimore, Maryland area and while we don’t have what you have in the 16th section we do have a fairly similar situation unique to the city, not even to Maryland just the city, called ground rent.
In the early 1900s ground rent was created as a way to make owning a home more affordable so investors would buy properties and sell the house but keep the land. The new home owner would make the mortgage payment and pay the taxes AND also pay the land lord rent on the land which in the 1920s was like $50 per year.
Even though there was an extra bill it was still cheaper because a house without land is valued less than a house with land.
The problem is that by the 1980s or so evictions on perfect paying mortgage holders became rampant because the ground rent deeds were so old people forgot about them and then the family found them and ennacted their rights.
This is exactly what BOA wants to avoid. While Baltimore has no NEW ground rent anymore the ground rent deeds still exist and most of them are WW2 era or earlier so the familes don’t often know they are landlords and if they do they don’t often collect.
In many cases people decide to buy out the ground rent deed during the purchase process which may be a few hundred or a few thousand dollars. In other cases, and I think I’ve seen this with naca, buyers have been required to buy out the deed.
Sorry for the long history but it kind of gets into why BOA is pausing your file. Long story short they want legal proof nobody will evict you.September 8, 2021 at 5:13 pm #76513TTrumbleMember
Wow, thanks for the history lesson nelsont! I had no idea about such things as “ground rent” fascinating!
Online Operations, NACASeptember 14, 2021 at 11:33 am #76597Brad09Participant
Thanks for the response Nelsont, but what you are describing sounds completely different than my situation. BOA has proof no one will evict us. Everything is spelled out in the lease. Our escrow officer went through the reasons for decline BOA gave as to why the lease is not eligible and she copy/pasted the exact sections of the lease where each of these issues has been addressed. It’s as if BOA did not even read the lease agreement. But they won’t respond. And like I said in my original post, my NACA counselor closed a loan with BOA on 16th section land last month. So this isn’t new. They are just refusing to address THIS particular lease. We are four weeks past our original closing date and the seller, who moved out before closing, is having to pay for a mortgage and utilities for a house she isn’t even living in. Is there someone higher up at NACA I can contact to get this moving? The file has already been escalated and my mortgage counselor is doing all he can. So it seems I need to take this higher up the ladder if possible…
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