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Loren, Lawyer
Category: Real Estate Law
Satisfied Customers: 34421
Experience:  30 years of real estate practice experience.
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My son and I own 2 multi unit housing complexes in Central

Customer Question

My son and I own 2 multi unit housing complexes in Central Pa. They are financed with the same small town bank in Bloomsburg, Pa. at in interest rate of 5.75%. I have tried to refinance the properties to obtain a lower interest rate and to obtain a little extra working capital. The properties have plenty of equity and our payments are on time, but the bank always say they cannot do it because of my personal credit rating is low. Other banks have also turned me down because of my credit rating. My rating is low because I got hit very hard with some investments in Florida during the 2008 housing crisis. But I think the real reason the bank continues to refuse to do the refinancing is because they want to keep the interest rate high. With equity in the properties and payments on time, is it legal for the banks to refuse to do the refinancing?
Robert Fetterman
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Loren replied 1 year ago.

Good afternoon. I am Loren, a licensed attorney, and I look forward to assisting you. I am sorry to hear of your dilemma. I realize how frustrating this is for you and I hope to provide you information which is accurate and useful, even though it may not be the news you were hoping to get.

Banks are permitted to have and enforce their own underwriting standards and practices. It is only illegal if they apply the standards in a discriminatory fashion. In other words, they can not refuse a loan or charge a higher rate due to the borrower's race, religion, etc.

If you believe that is a factor in your difficulty getting a loan then you should file a complaint with t State Attorney General.

Otherwise, I am sorry to say, banks can legally decline to loan based on the borrower's credit history and it is not illegal.

Expert:  Loren replied 1 year ago.

I realize this is probably not the answer you were hoping to receive. Also, please remember that this is not a moral judgement on my part. As a professional, however, I am sometimes placed in the position of having to deliver news which is not favorable to a customer's legal position, but accurately reflects their position under the law. I hate it, but it happens and I only ask that you not penalize me with a bad or poor rating for having to deliver less than favorable news.

Expert:  Loren replied 1 year ago.

If you have no further questions, and have not yet done so, please remember to leave a favorable rating (5 stars) so that I am credited by JustAnswer for assisting you. A bonus is not required, but is always appreciated.