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Home >> Lending >> Home Mortgage
Loan to Make Access to Property
There are seven land-locked landowners to my north who have no other way for a legal access to their property. They claim they cannot come up with the money per homeowner because some of them do not work (yet they have a mortgage), and my suggestion was to go to the bank and let them know the situation with the property and get a small loan or cash out some equity, so they can have a legal access (having a legal access will allow them to sell, even the bank if the loan gets defaulted on). Am I way off base with this or am I on track? Why or why wouldn't the bank give them the small amount necessary to obtain a legal access?
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 The real question here is what laws allowed the property to be sold without an ingress/egress, were the lenders aware of this, and what protections, if any, do the landlocked owners have as a result of all this? Local laws would have an impact and that would have to be investigated as it would impact the cost of gaining access. If a roadway has to be purchased from other landowners, what is most viable route and what would that cost?
From a lender's perspective, will the landlocked owners qualify for loans? If they don't, there is no incentive for the lenders to make the loan. If the property was eventually foreclosed on, the lenders would have a similar cost seeking ingress/egress rights unless terms were going to be more favorable to the current landowners for some reason.
Published on BankingQuestions.com 10/03/08
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