Legal Question in Real Estate Law in Alabama

Residential RE Loan - wanting to refinance

I am writing on behalf of my brother & sister in-law. They built a home on Lake Martin in Alabama for the purposes of selling. They refinanced the house w/ Countrywide about 12-15 mos ago and the terms of this loan were interest only and they were not allowed to refinance the loan. Essentially, this loan could only be retired by selling the property. The selling climate is not very good and they would like to refinance. Can you suggest what they can do to motivate the lender to renegotiate the current loan w/o defaulting, which they do not want to do? They have not approached the lender yet and I am wondering if there is a standard letter to use, (specifically for Countrywide in light of all of the negative exposure they have recently had regarding predatory loans.) to compel CW to re-do the current loan terms. Thank you.


Asked on 7/28/08, 6:51 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Residential RE Loan - wanting to refinance

California puts medium-strict limitations on the right of a lender to forbid prepayment (by refinancing or otherwise), but without such statutory limitations, the lender and borrower are probably free to negotiate whatever terms they can agree upon, including these. You'll definetly need a response for an attorney licensed in Alabama who would know whether Alabama limits the right of a borrower to prepay. Some restrictions are normal and usual, so a complete answer would also require knowing exactly how the restriction in this loan is worded, what is permitted and what is forbidden, etc. Countrywide has new ownership and its policies may have changed; it might be delighted to be paid off now, so might as well ask.

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Answered on 7/28/08, 9:49 pm


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