Can I be denied a home equity loan because the bank that owns my mortgage is out of state?

UPDATED: Oct 1, 2022

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Can I be denied a home equity loan because the bank that owns my mortgage is out of state?

Shortly after purchasing my home, my mortgage was sold to an out of state
bank no branches in my state.

I sought a home equity loan recently, and was told that they do not offer
home equity loans to homeowners in states where they have no branches.

Is this legal?

Asked on September 27, 2017 under Real Estate Law, Missouri


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

It is perfectly legal. There is no obligation on the part of any particular bank or lender to offer home equity loans at all; and if they do, they may put essentially any limitations on eligibility for said loans that they want (other than limitations based on sex, color, national origin, religion, etc.). It is a non-discriminatory, not illegal, and reasonable limitation to not offer loans where they have no branches; therefore, they may refuse to loan for this reason. You will have to apply to some bank for a home equity loan.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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