Refinancing a lot split

[William Morgan]

A business partner of mine has a 1st mortgage secured by a property.  This property has two SFR's on one lot. We are in the very late stages of executing a lot split through the city. I will purchase one of the SFR's on its own newly created parcel. My business partner will retain ownership of the other SFR on it's own newly created parcel.

The problem we need to solve is how do we refinance the existing 1st mortgage (Chase), which is secured by the 2 SFR's on one lot, into a mortgage secured by only one SFR on its newly created parcel that will result from the split?

Chase will not "sign off" on the required forms releasing their interest in the unsplit lot.  This release of interest is needed by the city to allow the split to be finalized.  Also, they will not lend on a future new parcel - they can only lend on a parcel that already exists.  So we are in a catch-22.

Is there another solution?  

Is there a lender who will work with this dynamic situation as part of a refinance that will pay off the existing 1st, allow the lot split, then secure only one of the resulting parcels?  I'm seeing only two viable alternatives: 

1. Pay off the 1st with cash, finalize the split, then get a mortgage on one of the resulting parcels.
2. Get an expensive bridge loan

Ideally, we want low-cost residential financing on any long term financing that will remain in place. Does anyone have any insight on this?