Can I Recover Earnest Money, Appraisal and Credit Card Fees from a failed purchase?

[mazook]

What is the name of your state (only U.S. law)? Arizona

I had wanted to purchase a condominium as a second home for my family and planned on moving in my son who is a full time student at a University who current apartment lease was to run out the end of Dec 2009. I had done some research and had found that although I qualified for a loan, because it was a condominium, I would be required to put down 20% on the loan. I found a local mortgage broker in early Nov 2008 and after asking him several pointed questions as to whether I would definitely be able to get the loan using funds withdrawn from a credit card for the down payment, and close by 15 Dec 2008, I went ahead and signed a contract with the seller, provided the seller with $1500 in earnest money, withdrew funds from my credit card for the down payment at a cost of $900, paid $350 for an appraisal, $25 for a credit report, and paid $60 for a termite inspection. By the afternoon of 19 Dec 2008, the mortgage broker could not secure a loan through an underwriter and I because I had to find my son another apartment to lease I had to tell the broker to cancel the deal.

My question is this... Because I was assured (verbally) by the mortgage broker that there would be no problem with attaining the loan and closing on time I expended closing costs of approximately $3000. Can I recover these funds from the mortgage broker since I would never have entered into any of this without his assurance of completing the purchase and getting the loan in the timeframe I required?

[JETX]

Originally Posted by mazook

Can I recover these funds from the mortgage broker since I would never have entered into any of this without his assurance of completing the purchase and getting the loan in the timeframe I required?

Based STRICTLY on the information in our post..... If you can PROVE somehow that the agreement was contingent on the financing as you claim, then you likely have a pretty good shot in court.
Absent that.... no.

[UtahBronco]

I'm sorry to hear about your complications in your real estate transaction and the loss you suffered because a loan officer wasn't up front with you.

A good loan officer would have NEVER told you to borrow the down payments on your credit cards. They would have told you to not even USE your credit cards let alone take out a substantial amount on them.

That loan officer you spoke to is probably starving to death, has mortgage payments of their own to make and is likely hurting for money. I see many loan officers throwing up "Hail Marys" that they would have otherwise turned down. It's very difficult to get loans to close these days and many have a lot of HOPE that they can get some loans to close that they shouldn't even work on.

Long story short, you'll have to go to small claims court to try and collect any money from the mortgage broker. You should talk to the mortgage broker about what you are doing and even mention that you will file a complaint with the Division of Real Estate or whoever controls mortgage brokers licenses there in AZ. He/She may be more willing to work with you when they see the facts laid out before them. Might be a good idea to write them a letter as well.

Good luck! PM me if you have more questions! I'd be happy to help.

Sincerely,

UtahBronco

[justalayman]

Originally Posted by mazook

My question is this... Because I was assured (verbally) by the mortgage broker that there would be no problem with attaining the loan and closing on time I expended closing costs of approximately $3000. Can I recover these funds from the mortgage broker since I would never have entered into any of this without his assurance of completing the purchase and getting the loan in the timeframe I required?

Is there some reason you cannot get the earnest money refunded from seller? I would hope you made the sale contingent on finding an acceptable mortgage loan and a time limit as well. If you were not able to secure financing, the contingency would have allowed termination of the contract and a refund of the earnest money.

If the timeline were so important, your offer to purchase and subsequent sales agreement would have included such contingencies such as the Dec 12 date. At that point, at least the earnest money would not be a problem.

and $900 to acquire the down payment? What kind of down payment are you talking about?

You do not state the reason you could not secure financing was anything to do with the credit card sitaution so not sure of the relevence other than obviously, there were costs involved due to that use.

I have great doubts you would win against the mortgage lender. I have dealt with too many to believe he was so finite in his answers so as to cause him any liability.

[HomeGuru]

Originally Posted by mazook

What is the name of your state (only U.S. law)? Arizona

I had wanted to purchase a condominium as a second home for my family and planned on moving in my son who is a full time student at a University who current apartment lease was to run out the end of Dec 2009. I had done some research and had found that although I qualified for a loan, because it was a condominium, I would be required to put down 20% on the loan. I found a local mortgage broker in early Nov 2008 and after asking him several pointed questions as to whether I would definitely be able to get the loan using funds withdrawn from a credit card for the down payment, and close by 15 Dec 2008, I went ahead and signed a contract with the seller, provided the seller with $1500 in earnest money, withdrew funds from my credit card for the down payment at a cost of $900, paid $350 for an appraisal, $25 for a credit report, and paid $60 for a termite inspection. By the afternoon of 19 Dec 2008, the mortgage broker could not secure a loan through an underwriter and I because I had to find my son another apartment to lease I had to tell the broker to cancel the deal.

My question is this... Because I was assured (verbally) by the mortgage broker that there would be no problem with attaining the loan and closing on time I expended closing costs of approximately $3000. Can I recover these funds from the mortgage broker since I would never have entered into any of this without his assurance of completing the purchase and getting the loan in the timeframe I required?

**A: the down payment on a loan can never be funds borrowed from a credit card. Underwriting criteria forbids this. I doubt you have recourse againt the broker unless misrepresentation and fraud was involved. I suggest reading ALL the fine print in your mortgage application docs.