mortgage denial

[pokazgirl]

What is the name of your state? nj
I was going to close on a house on fri. I had a mortgage commitment in my contract then 2 days before the closing I received a mortgage denial. My lawyer is trying to talk me into applying for another mortgage. She is saying cause it may not go smooth.
I have 16000 in an escrow account.
Can the seller sue me?
I dont wanna apply for another mortgage. I was denied a mortgage for a reason. What should I do?

[lcannister]

What should I do?

Hope that there is a financing contingency in your contracts so that you get the deposit back.

[justalayman]

as lcannister posted, hopefully you have a financing contingency in your sales agreement. If not, you can kiss at least some of that $16k goodbye.

Even if there is a contingency in th contract, if you intentionally did something to confound the mortgage offer, you would still be on the hook for losing some or all of your earnest money.

If you are allowed an out due to a contingency, and you cannot perform as the contract requires (closing by a particular date for example), then you either will have to extend the contract dates (along with the other party if they are agreeable) or you must formally withdraw your offer to purchase. That is where things get sticky and as your lawyer said, it may not go smoothly. If the end date cannot be met, you cannot be forced to extend that date BUT that does not mean the selllers will give up your cash without a serious argument. Sometimes these arguments end up in court before the earnest money is returned.