Can a lender "change their Mind" on a loan approval?

[chick7t7]

What is the name of your state?What is the name of your state? California
On 5/12 we applied for a cash out refinance. Daily, the broker called needing more information for the lender.
Finally on 06/15 the broker called and said we had been aproved.
The next day the broker called and said the lender made a mistake and we were declined.
After scrambling to find a new loan, on 06/17 we received papers dated for 06/16 (the very day we were declined) from the "Executive Vice President/Chief Operating President congratulating us on our loan approval. With it was a Good-Faith Estimate, Truth in Lending, Impound Authorization, Discrimation Act, Merge Report, and Servicing Disclosure.
Does the lender have some sort of legal obligation to fulfill this loan?
His reason for approving us then declining us was because he did not know we were in the foreclosure process. T
The only reason why we were getting this loan.
Now 6 weeks later the offers I had from other lenders are no longer available.
Nothing has changed from the day we applied to date. We have the income, and LTV @79%.
Now I am left with nothing. Possibly no home and loose my business. Does the lender have a legal obligation to fulfill this loan?
Thanks for advice.

 

[wanabath]

No.
You most likely would have had the same problem with "all the other brokers that had great rates for you."

What are your fico's???

Going through bk, how far are you through the process. I do not know your situation, but lets be honest with each other wpuld you want to loan money to someone that is going bk? The banks do not want to deal with possible foreclosures, its not their business.

 

[Souix]

No.
You most likely would have had the same problem with "all the other brokers that had great rates for you."

What are your fico's???

Going through bk, how far are you through the process. I do not know your situation, but lets be honest with each other wpuld you want to loan money to someone that is going bk? The banks do not want to deal with possible foreclosures, its not their business.

***I read the OP's post twice and I don't see where they said they were filing BK. They said they are in "foreclosure", thats two different things.

To the OP, your credit scores could have been too low for the loan you were applying for due to your foreclosure. Banks will typically not lend money to poor credit risks and they possibly thought you were a high risk because of the foreclosure. It happens.

Why not just put your house on the market and try to sell it before it goes back to the bank?***

 

[HomeGuru]

I agree with Souix.

 

[rainmand]

There is a loan program that's designed specifically for folks in your situation. The lender uses MOP (Mortgage Only Program) to qualify folks, so the derogatories on your credit report don't impact you (no FICO scores are used). If you're less than 180 days into the foreclosure process, and it's an isolated FC, and you're not currently in a BK, I can refinance your house but the LTV needs to be 60. Also, the loan needs to be Full or Easy documentation. Stated Income isn't when you're currently in the FC process. On a scale of A+ to D, this particular loan is rated D and as such costs the most in points/interest. 12 months after you've been out of the FC you'll move to the C bracket, 6 months later you'll move to B and 6 months after that you'll be A again and able to receive the best rates/interest.

Raymond
Bankruptcy Loan Officer

 

[amortgageman]

Spamman,

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Besides that a mortgage only program is for good mortgage histories and low credit scores.

A credit score only program may offer better relief.

 

[Souix]

Oops Rainman you have just violated the rules of this forum. You should have emailed the OP or sent a private message.

 

[HomeGuru]

I guess you guys rained on his parade.

 

[amortgageman]

It would be much better if it was actually somebody, other than a lenderlab lead generation service.

 

[HomeGuru]

It would be much better if it was actually somebody, other than a lenderlab lead generation service.

**A: yes, sometimes those services are for the dogs.