Escrow Deposit Refund

[pmurph]

I had an escrow fall through because of some credit conerns that did not meet FHA lending criteria. I was prequalified but a later credit check revealed some credit questions the first one didn't. These credit issues were the result of a third parties failure to do "their part". The seller is now threatening to sue me unless he can keep the deposit. I (and my lender and agent) see no reason for him to keep the deposit since I did meet FHA guidelines (which inturn would nullify the escrow instructions) and since I did not "back out" or cancel just for any reason. Any ideas or thoughts on this? Thanks

 

[BettyB]

Sure. The agreement you signed with the escrow contained conditions -- probably stating you could get the money back if you report that you could not get a mortgage within 60 days. If you didn't, and did report, you're entitled to the money back. If you told him on day 61, you have a problem....