First time home buyer having bad luck

[Griffzan]

What is the name of your state? Michigan
Forgive me if this question has already been answered. My fiance and I recently started the process of buying a home only to find out that my credit was worse than I forsaw, so we inlisted the help of her father as a co-signer, with just her and her father as a co-signer. Upon signing the loan papers and being approved the info was sent to the underwriter (for in my limited knowledge can only be for final approval) where my (father-in-laws) bank info and so forth was "red flagged" and sent to the IRS. Something I thought was against the law (regarding a non-discloser act or third party discloser) as a result alot of questions arose regarding his banking info, where he gets his money (he owns his own bussiness) and so on. Long story short this made him uncomfortable and he backed out of the deal, before anything was finalized. Then decided to go with a independant realtor and mortgage broker, on his own where he was approved no problem. Big problem is now the original realtor who is the sellers daughter and the original mortgage broker who is also related to the seller are now threatening legal action, also making it impossible to get the "home of our dreams". My fiance recieved a very disturbing phone call from the realtor stating that her (my fiance's) father offered a much lower price to the seller than was agreed on by us (my fiance and I) and it was accepted, where she then explained it was against the law and she would "tell him (the seller) not to sell to us" (direct quote). My questions are, Do we (us or my father-in-law alone) have any legal recouse, and also are any of her threats founded in truth or just that, threats? Possibly to get us to raise the offer? The realestate market in mich is not doing that well and seems to me have pushed some people into corners and we all know what happens to animals in corners. In any event any response would be helpful even if it's bad news.

 

[Gadfly]

Did your original loan get denied or approved? This makes a huge difference in the answers you'll get.

Mortgage lenders are rerquired to report anything that appears illegal to the IRS.

Your FIRST home dosn't need to be your "dream home."

As for your credit. You can now get your free credit report from each of the major reporting agencies once per year. Do this, then find out what your weakness are and work to FIX your credit standing. Get to the point where you can get this house based on you and your wife. You'll feel much better not owing anyone any favors.

 

[BRN2005]

Home Buyer

"red flagged" and sent to the IRS. Something I thought was against the law (regarding a non-discloser act or third party discloser)
Amongst the papers that you sign when applying for a home loan, is a release for the IRS. Most of the loan applications are not verified with the IRS; only those that are questionable or the random ones that get drawn for verification. Apparently, the first one your FIL did was flagged, but the second was probably not.

In my experience, most "Offers to Purchase" include a clause that the deal is contingent with loan approval. This being the case, you were not obligated to go with the first realtor, the first mortgage broker, etc. However, if the property was listed with the realtor and the buyer (your FIL), found the property due to the realtor's listing, the realtor is still entitled to commissions, even if you go around her and go directly to the seller. My guess is that your FIL offered less for the property, excluding the realtor commissions.
Even if the listing is withdrawn or expires, there is still a period of time (maybe 3 months), where the realtor remains entitled to the commission, in this type of scenario. I thought you said the realtor is the sellers' daughter?? Is the seller trying to screw his/her own daughter out of commissions?
I don't know how much lower the price was that the seller "Accepted" (was this verbal or in writing?), but if it was considerably less, you should still be able to go through the realtor (since she is entitled to the commission anyway), and make the deal for the amount the seller was willing to accept, plus the amount of the realtor fees (since they have to be paid anyway). By doing that, you would still be paying the same amount, the sellers daughter would not be furious with his/her parent, and you would have the benefit of the realtor's knowledge with the remainder of the closing process and paperwork.

However, unless things are much different where you are, you should be in no way responsible to the original lender, unless there was an application fee that remains unpaid. That should have been collected with the application (if one did exist).

 

[Griffzan]

One more

One question remains. For added info the house was listed at 100,000 and we originally were sort of "tricked" into offering asking price (being first time home buyers we were not sure when our offer should have been put forth) and my FIL offered 85,000 and was verbally agreed upon. Where in the picture does the original realtor come in after him being approved for the loan, is there a way around using her as the realtor or are we stuck with someone that is only interested in a commission.

 

[Griffzan]

One more

One question remains. For added info the house was listed at 100,000 and we originally were sort of "tricked" into offering asking price (being first time home buyers we were not sure when our offer should have been put forth) and my FIL offered 85,000 and was verbally agreed upon. Where in the picture does the original realtor come in after him being approved for the loan, is there a way around using her as the realtor or are we stuck with someone that is only interested in a commission, and is there any recourse if she tries to keep us (him) from getting the house.

 

[seniorjudge]

One question remains. For added info the house was listed at 100,000 and we originally were sort of "tricked" into offering asking price (being first time home buyers we were not sure when our offer should have been put forth) and my FIL offered 85,000 and was verbally agreed upon. Where in the picture does the original realtor come in after him being approved for the loan, is there a way around using her as the realtor or are we stuck with someone that is only interested in a commission, and is there any recourse if she tries to keep us (him) from getting the house.

How does one get "sort of tricked" into making a full-price offer?

 

[Griffzan]

We did not fully understand the papers that we were signing where for the full listing price of the house.

 

[seniorjudge]

We did not fully understand the papers that we were signing where for the full listing price of the house.

That is not being "sort of tricked"; that, my friend, is called wilful ignorance.

 

[Griffzan]

Maybe so but when all the papers where being run by us we were told over and over that nothing was final, and we were not being "tied down to anything yet" And I have all the respect in the world for Senior members and moderators but when does insulting someone qualify as helping?

 

[seniorjudge]

Maybe so but when all the papers where being run by us we were told over and over that nothing was final, and we were not being "tied down to anything yet" And I have all the respect in the world for Senior members and moderators but when does insulting someone qualify as helping?

As far as I can tell, no one has insulted you in this thread.

 

[Griffzan]

I apologize if the "willful ignorance" was a legal term I'm unaware of but the question remains can she legally stop us from purchasing the home and is there any way around her.

 

[Gadfly]

We have no idea what your contract says, I've tried but I just can't see it through the screen. . .I'll try and get that fixed in the next few weeks.

Until then, you need to tell us what your contract or contracts say including dates and amounts. Yes, that means doing something you failed to do at the beginning and that is READ it. How could you possibly put your name on a contract for the most expensive thing you have ever purchased without taking the time to read it? Buyer beware!

This may end up being a very expensive lesson to you. Now tell us what your contract says, NOT what you think is says, and maybe someone can help you.