Thank you for your question. I look forward to working with you to provide you the information you are seeking.
Unfortunately, the loan brokers and the underwriters often seem to differ on what is acceptable and what is not acceptable. I just finished a case with a client where they told the client they needed paychecks and proof of employment. The broker told the client that any checks from the employer were sufficient, since it was a new job and they were relocating to take the job which was the reason for buying the house. The client presented copies of the signing bonus check and the payment for moving expenses. The broker claimed it was sufficient, the underwriters argued that it was not sufficient and refused the loan. We spent over a month arguing with the underwriters and supervisors to get the loan approved.
I mention this to you to illustrate that the broker may honestly believe something is sufficient and depending on what underwriter takes the documents each underwriter may insist on different things. In your case, you could fight the underwriter and seek the approval.
However, if you are rejected and cannot get the underwriter to approve the loan, if your contract had a mortgage contingency clause, then the seller should indeed be releasing your deposit on proof you did everything you were supposed to do to try to obtain the mortgage. The denial letter should also accurately reflect the amount you were rejected for and if they put a higher amount it is up to you to now get them to correct that letter. However, if you were denied your loan despite you making good faith efforts to obtain the loan, then your seller is legally obligated to return the escrow if you had a mortgage contingency clause.
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