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Ask Tina Your Own Question
Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 5436
Experience:  17 years of legal experience including real estate law.
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Recently I had applied mortgage home and was given

Customer Question

Recently I had applied for a mortgage for a home and was given a prequalification letter and told I would be able to get a mortgage. So I got a home under contract and paid a 2500 dollar deposit. The mortgage process started over 40 days ago. This friday the 10th of July is the deadline for me being able to purchase the home at which point the sellers bank has a lei on it and will not lift it.
For the last 40 days i was told everything would be fine and was even emailed a conditional approval for the loan upon me submitting a few letters and documents that they requested. I submitted the requested documentation and of course I took this seriously and felt comfortable that I had the mortgage. Only to find that every time I submitted something, the underwriter would find something else to ask for. A couple of weeks later I was told that the conditional approval that they gave me was a mistake. it was a template that they mistakenly sent me.
My realtor, the sellers, the sellers realtor and I have all been led to believe that we were okay. This friday is the deadline. A little over a week ago, again we were told everything was good and that we would be able to make settlement at the latest on the 10th of July. They need a couple of more documents to complete. I wasn't able to get the documents until the end of day yesterday the 7th of july. But I got them to the loan officer and he received them. We have a time set to make settlement friday. I emailed the loan officer today and asked if I should get the utilities transferred to my name for friday. He said to hold off on that for now because he doesn't know if they will have the mortgage complete by then. I have been driven crazy and full of anxiety over this. I have been embarrassed because I have to face all of these people involved being told everything is okay. If friday comes and goes and settlement can't be made, then I will lose my 2500 deposit, the seller will lose there chance to sell there home in which they already moved out of. The bank had a lien on the home. the ban agreed to lift the loan but set a deadline to sell the house. That deadline was already expended once and apparently will not be extended again. I will be humiliated and sick if I have to face anyone or tell them that we can't make settlement.
I am wondering what the laws are and what I can do to sue this company for leading me on and stringing me along for over 40 days when I could have went to another company and not been put through all of this. It seems like a form of bait and switch or just plain lieing to me and ruining my chance of obtaining this home while costing me thousands of dollars in deposit and other costs. It was supposed to be a VA loan so it seems they may be taking advantage and bullshitting the hell out of people by telling them they qualify only to be destroyed and humiliated in the end.
I am in NJ while the mortgage company is in Missouri. The home I wanted to purchase is in NJ as well.
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Attyadvisor replied 2 years ago.
Welcome and thank you for your question. I will be the professional that will be assisting you.
Unfortunately preapproval letters are not a solid approval and it is always possible that the loan will not be approved. Underwriters are notorious for continuing to ask for information right up until the 11th hour which makes all of the parties to a real estate transaction, including the realtors very uncomfortable. That being said, if you feel that this company is engaging in fraud you would want to report this to the State and Federal consumer protection agencies.
As a general rule the real estate contract has a paragraph that is known as the mortgage contingency period. If you do not receive a full loan commitment by the contingency date you would ask the sellers for an extension of time to obtain unconditional approval from the lender.
Can you either attach a copy of your contract or tell me if you requested an extension of the mortgage contingency period?