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Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 5436
Experience:  17 years of legal experience including real estate law.
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My son applied real estate loan thru a credit union and was

Customer Question

my son applied for a real estate loan thru a credit union and was told he could
qualify for a home valued up to $180,000. He was told his credit score was 660
at the time he applied. He eventually found a home with the help of a realtor. He
signed a purchase contract Feb 4,2016 and closing was set for march 10th in
Phoenix, Az. On march 4th my son texted me stating the mortgage Co advised him
that the loan would be approved on the following Monday march 7. On monday march
7th my son told me the mortgage co. ran his credit before closing and said a late
payment was reported by a credit card company thus lowering his credit score to 558
making him ineligible for the loan. The mortgage company spent 2 days trying to figure
out how to help my son raise his score. he paid off the credit card company that reported
the late payment. then was then told that may not help. He and his realtor asked the owner for a 10 day extension of the closing date March 10th. the owner responded stating
my son would have to forfeit his deposit of $1700 and would have to pay $1.400 more
for closing. My son decided that was too hard to do. The mortgage Co decided that day
March 10th to deny his loan because of his credit rating. Now the seller wants keep all of
his deposit of $1,700. My son was never told by his realtor or mortgage 3 days before
March 10th that he would not qualify for the loan. What can he do?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Did the contract have a mortgage contingency clause?
As far as the bank, you realize the loan promise is not a guarantee until the underwriters sign off on it, so what happened here is not uncommon, so your action is against the seller and will be based on the wording of the sales contract and any contingency clauses?

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