     Laurie Gambrell (Zeromus) | Monday, August 07, 2000 - 11:39 am 
We are selling our home and had a contract with a buyer who had a pre-approval letter from a mortgage broker. The letter said the pre-approval was based on a completed loan application, an in-file credit report from CBR, income information, and checking/savings information. The letter also said the final approval was subject to an appraisal and any additional underwriting criteria. For completely unrelated reasons the buyers got mad and wanted to terminate the contract. The only contingency in the contract was a financing contingency. The contract said if the buyers were unable to obtain financing within 30 days, the contract was terminated and the buyers retain the earnest money. One week before the 30 days expired the buyers agent informed us the deal was off because the buyers' loan was going to be rejected. Six days later (one day before the 30 days was up) we got a fax of a Statement of Credit Denial dated that same day from the buyers' mortgage broker. The reason given was "insufficient income". Is something unethical going on here between the buyers, their agent, and the mortgage broker? Does anyone have suggestions on how we should proceed. |
| Senator (Senator) | Monday, August 07, 2000 - 12:16 pm
I have a feeling that as the underwriters looked at the deal they felt that there was insufficient income. From what I have gathered at a website called grapevine (somewhat of a mortgage symposium) this tactic can be common given the turmoil of lenders.
It is unfortunate if true. good luck |
| Christine Baker (Admin) | Monday, August 07, 2000 - 03:29 pm
There could be a lot of things happening, and there's not much you can do. They could really not qualify, or they could have asked the broker to produce a lender decline.
I've never seen a pre-approval that didn't contain the "no change in financial condition" clause. If all else failed, the buyer could quit the job, buy a financed car, spend the downpayment at the casino, etc. to cause the decline.
It might be unethical, but I doubt there's anything you can do.
I really think it's not in anyone's interest to force a sale. You don't say what those "other" reasons were, but if you can't work things out, you're better off giving them the money back and finding another buyer. |
