Can I sue a mortgage broker for negligence in this case?

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I received a contract for my home on March 28. We should be close April 30. On April 28 called my broker to tell me that the buyer does not receive funding. The mortgage broker has worked from a credit report, 120 days (or more) old, if a credit report was pulled in 2009! At the last minute, alleging the bank a credit report (I understand that’s what they do), and discovered a problem. Again, I get this part, but the “problem” is supposed to be a collection item from a dr. That was paid. Both me and brokers are now wondering if the broker failed in its initial assessment and / or why the bank would spend $ on expert opinions, etc., without first knowing if they could get a loan. Something stinks to me. does not seem reasonable. It is many years since I bought this house, but I remember a point or two like that on my credit file. The bank wanted a written explanation and a “paid” the document of creditor. I know that times have changed, but I feel that I had. My dealer said because of confidentiality laws, there is very little we ever know about the potential buyer. Again, but I get this ……??? This house is a simple, nothing extravagant, $ 104K price tag would be obvious that the tax credit to play a lot on the photo to the potential buyer. So now, my window of opportunity is almost closed, the related brokerage within 30 days of supply. I left there and really need to sell this house! Any advice or suggestions? I am ticked!

  1. Reply
    Simpson G
    May 19, 2011 at 3:09 am

    Sure, you can try to sue, but you won’t win. As long as the buyer had a financing contingency in the contract, you have no legal standing.

  2. Reply
    May 19, 2011 at 3:49 am

    You aren’t going to win, just spin your wheels. The mortgage broker is not at all liable for the buyer not qualifying for a loan.

    Depending on your sales contract you may be entitled to retain the earnest money, but you may not even be entitled to that if the sale was contingent on the buyer being able to qualify for a loan.

  3. Reply
    May 19, 2011 at 4:18 am

    Any offer with a financing contingency carries some risk that the buyer won’t be able to get financing and, consequently, the deal will not go through. By accepting an offer that was not all-cash, you accepted that risk.

    You are probably entitled to whatever is specified in your liquidated damages clause, but you would never win against the mortgage broker.

    To show negligence, you would have to prove that the mortgage broker acted in a reckless manner. There are not necessarily any standards to indicate that >120 days would be unreasonable; in fact, since the home buying process can often take many months, that is not unusual at all. Regardless, any negligence on the mortgage broker’s part would be cause for action by the buyer only, not the seller (you).

    Credit reports can change very often. That is precisely why the banks pull a final credit report right before close of escrow.

    The broker did not act negligently, and you certainly won’t get any money out of him.

  4. Reply
    Mr Placid
    May 19, 2011 at 5:02 am

    Do not listen to your realtor.

    First off, what were the terms of your contract?

    If there was no financing contingency, then buyer is in breach of contract, and you are entitled to breach of contract damages.

    The mortgage company is not liable to you. You were not the mortgage company’s client, and the mortgage company owed no duty to you.

    Your only remedies would be against the prospective buyer.

    Your realtor is not a lawyer. (That’s obvious from her statement, “Due to privacy laws….” She’s wrong about that.) If you want to seek breach of contract remedies, you will need to consult an attorney.

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