Can I sue a Mortgage Company?

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Can I sue a mortgage company
We made an offer to buy a house in southern California so I let the lender know so he can work on the loan. I give them every single document they ask me for. I paid for the Appraisal but I think they never send the Loan to the Underwriter since every time I ask them to show me something to make sure they actually send the Loan file to the underwriter. They just tell me don’t worry about it we are going to get the approval today or tomorrow but this is the same answer i get for the last three weeks. And the due date to close escrow is 10/29/10 and i afraid that the bank wont give us an extension since we don’t have the underwriter approval yet and we already give the escrow company $ 5000 plus $ 485 from the appraisal. or what can we do to get the money back.
The Loan is FHA and is a Short Sale.



  1. Reply
    February 9, 2011 at 3:29 pm

    Nothing in your statement indicates that there is a basis for a law suit. If underwriting hasn’t cleared your loan approval there may be a problem but it is most likely something to do with your financial situation and not lack of submission. You haven’t even started dealing with the bank on the shortsale, thats usually where you run into delays and or cancellations. Purchase of these type properties do not go as smoothly as a normal sale.

  2. Reply
    Caveat Emptor
    February 9, 2011 at 3:50 pm

    Nothing you state sounds like grounds for a lawsuit. Many loan applications are delayed – for a variety of reasons. It’s not unusual.

  3. Reply
    February 9, 2011 at 4:22 pm

    Hopefully your Residential Purchase Agreement contains a loan contingency (Pg. 2 H-2). Generally here in CA that loan contingency remains in effect until you remove it in writing regardless of the time frame given (see paragraph 14). That said, you will likely not run into problems getting your $ 5000 deposit back from the escrow company.

    You could sue the mortgage company but chances are it won’t be worth it and you may not have more than $ 495 in damages plus you’d have to prove they were negligent. I would stick it out if you want the house, chances are that it will be fine and there is a team of people working to get this done for you. As far as the lender is concerned, no loan is final until it’s funded because the bank reserves the right to not make the loan unless all the conditions are met.

  4. Reply
    February 9, 2011 at 4:35 pm

    The short answer is yes. If you have the filing fee you can sue anyone you please.

    But do you have grounds to sue is another story. You haven’t been harmed so what is the basis of your suit?

    Here’s what I’d do. Call the processor, not the loan officer. Ask nicely when you’ll get a decision. Very very nicely. If they say they don’t know, say, “Do you think you’ll know by 2pm? I’ll call back then.” And call back at 2pm. “Do you think you’ll know by 5? I’ll call back at 5.” A day or two of this, and the processor will start nagging her supervisor who will call the underwriter or her supervisor and you’ll soon get an answer. The key to this is that you have done everything you’re supposed to have done, only told them verifiable facts, and are super super nice about it. If you get snotty or demanding…there’s always something that would allow them to decline your loan.

  5. Reply
    the kid
    February 9, 2011 at 4:44 pm

    Short sales can take months. Patience. There is nothing to sue for.

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