Posted by Max-Va on June 09, 2006 at 10:39:35:
I am not an attorney, so consider the source.
Mortgage Brokers usually will give out a pre-qualication letter. This is not to be confused with a pre approval. Most of these letters are not worth the paper it is printed on. The denial can be for many different reasons; terms, credit, the property are just a few.
My opinion just move on to the next buyer.
Mortgage Commitment Gone Bad - Posted by Susan Vadenais
Posted by Susan Vadenais on June 09, 2006 at 09:02:43:
We signed a purchase & sales agreement with a buyer. She had approximately 3 weeks to obtain a formal mortgage commitment.
My real estate agent received a written confirmation from the buyer’s mortgage broker, only to learn a week later that she was denied for a mortgage.
Do we have any legal recourse against the mortgage broker?
Re: Mortgage Commitment Gone Bad - Posted by BTL
Posted by BTL on June 12, 2006 at 09:40:45:
Susan
The words obtain a formal mortgage commitment are worth about two cents. And preapproved is only important to me when the offer is being presented.
Teach your agent to change the contract to read buyer shall obtain the necessary financing within 30 days or seller shall be entitled to keep $_____ of the deposit and terminate this contract. (the cost of effectively taking my property off the market)
Yes some buyers object but a serious buyer should have been preapproved already, based on a completed honest application. The only thing that should blow the financing is the property.
And if a mortgage broker told me someone was preapproved and then couldn’t get financing for them, that mortgage broker would be on my list of people not to be involved with in the future, I expect them to deliver, oh,I know there is an occassion glitch but pro’s come through.
BTI
Re: Mortgage Commitment Gone Bad - Posted by River City
Posted by River City on June 11, 2006 at 12:47:42:
Max is correct. Some people confuse the term “preapproved” with “prequalified.” Lenders generally prequalify an applicant based soley on the information provided to them by the applicant. The real approval comes once this information has been verified, and this usually takes time, especially if the applicant has real problems. This is why the realtor put in the contract that the applicant had three weeks to obtain a formal mortgage commitment.
Find another buyer. The broker was just doing his/her job.