In default of Purchase Agreement??

**dab28** · 04-24-2008, 08:59 PM

I have quick question.

My wife and I, both signed a purchase agreement with a builder in the Indianapolis area. Their preferred lender ran our credit and told us we were not able to qualify for a loan together. But that my wife might qualify for the loan by herself. I had a few charge-offs and a tax lien on my credit. We got another lender to say the same thing.

An FHA loan was our (her) only option, but this required my name to be taken off the purchase agreement (they called it a technicality). Sounds like a new contract to me. We decided that if we both didnt qualify we could walk. The builder is now claiming we defaulted because we didn't take the option to purchase under my wifes name only.

Their preferred lender refused to send a denial letter to the builder for us as a couple stating that its because he didnt take my w2s and paystubs at her appointment (but he still ran my credit). Sounds lame to me. But he did voluntarily send a pre-approval to the builder in my wifes name only. I am getting ready to get a lawyer and take it to the lender and the builder. Any advice??

**Dallas Broker** · 04-24-2008, 11:33 PM

sounds like you definetely need a lawyer. If you had a buyer agent, there might be some other options, but without one you have no one working for your best interest.

Did you place earnest money down on property? If so, what is the builder's policy on default and return of Earnest Money? Was there a third party financing condition addendum included in contract? If so, does the addendum include both you are your wife?

**Mike Taylor** · 04-25-2008, 05:28 AM

Dab -

I am in the Indy the area too. Without seeing your contract it is impossible to say, but as lame as it may sound the builder is probably correct. Builder contracts are written to protect one person...them. If you want to contact me, I will look over the contract for you and see if I can find something.

**JJohnson1985** · 04-25-2008, 05:31 AM

Ok, so you and your wife signed the agreement correct? Both you and your wife together do not qualify for a loan. Does the contract include a clause that make the purchase contigent on financing? If so then you are not obligated to buy but it depends on the contract. It may only require one of you to be approved and not neccessarily both of you. Like Mike said it depends on the words in the contract. He is right, builder contracts are only there to protect them.

When they took your name off it, it is a new contract from what I understand. If your wife did not sign a separate one with only her name, then I believe you are not obligated to purchase. Also, did she sign anything agreeing to taking your name off the original agreement while keeping the terms of the original intact? If they just took the original and after both you signed it erased your name without your wife agreeing to it, then I believe you are not bounded by it.

This is just my opinion and understanding, and I am not licensed. One thing though is that you NEED an attorney and get his/her input.

**Mike Taylor** · 04-25-2008, 05:34 AM

Originally Posted by JJohnson1985

Ok, so you and your wife signed the agreement correct? Both you and your wife together do not qualify for a loan. Does the contract include a clause that make the purchase contigent on financing? If so then you are not obligated to buy.

Have you ever read a builders contract???? In theory you might be right, however most builder contracts clearly state that if one or the other can qualify on their own then you must go through with the purchase.

**dab28** · 04-25-2008, 05:37 AM

Yes, we put $500 down in earnest money and foolishly signed the contract. But, the contract states they can claim up to $5,000 in liquidated damages if we default and is contingent on financing, passing inspection and home appraisal. The clincher is WE could not get approved in the 15 day time period and per the agreement, get our earnest money back. We used their preferred lender and our lender. The contract doesn't say one buyer or the other can qualify. And for the same reason, they know FHA won't fund the loan if my name is on the contract. I told them ifs its just a technicality, leave my name on it. But they know, I CAN NOT GET APPROVED FOR ANYTHING. This is why they are pressuring us to come in and sign an addendum to take MY name off, which we haven't seen. And they can't hold ME, personally in default because I can't get a loan. So I think they are really going after my wife.

The lender knows he screwed up when pulling my credit (though we got a denial from the other lender w/o sending w-2s and paystubs) and he is saying he can't do the same. But he helped out his good buddies down at the builders who solicited the approval in my wifes name. Its no good if I don't take my name off the purchase agreement and last time I checked, no one can force me to do something. I got two unofficial emails from the loan officer where he admits that he wouldn't be able to get us approved together and then he said "your wife indirectly suggested that she wanted me to qualify her for the max, so i sent the approval to the builder for her only because I felf comfortable that she still wanted to buy". Now this puts us in this situation and he is now back-paddling. This loan officer and builder are working a good scam.

**JJohnson1985** · 04-25-2008, 05:39 AM

Originally Posted by Mike Taylor

Have you ever read a builders contract???? In theory you might be right, however most builder contracts clearly state that if one or the other can qualify on their own then you must go through with the purchase.

LOL, yeah I edited my post with that statement. It may say that only one of the parties need to qualify. But if it doesn't, then both would need to qualify and since they do not, this would free them from the obligation. It's worth a shot to look at this in the contract. We seem to be typing at the exact same time, good morning by the way

**JJohnson1985** · 04-25-2008, 05:45 AM

Originally Posted by dab28

The contract doesn't say one buyer or the other can qualify. And for the same reason, they know FHA won't fund the loan if my name is on the contract. I told them ifs its just a technicality, leave my name on it. But they know, I CAN NOT GET APPROVED FOR ANYTHING. This is why they are pressuring us to come in and sign an addendum to take MY name off, which we haven't seen.

The lender knows he screwed up when pulling my credit (though we got a denial from the other lender w/o sending w-2s and paystubs) and he is saying he can't do the same. But he helped out his good buddies down at the builders who solicited the approval in my wifes name. Its no good if I don't take my name off the purchase agreement and last time I checked, no one can force me to do something. I got two unofficial emails from the loan officer where he admits that he wouldn't be able to get us approved together and then he said "your wife indirectly suggested that she wanted me to qualify her for the max, so i sent the approval to the builder for her only because I felf comfortable that she still wanted to buy".

DO NOT SIGN THAT AGREEMENT! Also, so you and your wife never said anything about looking into a loan just under your wifes name? The loan officer just took it upon himself because he believed that your wife still wanted to purchase? Where did that belief come from?

**Mike Taylor** · 04-25-2008, 05:46 AM

@ JJohnson - Good morning to you...how is Ohio treating you today. Indy has beautiful weather...finally.

@dab28 - I don't know without seeing your contract, but I certainly wouldn't sign anything taking you off the contract. Most builders don't want to make people buy a home who don't want to. What builder is it?