About to lose my earnst money???

**jnzy111** · 05-14-2009, 12:03 PM

I just had a deal that fell through.

I put a deposit down of $1500.

The lender said nothing about a problem lending when they knew I already had 4 mortgages.

My Broker said they could now do up to 7 loans, I already have 4.

After about 45 days and after contingencies were removed, the lender suddenly says they cant loan because I have 4 loans out already and they cant lend due to that reason.

The selling realtor is demanding I sign a forfeit of deposit form and release of contract and they now have cash offers over asking on the property.

I don't want to give in so easily since it was not my fault.

Couldn't I seek mediation on this and try to get my deposit back?

---Mike

**RedCarpetSchool** · 05-14-2009, 12:18 PM

This is a sticky situation; the seller really does not have to give the money back if the financing contingency were waved. It will cost even more in legal fees to get anything out of the lender to replace the Earnest Money. If you can prove negligence on their part. If an Escrow Company is holding the cash then you can start arbitration and stop the money from being returned. This will require that the P&S be reviewed and scrutinized to see the validity of your claim and the Sellers claim to the right to the Earnest money. Remember that you may need to get a Lawyer to help with this if it starts to go in the Sellers direction for the validity of the contract.
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**Greg** · 05-15-2009, 06:12 AM

Why did you remove the loan contingency before you had your loan in place?

The answer to your question is in your contract.

**Thesa** · 05-15-2009, 07:19 PM

Greg is correct the answer is in your contract - and none of us that are not attorneys can truly give you the answer but we can help you find the answer without giving legal advice.

It sounds to me like you were writing your offer when this limit was not in place... and the loan guidelines changed... they have changed again and many lenders will allow more than 4 loans again... so you may be able to still purchase... check with your lender again now that the guidelines have changed again...

**plumberdude** · 05-16-2009, 12:00 PM

wow bummer dude

**fmike630** · 05-16-2009, 05:16 PM

the financing contingency and submitted an approval letter it is going to be difficult.

Are there any other clauses for you to get out of the deal, ie inspection clause.

Your broker is not the lender/bank and no matter how many loans a bank could do or not do is up to the bank.

Did you have a pre approval letter or a commitment letter from the lender?