Can a mortgage company rescind a sale after closing-Ohio.
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Can a mortgage company rescind a sale after closing-Ohio.
We sold our parenr’s assisted Living. After closing my brother received a letter
from their broker saying the mortgage company said the house wasn’t supposed to
valise due to poor debt to inone ratio on part of the buyer. The say the funds need
to be wired back to the title company within 72 hours. The house closed. It’s not our
fault they didn’t complete their due diligence.
Asked on October 6, 2017 under Real Estate Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
They could rescind the loan if the buyer committed fraud: that is, misrepresented, or lied about, something material to get the loan approved; for example, if the buyer provided fact tax returns to show a higher income than they in fact had. Fraud is legal basis for rescinding a transaction. However, if fraud were not committed and the problem is, as you suggest, that the bank did not do their due diligence, that is the bank's problem, not yours: they may wish to fire whomever approved the loan, but have no basis to rescind the loan. An error or mistake by one party does not let them void an agreement or transaction.
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