CanI sue a representative of my mortgage lender for not completing my loan in time forthe closing?

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CanI sue a representative of my mortgage lender for not completing my loan in time forthe closing?

We have given all information asked for and it was presented that we would be able to close on our house today (original date was about 2 weeks earlier). My wife asked multiple times if everything was good from the lender and there was no response. Then the night before closing their representative called and said they needed W2’s. Then the morning of closing hecalled the title company and said all the information was not completed and we could not close. I have a packed house, friends taking off work to help, my wife taking off work, a moving truck rented, and people closing on my house today. What grounds do I have to sue on?

Asked on July 22, 2011 Kansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Normally, there is no cause of action against a mortgage lender for not granting a mortgage (either at all or "on time," vis-a-vis dates for financing in the home sale contract). After all, lenders are not obligated to lend; it's voluntary on their part whether, to whom, how much, under what circumstances, and when they do, and they are typically careful to put language in their applications and agreements specifying that they are not committing to a loan by a certain date.

That said, IF you made--and can prove--multiple attempts to comply and clarify status and they never responded to you, you *may* be able to show that in that case, you incurred significant costs and liability in reliance on their representation (though it's tougher when the "representation" is actually an omission, not an affirmative representation) that you'd get the money on time. At the least, that is a ground worth discussing with an attorney--who can also review all the paperwork, to see if there was any enforceable committment in there--to see what recourse you may have. Good luck.


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