Do I have the right to go after a financial institution due to its negligence which will prevent me from purchasing a house that I was supposed to buy?

UPDATED: Sep 30, 2022

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Do I have the right to go after a financial institution due to its negligence which will prevent me from purchasing a house that I was supposed to buy?

I applied for a mortgage and the lender pre-qualified me for an USDA loan. The lender gave green light for me to make a bid. After I found the house I wanted I got an approx. of what my monthly payment would be, which fit into my budget. Sellers accepted a percentage of my closing costs that my realtor asked for. Earnest money has been paid. Lender went on vacation with no way to be in contact. Their manager took over my application only to find out that I do not qualify for the USDA loan. Manager qualified me for a different loan, which the monthly payment is out of my price range. I will most likely lose the house.

Asked on December 24, 2015 under Real Estate Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

No, they are not liable for this. First, lenders do not have to lend to you, and you have no guaranteed right to a loan; hence, there is no liability for failing to lend to you, or not making some particular kind of loan. Second, the pre-qualification is not a guarantee of or commitment to a loan; it is just a statement that a preliminary (not final) review makes it appear you could get a loan. Third, no loan is final until aftet underwriting and you get the actual loan approval or commitment. Foueth, ultimately it is your own finances that wil cause you to not get the applied for a home you could oly afford if you got one particular kind of loan, instead of one you could afford with any mortgage.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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