Lost $1350! Can anything be done?

[Anonymous]

Well just so you know I am working with a reputable loan officer close to home now. She is helping me improve my credit and we will probably reapply in January or February.

However I had a loan officer preapprove me for a loan, I believed him and put $1000 in escro. He continued to say everything was ok and I paid $350 for an appraisal. He had every opportunity to let me know the real state of things before I would lose this money. In the end he could not get the loan. I provided every document he asked for. Nothing that he used to preapprove me was invalid.

Is there anything I can do? Even turn him in somewhere so he doesn't do this to someone else?

Thanks for your help.

[LisaJ]

I am not sure, but here is what I found when going through something similar-

My new lender accepted the appraisal, so I did not incur a new fee.  You can ask about that.  Many times they won't do this, but it is the only way you won't "eat" the previous appraisal, as far as I know. 

Escrow, as far as I know, is  usually done with a title company, and I am pretty sure you can get that money back, though you might be fighting it for awhile, and it depends on the contract you had with the seller...because I THINK escrow is particular to the property and not the LO.  One of the experts will chime in, but that is what I was told.  I transferred my new lender's info to the title company I used and got all of my money applied to the house I bought. 

[Anonymous]

Well unfortunately the seller would not give us more time. He demanded the escrow and the appraisal is no good. I really want to simply make sure the loan officer can not lead someone else as far off as he did me. I would never have made the offer on this house if he had been honest.

[ShanetheMortgageMan]

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@Anonymous wrote:

Well just so you know I am working with a reputable loan officer close to home now. She is helping me improve my credit and we will probably reapply in January or February.

However I had a loan officer preapprove me for a loan, I believed him and put $1000 in escro. He continued to say everything was ok and I paid $350 for an appraisal. He had every opportunity to let me know the real state of things before I would lose this money. In the end he could not get the loan. I provided every document he asked for. Nothing that he used to preapprove me was invalid.

Is there anything I can do? Even turn him in somewhere so he doesn't do this to someone else?

Thanks for your help.

Well unfortunately the seller would not give us more time. He demanded the escrow and the appraisal is no good. I really want to simply make sure the loan officer can not lead someone else as far off as he did me. I would never have made the offer on this house if he had been honest.

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txhousehunter I feel bad for you and your situation but without the full story & all of the details it's impossible to say what went wrong here.  It could very well be that the loan officer lied to you and you were never approved, or it could be something else.

First, what is the reason you were eventually not approved?

Second, why aren't you able to get your $1k earnest money back?  From your name it appears you are in TX, I haven't done a ton of purchases in TX but the several I have done the buyer was able to get their earnest money back even if the loan didn't go at the very last second (meaning they did not have financing contingencies).  Was your offer contingent upon you being approved, and then when you were approved you removed that contingency, and is that why you aren't getting the $1k back?  Or is it something completely different?

Third, what type of pre-approval did you initially get from the loan officer?  Was it an automated approval?  Was it a pre-approval after an underwriter reviewed all of your documentation?

[Anonymous]

I had a letter from the loan officer that I was preapproved for $150,000. The house we offered on was $129,900. The contract was extended once for 2 weeks. I passed the date my realtor put for being approved for the loan, the loan officer assured all of us, my realtor, the sellers realtor and even the lady at the title agency that all was well. The only thing he told me at the end of our communications was that we could not make this one work.

[DallasLoanGuy]

do you have a realtor?

is there a financing contingency on the contract?

[ShanetheMortgageMan]

What did the pre-approval letter say exactly?  Every word on it could be important.  Was it subject to anything?

By law you are required to get a "letter of credit denial" if you aren't able to get approved for a loan, and on that form (it says it's a letter but it's just a form) it'll have a check box marked next to the reason you were unable to, and maybe even an explanation.  It should be mailed out within 3 days of getting declined.

You should be able to get an exact reason from the loan officer via a phone call or email though.  If not, then he doesn't cut paychecks to himself, so he must have a supervisor/manager that you can talk to and find out as well.  "We could not make this work" could mean 1 of a gazillion items.  You don't know if you weren't able to be approved because of something on credit, something about the home, etc.  So I can't really say if you have a legit case or not.  Without knowing the full details what are you going to say to the agency that governs/administers the loan officers licensing?   What you have written here is a start, but when filing a formal complaint you need to have exact details or the complaint won't have much basis to go on. 

If the loan officer has a Texas originators license, and the transaction was for a mortgage in Texas, then http://www.sml.state.tx.us/ would be where you'd want to start.  But he could have Federal licensing from the OCC, OTC, etc. so you'd need to first find that info out or you could waste your time by filing a complaint with a department that has no jurisdiction over the loan officer. 

[Anonymous]

Ok, it is a conditional qualification letter for 130,000. It lists the loan officers name and a license number, interest rate of 8%, FHA, 97%, it states that he has looked at my credit application and credit scores/reports, it states that my financial status and credit must remain the substantially the same, that I needed to supply all documents needed and that the loan must remain available to the market. I never got a denial, he just won't contact me.

As for the offer to be contingent on the loan being approved, it was for 21 days, my loan officer assured us that we would be approved when we were passing the 21 day period.

[ShanetheMortgageMan]

Hmmm, well the part that might save the LO's butt is the part that reads "... that the loan must remain available on the market."  Lenders have been eliminating their FHA programs for people who have lower scores (under 580 but some lenders have higher requirements), so if your score was low, and the program that you were pre-approved for increased the FICO score requirement to a level above where yours was, that would be why you were no longer approved.  It wouldn't be the loan officers fault unless they were notified about certain deadlines that had to be met (loan needs to be submitted, locked, funded by certain dates) and didn't adhere to them, or notified you about them, but if all of a sudden one day the program was available for a certain score and the next day it wasn't, the loan officer has no control over.  How do you know if that happened or not?  Well you'd have to ask the loan officer or someone else in the company, if they were brokering it then perhaps even contract the wholesale lenders program who supposedly changed it's requirements.  It'd be difficult to disprove without cooperation from other parties.

Now the part that really does piss me off is the fact that he won't return your phone calls or communicate anymore.  Even if it wasn't his fault, he sure is acting like it was.

[Anonymous]

Yes it has bothered me too. He won't return email or phone calls, and he never answers my phone calls. My new loan officer is from the town I live in. Hopefully the realtors will work with me again! (When I save the money I lost)

Thanks