A customer I was doing a loan for had their house under contract for 3 months only to find he was provided with:
- False preapproval letter from their unethical lender friend at the offer in Jan 08
- False commitment letter from the same guy in #1 on commitment date March 08
- The buyers had no way of obtaining a loan commitment through ANY lender they tried after extending the commitment date.
- The buyer's/agent's plan was to keep the house they wanted off the marketwhile they worked on repairing the credit with hopes of qualifying and saving enough money before closing.
- During this time the house was under contract, the market worsened in this area
Now the house is active again, looking on the MLS like it's been on the market for a long time even though it was under agreement. My customers expect to sell for less as now they don't have time to wait.
The sales contract limits the damages for breach of contract, including if the borrower provided false information to the sum of deposit monies paid. $5,000 was paid so far with another $5,000 due soon.
If my customer ends up losing $50,000, due to fraud by the lender, with the borrower and agent likely having unclean hands as well, is that the name of the game? It seems Lenders and Realtors should to be accountable as licensed professionals.
I hear this happens often. It sickens me for what it does to people lives and our reputations. There was no way to know these documents were false and no way to know when you have a buyer with a BIG NAME lender and a No Name Realtor, their history.
My customer wants to hold the parties legally responsible for all damages and will be in touch with an attorney soon. Does the PA Realtor sales contract give a seller any recourse in any way?
Does anyone have first hand experience in sellers going after the deposit money, plus damages?
My seller, a FSBO paying the licensed buyer's agent 3% commiss, isn't happy about what happened not only because of the money and time he lost but because he really trusted the buyers and their Realtor, invested a lot of time with them, went through all the inspections, etc, did all his homework plus more, and was ripped off anyway.
Thank you for your input.