Legal Question in Real Estate Law in California

Need Help Please....Mortgage Loan Issue..Need advice

I need advice and possibly a lawyer asap. I applied for a mortgage loan on a property in California. I am relocating from Maryland. The purchase price of the home is 399,500. Everything was fine and we were prepared to close when the escrow company noticed the lender erroneously was closing the deal with a purchase price of 390,000.00. The lender has ADMITTED to the error but is now giving me the run around stating the home only appraised for 390,000 (the home has been appraised again for 403K) The lender is stating the loan is in appraisal review. MEANWHILE. I was given the go ahead by this broker to give my 2 week notice at my job in Maryland since it was apparent the deal was to close. What legal recourse do I have if this lender bails out on me. All of my mail and business info has been transferred to the California address in anticipation of the move, I no longer have a 9-5 job here in Maryland and to top things off, I already have a tenant in place for my home here in Maryland. What can I do. THIS WAS THE LENDER OR BROKER'S ERROR....and he admitted it. He did say initially that he would pay the 10K difference but im not sure I REALLY can trust him at this point. WHAT CAN I DO LEGALLY?

Asked on 6/22/06, 9:51 pm

2 Answers from Attorneys

Philip Iadevaia Law Offices of Philip A. Iadevaia

Re: Need Help Please....Mortgage Loan Issue..Need advice

Come up with another $9,500 from somewhere and sue the broker and the lender for negligence. If you can't come up with the difference, you'll have to hire a lawyer to force the escrow to close for the short sum. Good luck.

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Answered on 6/22/06, 10:36 pm
Cynthia Beckwith Law Offices of Cynthia Beckwith

Re: Need Help Please....Mortgage Loan Issue..Need advice

Youe problem will be resolved if the loan funds for the higher amount, or if the broker actually pays the difference. Therefore, the practical resolution is to get a check (preferably a cashier's check) from the broker for the difference now, with a written agreement that you will tear up the check if the house appraises for the higher amount and the loan funds. Make sure that you get an agreement in writing from him that he will pay the difference. That way, if for some reason the broker does not come through with the check, at least you have an enforceable agreement on which to sue. (In California, all documents with respect to the purchase or sale of real property must be in writing to be enforceable.)

I think it is highly unlikely that a broker will want to risk a lawsuit over $9,500, if the broker has clearly admitted the error in drawing up the loan application or loan documents. Hopefully you can both avert that situation. However, just in case, as the previous writer said, I would line up another source for the $9500 as a backup just in case. Good luck.

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Answered on 6/23/06, 5:31 pm

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