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On XX/XX/XXXX I entered into a purchase agreement to sell my home. The buyer had been pre-approved with Results Mortgage. Buyer had the home inspected after the inspection period had expired and made some repair requests on the home. The requests were made after the inspection period had expired. As seller, I agreed to make most of the repairs, however not all. The home passed the USDA appraisal process and it appeared the mortgage lender had everything she needed and everyone was ready to proceed. The buyer began to try to back out of the Purchase Agreement due to the inspection requests. We did not agree to this because she was no longer in the inspection period. She then tried to back out of the purchase agreement stating that association docs were not delivered timely, however they were. Buyer made multiple failed attempts to get out of the Purchase and retain her earnest money. Buyer failed to appear at closing scheduled for XX/XX/XXXX. On XX/XX/XXXX, I as seller, had Buyer personally served with a Notice of Cancellation with right to cure under Minn Stat. 559.217. No less than 1 hour after buyer was served my agent received an email from the sellers agent indicating they would be interested in closing XX/XX/XXXX. The following day we received information that the buyer will no longer qualify for her USDA loan and they want the earnest money returned. We received a copy of an unsigned Denial Letter from Results Mortgage that indicates " the income of all parties '' exceeds the limit on a USDA loan. There is only 1 buyer listed on the purchase agreement, and her income obviously qualified when she received her pre-approval.
The mortgage lender has been non responsive and very deceptive to work with. The USDA loan application was initially approved. After service of cancellation the buyer magically had another income added to her household. The financing contingency was the only contingency left in the purchase agreement. It seems like a very poor and unfair business practice to allow a buyer to purposely sabotage their financing to be released them from a purchase agreement. In addition to this, as seller, we are not given any information as to when the additional/change of information was provided to the lender to confirm whether or not the buyer is purposely sabotaged the financing. I understand there are strict confidentiality rules, however this practice seems incredibly unfair. Either the loan officer was incompetent and did not ask the correct questions upon taking the buyers initial application, or the loan officer is allowing her to add false information to release her from the purchase agreement with her earnest money.
Another aspect of this is the pre-approval letter from Results Mortgage for the buyer was generated XX/XX/XXXX. It is my understanding that a Mortgage lender has 30 days from a completed application to render a credit decision, or request any additional documents from the borrower with a timeline. We did not receive the denial until XX/XX/XXXX. ( in addition, the denial letter was unsigned ) This was far outside of the 30 days. ( I of course do not have access to whether or not the application was completed or not ) Not only is it incredibly unfair to me as a seller to delay this lending decision and keep my house tied up off the market with an individual who has no intent to purchase the home, it is extremely questionable that one second the buyer qualifies for the income requirements and the next ( after personal service ) she no longer qualifies.
My real estate agent attempted to confirm with the branch manager the date the new information that changed the credit decision was submitted. He was told multiple times not to go there and that he is unable to release any information about the file. The branch manger seemed to have no interest in ensuring the file was compliant or closed out ethically. I have suspicion that the mortgage lender was " advising '' buyer on how she can be denied. ( obviously nothing I can confirm )
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