Sellers Agent Threating To Sue Because I Cannot Get Financing
HELP! I own a house in San Diego which currently is not being rented out right now because the property manager is preparing the house for rental.
I went ahead and made an offer on a 2nd house. I obtained a preapproval letter from a mortgage broker based on my income. My income was enough to pay for both mortgages at the same time.
Last week the mortgage company said that because I had so many deductions on my 2004 taxes, I will need proof that the house is currently being rented in order to obtain the loan. I cannot get proof of a lease yet because the house is not ready for rental. As a result, they refused to give me a loan.
The contract for the second house was contingent on me obtaining financing. The sellers agent was pissed that I was not able to obtain the loan and threatened to sue based on the fact that I knew all along my San Diego house was not being rented out. I NEVER tried hiding the fact that the San Diego house was currently not being rented out and my preapproval loan application never asked me how much the San Diego house was being rented out for in the past, it only asked for my salary at my current job.
I do not think he has a case because I never included my rental income as my regular income in my preapproval letter. This only became an issue with the mortgage lender after they saw I took a lot of deductions in my 2004 taxes.
Does the sellers agent or sellers have a case against me?
[ Edited by molarband on Date 07/21/2005 ]
[ Edited by molarband on Date 07/21/2005 ][ Edited by molarband on Date 07/21/2005 ]
yes the contract said that the sale of the house was contingent on me obtaining 80% financing at a rate of no more than 6.5%. I have a signed letter from my mortgage broker stating that the loan was denied because of "insufficient income". I faxed this to him 4 hours before the deadline.
Legally am I okay?
Legally, I expect that you are OK. However, the seller may still require you to try again, perhaps with a different lender. There is also a chance that your rental will become occupied, and your rental income will overcome whatever concerns the first lender had.
When I have a vacancy, I often give the lender a copy of my property management agreement showing the expected rent. Since lenders only allow 75% of rental income to cover vacancy periods, I have had lenders accept a copy of the previous lease along with a copy of my property management agreement for the property.
You might try this to see what your lender will accept.
encourage them to refinance in a couple months
Foreclosure. Do they have any equity in the house?
***Encourage them to refinance, if they are paying for 6 months they should be able to get a cheaper interest rate.
cheaper compared to your 10%. The should be able to get some kind of fixed rate paying principal even, pretty much no matter how bad their credit is.