Mortgage experts, please help!

Hi, everyone. I haven't posted here in several months. My wife and I have cleaned up our credit significantly, so credit hasn't been very active in my mind.

Until recently, that is...

Here's the letter I've sent to a couple of attorneys (With names withheld to protect the GUILTY):

"A mortgage company (which shall be nameless) preapproved my wife and I for a VA/FHA loan back in April 2003. We immediately began looking for a house. We made an offer on a house in May, but the inspection revealed some things that made us change our minds about it. Before we decided not to pursue this house, the mortgage company received our package with all requested documents confirming our income, job time, etc.... In August 2003, we made another offer on another house. My brother-in-law and I even went out to the house on a weekend, with the permission of the seller, and spent almost two days working on it in preparation for the VA inspection. We were set to close on September 10th (yesterday), but about two weeks ago, we learned that our approval wasn't valid. This is supposedly because they discovered that we had some Non-Sufficient Fund (NSF) fees at our bank recently.

The problem is that NSF fees were never mentioned at all. In fact, when we filled out and returned our packet on that first house in May, copies of our bank statements which were sent showed that we had NSF fees in every single month since January, yet nothing was said about it. They continued to allow us to shop for houses, thinking that our approval was valid. In fact, two weeks ago (September 2nd), the lady who originally gave us our preapproval assured me yet again on the phone that our approval was still good.
My wife and I have spent the last several months looking at houses, driving around looking at neighborhoods, finding sitters when necessary for our two young boys, checking out school districts, negotiating prices, researching on the Internet, and just generally wrapping our lives up in this home search, only to be told 12 days before closing on THE house that there are problems with our bank statements, which had never once been mentioned before.

I find it hard to believe that something which played NO part in our approval process can be used to deny us at the last minute, especially when it had never been mentioned before. If we had acted on good faith in this mortgage company's "approval" and had given notice to our landlord, we could possibly have become homeless. I should also mention that, during the course of this home search, we paid $275.00 for the first home inspection, $230.00 for the last home inspection, and $250.00 to lock in our promised interest rate through September 23, 2003, with this mortgage company.

Is there anything that can be done? We were led over the course of several months to believe that we were approved. In fact, they upped our VA approval amount several times with no mention of NSF fees or any other problem, after having all of our documents in their possession since May.

There are far more details involved, all of which support my complaint, but I've chosen to be brief here.

I'm no attorney but I feel I have a strong case of negligence, at the very least, on the part of this company."

Anybody ever dealt with this sort of thing?

 

Here's the thing, though.

1. In every single period in which we had NSF fees, we also showed a positive average balance for that period. In fact, in several of these periods the average balance was several hundred dollars. True, we've had some poor money management practices, but we've corrected this and ALL of our bills were paid on time.

2. We were never asked about NSF fees. Not during the initial preapproval phase and not in the interim. These fees never came up until they declined our "preapproved" loan.

3. They've had copies of our bank statements since May, yet they allowed us to continue house shopping like everything was fine. Even our realtor thought that everything was fine after talking to them.

4. Just two weeks ago, the lady who initially preapproved us was telling me that everything was just hunky-dory with our loan, even AFTER we had been informed that there was a problem.

I totally understand what you're saying about it looking bad, but we obviously paid all of our bills on time.

 

Bump and a clarification.

Sorry about the long post above, but here is the short and sweet of it:

They allowed us to spend many months house shopping, then declined us over something that we had never been asked about before, even though they had this information since MAY.

I'm going to sue.

 

Bump. Anybody have any insight into this?

 

You're exactly right, but the angle I'm coming from is that they KNEW all of this since May, yet they still strung us along like everything was just fine. That's my grievance here. We put a LOT of time and effort into this search.

 

Re: Re: Mortgage experts, please help!

Committment letter? I have at least THREE of them, all of which were UPPING the approval amount AFTER they had these bank statements in their possession.

I see your point, but the problem is that they shouldn't be allowed to string people along like this. My wife and I didn't deserve it, and neither did our realtor.

 

Re: Re: Re: Mortgage experts, please he

Thanks. Sure, there were stipulations which we could easily meet, but the one thing which allegedly stopped the deal, NSF fees, were never mentioned to us until 1 1/2 weeks before closing, even though they had this info in their hands for months.

 

Re: Mortgage experts, please he

I'm going over all of this with an attorney first. If he doesn't think that anything can be done, then I'm going to complain in every place possible.

Thanks for the tip, though.