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Va addendum states I get my earnest money back but lender is keeping it stating breach of contract , can they keep my money?

Tucson, AZ |

lender had me sign electronically to cancel after FICO score fell below what VA needed for me to close on the loan, we signed a cancellation stating upon approval of cancellation by seller I would get my $7500 back, however my realtor received a cancellation letter from title company that shows my electronic signature but it also shows where someone wrote in after we signed that seller will retain my money, which wasn't what I signed and my copy and the copy from the title company where the lender wrote in that they will be keeping my money. They also sold the home the same month that my contract was cancelled. The cancellation stated I would receive my money in 3-4 weeks.

Attorney Answers 2


  1. Possibly. You need to have a contract review with a real estate attorney to determine whether your earnest money should be forfeited. The original contract is key. If it says that you will get the earnest money back if you are not responsible for the failure to get financing, if it was contingent on your getting financing,then you are entitled to it. But if it says something else, then you may not be entitled to it. The thing is, the language of the contract controls.

    Have a contract review, and if you have a case then sue. And if the contract also states that you are entitled to recover attorney's fees, then these should be awarded as well.

    All my best.

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  2. The most important thing for you to do is to notify the title company about this dispute as it generally has control over the earnest money deposit. It will not release the earnest money to either party until both parties have an opportunity to address the issue. The title company also has its own legal department to evaluate these disputes.

    Please note that I am answering this question as a service through Avvo but not as your attorney and no attorney-client relationship is established by this posting. An attorney-client relationship can only be established through signing a Fee Agreement and paying the necessary advanced fees.