I had been in a purchase process with my landlord who is also the loan originator/lender. After the appraisal came in (which he paid for and I never received) the deal went south. My boyfriend and I discussed with our landlord/lender who suggested that he run our applications separately and he could combine them after. My boyfriend was completely unaware of a judgment he had, and they denied him 6 days before closing. I never received a denial or an approval (not even a pre approval) from this lender. I went out and got approved else where on my own. Requested a small extension on the contract (which is still in effect) and he denied me any extension saying he didn’t want to sell anymore. He recently sent me a letter (prior to the contract end date) asking me to cancel the contract and he would reimburse me of my deposit. Thoughts? Facts? Is this wrong and illegal? I thought he had to act in my best interest since there’s a fiduciary duty involved in being an originator or a broker?
Buyer and seller are basically adversaries and neither one is under any obligation to act in the best interest of the other. Both parties are under an obligation to conduct business between them under a duty of good faith and fair dealing. The purchase contract was between your landlord and you and your boyfriend, not just you. So your landlord is behaving fairly in withdrawing from the contract and refunding your deposit. Your landlord may be doing this for a variety of reasons, not the least of which are the consumer finance laws of the State of Florida and acting as a mortgage lender he may have duties under the Frank-Dodd Act that he doesn't want to assume by becoming a mortgage lender. It may also be that the property appraised for a great deal more than the sales contract between the two of you. However since your boyfriend did not qualify the terms of the contract were probably not met. In my opinion you are being treated fairly. If you have your doubts speak with a licensed Florida attorney. This really a real estate question so I am changing the category.
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I agree, your bf has a judgment as was likely rightfully denied a loan. Whether you got approved or not is irrelevant as by the contract you must close by x date or deal is dead, not merely get financing elsewhere. And once contract date has passed, neither party HAS to agree to an extension regardless of the facts/situation. Cancelling the contract and refunding the deposit sounds like the correct course of action here. But you would need to do what you should have done when beginning to purchase real estate and hire a lawyer. Whatever your lender did or didn't do in terms of your application is wholly irrelevant to the other issues regarding the house contract.
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Perhaps; no way to tell on line, you should do now what you SHOULD have done before you entered in the contract to purchase (the lawyer would most certainly have advised you against using your seller as your mortgage broker!).
The lawyer can review your contract, investigate the facts you have posted (i.e., including just how your BF could NOT have KNOWN about a judgment entered against him - which would have required him first to DEFAULT on some obligation, and then have the party he caused damages to make some sort of demand on him, then file a lawsuit against him, serve your BF with the lawsuit, him purposely fail to respond, etc. - and yet was 'completely unaware?" all of which is quite strange). the lawyer can also speak to your seller/broker to get his side of the story, etc. ask why you didn't get a copy of the appraisal, and perhaps negotiate another extension.
Hope this helps.
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