Expert: Dick Dennis - 1/8/2008

Question
I put $3000 down for earnest money back in May of 2007 to build a home.  I was told at the time to work on my credit and I would have a zero down loan.  Time went on with little contact with the mortgage lender.  I brought my credit score up about 100 points and was told to not worry because there was nothing more to do and still looked like I was going to get zero down.  Thirty days before closing they told me I needed 5% down.  I rounded up the money and between what I had and the seller was going to pay $8000 towards closing costs I was suppose to come up with $9100.  My monthly payment was suppose to be right at $2000.  Everything was in line and ready to go.  

Eleven days before closing my lender told me the company she was going through was no longer in business and there was nothing more she could do for me.  I had talked to several lenders and tried to make it work, I had given up several times and then to be excited again thinking I had a chance to get the house again.  This was a dream house of mine and I picked out everything to put in it I wasn’t just going to walk away from it.  They found a contact for me and he said he had a loan he could get me into for the same amount down and same monthly payment.  I got to closing and started signing all the paperwork and kept asking about the figures and they kept putting it off because they didn’t have the numbers yet they were waiting for the fax to come in with the final figures.  After  two hours of signing and reading papers the numbers came in and they wanted another $4000 down and an extra $400 a month.  After a long break and trying to find out where the extra amounts were coming from I decided to walk away from the table because that isn’t what I had agreed to.  They sent me a letter stated I walked away from the closing table with refusal to reschedule when two loan packages were offered to them within their required parameters.  The only two packages offered to us was one at the closing table for $4000 more down and $400 more a month and then also one that was no interest for 10 years and with a 40 year loan.  This is not what I wanted so I didn’t agree to it.  I had already rented a uhaul and had it half loaded before signing because they kept changing the closing time.  I didn’t even have anyone from Beazer home to back me when signing the paperwork, I didn’t know anyone at closing.  It seemed rushed and if I would have signed those papers in a rush I would have been out another $4000 and $400 more every month.  

I am trying to get my earnest money back.  I didn’t back away from the closing table because I wanted to, but because I wasn’t going to pay an extra $4000 now and $400 a month more for a mortgage payment.  I did my part by increasing my credit score by almost 100 points and instead of zero down was able to come up with 5% down.  I feel they were trying to rush me and I am not going to sign a loan for 40 years and 10 years no interest.  The lender never came back with a 30 year loan with the beginning terms of $9100 down and at $2000 a month.  All I want is my earnest money of $3000 back so I can continue looking for a home.

Toni  

Answer
The next time you are ready to buy a brand new house from the builder, you will bring the paperwork to your REAL ESTATE attorney before you sign ANYTHING. Now you have to take the matter to small claims court to get your $3,000 returned. The amount of money is too small for an attorney unless you decide to sue for lots more.

Be sure you round up all the papers you signed (and received a copy) and write down what you are going to say to the small claims court judge. Because this is the only way you are going to get your money back. I wish you well.

Dick Dennis