Expert: Jay Denit - 11/17/2006

Question
Hello,

   Thank You for your time and assistance.
My question is this:
A lender agrees to lend to a borrower on specific land and (mobile home that is located on the land.)
The lender specifically says they will lend for that specific property.
The borrower gives earnest monies and pays the lender for the inspection fees.
Everything looks good.
Days before closing the lender backs out.
Well they don't back out completely the just stall the closing.
They say they can not lend on the mobile home because it has been transported more than 3 times.
They say it will take a week to determine if they can or cannot lend for the mobile home portion of the transaction.
A week passes and the borrower is forced to pay the closing date extension fee of $250 to the seller for a one week extension.
The lender does not call so the borrower chases them down.
The lender then claims it will take another 40 days to determine if they can lend on the mobile home.
At this point the borrower is fed up with the lender and can not afford to pay over $1000 in closing date extension fees
for an uncertain result.
So the buyer backs out of the deal.

Is there any recourse for the borrower/buyer to recover the earnest money,inspection fee and closing date extension fees?

Thank You,
Brandon

Answer
Hi Brandon,

To be honest, mobile home lending is very specific and a bit outside of my expertise.  To get a better answer I would contact another local, mobile home lender and bounce your scenario off of them and see what they say.  Your inspection fee is probably a sunk cost and not recoverable.  Your earnest money is another story.  A question you need to ask your real estate agent, is if they notified the seller before "loan commitment deadline" that the buyer was unable to receive financing.  (i.e. did you preform to the terms of the purchase agreement).  Good luck and I wish I could be of more help.