Dear Mr. Azrael:
I recently applied for a home loan. I paid my application fee back in the beginning of March. I was given a settlement date of March 31. We used the Veterans Administration certificate that my husband has. We updated it like we were told. They forgot to have him sign it, so things were put on hold for one week.
My Realtor had an addendum drawn up that gave us until April 30. The new settlement was scheduled for April 23.
So in the meantime the mortgage company told my Realtor everything was going along fine.
On April 22, they [mortgage company] called my job to verify my employment. My Realtor called them [the mortgage company] and was told that the loan had never been approved. Then we shelled out $363 for homeowner's insurance. I had to write several letters. In the meantime, they postponed the date to April 24.
Then, one hour before settlement, they rejected the loan because of four late payments on rent. I had already switched phone, BGE, rented a truck and turned in notice to the rental office.
Can they do this to me? I am desperate. I've shelled out $1,700 in two months only to be turned down.
Dear Ms. Davis:
Obviously, you were misled when you were told your mortgage application was "going along fine." You had credit problems (late rent payments) and were denied the loan for this (and possibly other) reasons. So there is no way your loan application was "going along fine."
The mortgage company and/or the real estate agent should have told you that your loan approval was not certain, so you could decide whether to risk the upfront expenses you paid.
You should be able to get a refund of $363 you paid for homeowner's insurance, as the policy can be canceled because you never bought the home.
If you feel you have been misled, you can request that the Maryland Real Estate Commission and the Maryland Commissioner of Consumer Credit investigate the matter.
Pub Date: 5/10/98