If the buyer who went bankrupt tried to get a loan under the pretense of never having a bankruptcy, then yes. But this goes against mortgage laws, not real estate sales person laws (as far as I know). On the same token, if I had a client and "knew" they had a bankruptcy, I would have darned well made sure that they were pre authorized to get a loan AND made sure the lender knew of the bankruptcy. If the buyer was just snowballing everyone, or even just the lender, it is punishable by jail time. Federal. It is fraud and theft. Plain and simple.

If you are the seller whom all this happen to, I would highly advise of obtaining legal council and getting the police involved. But you need to be sure he lied on the loan application, where it would have asked if the borrower has ever had a bankruptcy filed in the past "x" years.

Hope that helps and good luck.

Terrence Charest.