While you cannot always have 2 FHA loans at one time, there are situations where you can.
The buyer likely didn't qualify for the exception.
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I'm so sorry this had to happen to you. Blessings.
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As for your next transaction in the domino effect, if you explain what's going on, there may be some concessions that can be made until you get your house sold. At this point, the transactions going to be a moving target for a while until the dust settles. Good luck!
It is probably best to simply move on, the time and energy making something to come together that the buyer doesn't want would be better spent on finding another buyer that wants your home. It is has been my experience that if the buyer really wants the house they will find a way. If they don't, they will find something like this as an excuse and use it to back out. They may well be exploring other options, and in a rare circumstance, a buyer that really does want the house runs up against a hurdle they can't overcome. In the end if they don't want to move forward they have a valid excuse why they can't purchase and you can't make pursue other options, that would be up to them to decide.
To answer your question however, the responsibility would be on the loan officer to check this sort of thing out. This doesn't happen all that often however because FHA is generally not used in a circumstance where a buyer would have the ability to own two homes (and therefore need two FHA loans).
Yvonne Baker, Real Estate Consultant