Home Selling in Rochester>Question Details

Michaeline K…, Both Buyer and Seller in Rosemount, MN

The sale of our home fell through when 5 days before closing it was discovered that the Buyer already had an

Asked by Michaeline Kay, Rosemount, MN Tue Aug 26, 2008

FHA mortgage and had been approved for the one to buy our home. Apparently you can't have two FHA mortages at one time. Who's responsibility was it to check for this information? We are now out a great deal of money and can't close on our new home.

Help the community by answering this question:


It is the buyer's lender who is responsible for checking for this.

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.

Tom Burris
Mortgage Banker
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
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0 votes Thank Flag Link Thu May 10, 2012
Since all mortgages are 'usually' listed on the credit report, I'm only assuming (and it's only an assumption) that the loan officer didn't pull a full credit report until they were ready to submit it to underwriting. It's just a bad situation. Talk to an attorney to see what, if anything, you can do.

I'm so sorry this had to happen to you. Blessings.

Kim Eisen
RE/MAX Realty 100
"Helping People Make Smart Real Estate Decisions for over 28 Years"
Experience Counts!
(651) 457-HOME (4663)
0 votes Thank Flag Link Fri Sep 26, 2008
Keep the house. It's nice. That's why you bought it. It's not a good time to try to sell a house. Good Luck
0 votes Thank Flag Link Wed Aug 27, 2008
What? That's outrageous. I agree with Cameron. The lender should have figured that out when they were checking on all of the buyers assets and debts. There's a question right on the loan application that asks if they have any other real estate. If the buyer said yes, the lender didn't do their homework. If the buyer said no, they obviously lied. In that event, it's the buyer's responsibility. It's still surprising they didn't find it out until so late.

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!
0 votes Thank Flag Link Wed Aug 27, 2008
Michaeline Kay,

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).

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Wed Aug 27, 2008
It is inconceivable that the buyer's loan officer did not discover this at the time the buyer was pre-approved. Is there some reason the buyer cannot go with a conventional loan for this purchase? Ask your realtor to check this one out for you.

Yvonne Baker, Real Estate Consultant
Web Reference: http://www.YvonneBaker.com
0 votes Thank Flag Link Wed Aug 27, 2008
I think you need to address this issue with your Realtor and a Real Estate Lawyer.
0 votes Thank Flag Link Tue Aug 26, 2008
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