How important is a letter of denial?

Asked by Victor, Boston, MA Wed May 12, 2010

I was not approved on a loan and have not yet received the letter of denial. How important is that?

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Jason Stevens’ answer
Jason Stevens, , Englewood, FL
Wed May 12, 2010
Could be VERY important. Read your contract that you signed with the seller. Do you have a buyer agent representing you? If so talk to them as well. Some contracts state that you must provide written approval and/or written denial of a loan to the seller (within a certain time period) in order to get your deposit back. If not youe deposit coudl be in jeopardy of being turned over to the seller.

I would get on the horn with the lender and have them send you a denial letter pronto and get it to the seller and/or listing agent right away.

Jason Stevens, GRI,ABR
1 vote
michele cado…, Agent, Brooklyn, NY
Sun Apr 17, 2011
Speak to your attorney- read your contact it may determine whether or not you get your downpayment back.
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Fri Apr 15, 2011
Really boils down to what the contract says. Talk to your agent and hopefully you have an attorney. This is where it can be so important to have an attorney looking out for your best interest.
0 votes
Susan Costa, , Westport, MA
Thu May 13, 2010
Victor - ernest money could not show the denial letter to the seller. In order to keep up your end of the Purchase & Sales Agreement, you have adate to aquire your commitment letter - if not, the denial letter is what you have to hve your deposit returned. Depending on the amount of $ you placed in escrow - this could be very important.

Good luck
0 votes
Jason Stevens, , Englewood, FL
Wed May 12, 2010
Victor - When you talk to the lender explain the reason why you need the letter. To protect your deposit. They shoudl be able to give you the letter immediatley . There is no excuse not too.

In the meantime I would contact the listing agent or seller and put them on notice that you have been denied financing. Make sure you follow up with written verification from the bank. Good luck and keep us posted.

Jason
0 votes
Mark Hansbar…, Agent, Angola, IN
Wed May 12, 2010
Do you want your earnest money back? And do you want to not be sued for breach of contract? Carefully read your purchase agreement with a yellow highlighter for 'weasel' or 'your out' clauses. You may need to act quickly as some contracts are written in the mode that assumes you automatically get your financing. Most purchase agreements require you to at least be a le to provide some proof of why you are 'backing out' of the purchase, in ability to get financing as described in your agreement (and that you did not screw up your credit or some such on purpose in a fradulent act to void your contract), or that the cost of insurance or your use of the property is not permitted. Your individual contract will, or should, clearly spell out your 'out clauses.' Good Realtors are worth keeping if they can also get you out! Maybe there is already another buyer to toe your place, but when it comes to money and contracts, found it best to 'always know where you stand.'
Web Reference:  http://Www.hansbarger.com
0 votes
Victor, Home Buyer, Boston, MA
Wed May 12, 2010
Thank you Jason! Im trying to get it asap
0 votes
Victor, Home Buyer, Boston, MA
Wed May 12, 2010
Thank you Jason! Im trying to get it asap
0 votes
Victor, Home Buyer, Boston, MA
Wed May 12, 2010
also im shopping around for a new lender
0 votes
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