Is a loan denial statement legal and/or ethical?

Asked by, Fri Jan 3, 2014

I was denied the loan with a few weeks before closing and now I have to sign a disclosure to give all the info on why my loan was denied to the seller and her agent, just seems unethical to me

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Fri Jan 3, 2014
Were you within the time frame of your mortgage contingency clause? They can ask for proof of denial if you are looking to get your down payment back. If you have exceeded the time frame for your mortgage contingency, or you told them you were approved, only to have your loan later denied, you would want to do whatever they ask to get your down payment back, because they don't have to give it to you.

Remember, you signed a contract, which is legally binding, and you will have to abide by the terms. Although it will not say whether you have to give them a reason why you were denied, they could ask, as you are the one breaking the contract.
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I'm not sure if I was within the time frame of the clause but I was approved yesterday but denied today.
Flag Fri Jan 3, 2014
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