can I sue to recoup costs incurred due to bank's incompetence?

[Melanie Fletcher]

My situation..... sorry in advance for the long post!!

My husband and I are NYC residents looking to purchase investment properties in Pittsburgh, PA. Since July we have been working with a local Pittsburgh portfolio lender to purchase two investment properties. We were at the VERY end of the process and had been verbally told that our loan was approved for one of the two properties. Regarding the second property, we were trying to wrap renovation costs into the loan. In order to do this, we had to gather numerous quotes from a contractor (all at the request of the lender). We had just submitted (what the bank told us) would be the final renovation quote before the second loan could be approved. We were actually so far in the process that we had already paid the title company $400 for one of the properties.....based, of course, on the bank's verbal 'approval.' At this point, we were told that we were denied for both loans.....because of our residency status.

After months of work (with the bank, our realtor, contractors, etc), we were denied for something that the bank knew from day one. We are out a great deal of time, effort, money and have ruined relationships with Pittsburgh contractors because of their incompetence. The bank now refuses to put into writing the fact that we never mischaracterized our residency status. We feel that there are other reasons (potentially related to questionable lending practices) that have led to this result. 

What can we do to recoup our costs?  Is this even legal?

Thanks !!

[Russell Brazil]

So you want to pay a lawyer 400 to 500 an hour to try and recoup 400? Doesn't seem like the wisest investment to me.