Sellers threatening to sue me because I cant get financing

[James W.]

HELP! I own a house in San Diego which currently is not being rented out right now because the property manager is preparing the house for rental.

I went ahead and made an offer on a 2nd house. I obtained a preapproval letter from a mortgage broker based on my income. My income was enough to pay for both mortgages at the same time.

Last week the mortgage company said that because I had so many deductions on my 2004 taxes, I will need proof that the house is currently being rented in order to obtain the loan. I cannot get proof of a lease yet because the house is not ready for rental. As a result, they refused to give me a loan.

The contract for the second house was contingent on me obtaining financing. The sellers agent was pissed that I was not able to obtain the loan and threatened to sue based on the fact that I knew all along my San Diego house was not being rented out. I NEVER tried hiding the fact that the San Diego house was currently not being rented out and I do not think my preapproval loan application ever asked me how much the San Diego house was being rented out for in the past, it only asked for my salary at my current job.

I do not think he has a case because I dont think I ever included my rental income as my regular income in my preapproval letter. This only became an issue with the mortgage lender after they saw I took a lot of deductions in my 2004 taxes.

Does the sellers agent or sellers have a case against me?