Mortgage lender denies preapproved loan

[Patrick Orah]

Can their be legal recourse against a lender who preapproves a loan and then later deny the loan after I have entered into a ratified contract?

I am finally in the process of purchasing my first real investment property and I was preapproved for $200K. Based on that preapproval I entered into a contract to purchase a home for $175K. While in the process of doing due diligence and finalizing the loan, the lender is stating that they cannot complete the loan process due to debt to income ratio. However, none of my information has changed since the preapproval. Now I am in jeopardy of losing this property due to lack of financing. Can any legal action be taken against the lender if I lose this deal and my earnest money deposit?