Lender didn’t close on time

[Maxine Kunimura]

I was supposed to close 12/13 with a VA loan on a SFH. I intended to turn my current home into a rental. I met all borrower obligations (submitted all documents) with my lender and the lender told me on 12/12 they would be unable to close due to not having the ‘Clear to Close'. They didn't explain why. On 12/13 (original closing date) the lender requests add'l documents that I don't have and to obtain them requires me to visit the IRS office. Nothing nefarious on my end (it's a long explanation) but I could have provided this weeks/months earlier if I had known. My PA was dated 10-21-19, and the lender had almost 60 days to close.. I still haven't received any solid information from the lender as to when they'll be able to close. We're wanting to cease working with this lender - my question is, what obligation do I have to close? I realize I would lose my earnest money and in reading the PA, which was contingent on financing, the seller could take legal action on their losses if I can't close?

I know I could work with another lender, and I’m taking this as a huge learning lesson. I’m just trying to fully understand consequences and obligations from someone with no stake in the game. Of course, I expect my realtor to push for a closing. But I’m basically wondering now if walking away is an option (due to lender’s poor performance/inability to close on time). The lender has ignored my questions as to why this wasn’t caught earlier.

I tried to provide as much info as possible. Currently I have a PA Amendment pushing closing to 12/18 but of course the lender is unable to make that. Maybe next week. The home is currently vacant and owners live in FL I believe (it was previously a rental). Thank you in advance!