All Forum Posts by: Alicia Miller

We did not obtain mortgage approval by the 9/4 commitment date but we were on track to have mortgage approval before the contracted 9/18 closing date. We had everything lined up and were just waiting for completion of title review when the deal fell apart on 9/12.

Is Fannie Mae really entitled to keep my deposit because the mortgage wasn't approved by 9/4?

@ Caleb Heimsoth Yes, we believe it should be returned based on the financing clause. Here the language from the contract. We cooperated with all requests for documentation.
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5. FINANCING: This Agreement is contingent on the Purchaser obtaining financing for the purchase of the Property.

For all financing, the Purchaser shall apply for a loan in the amount of $ xx with a term of xx years, at prevailing rates, terms and conditions. The Purchaser shall complete and submit to a mortgage lender, of the Purchaser’s choice, an application for a mortgage loan containing the terms set forth in this paragraph within five (5) calendar days of the Effective Date, and shall use diligent efforts to obtain a mortgage loan commitment by 09/04/2019. 

If, despite the Purchaser’s diligent efforts, the Purchaser cannot obtain a mortgage loan commitment by the specified date, then either the Purchaser or the Seller may terminate the Agreement by giving written notice to the other party. The Purchaser’s notice must include a copy of the loan application, proof of the application date, and a copy of the denial letter from the prospective lender. In the event of a proper termination of the Agreement under this paragraph, the earnest money deposit shall be returned to the Purchaser. The Purchaser agrees to cooperate and comply with all requests for documents and information from the Purchaser’s chosen lender during the loan application process.

Failure of the Purchaser to comply with such requests from the lender that results in the denial of the mortgage loan will be a breach of the Agreement and the Seller shall be entitled to retain any earnest money deposited by the Purchaser.

Hi BP! I need your advice. I put down a $5k deposit on a Fannie Mae owned property and they do not want to refund it. It's my first investment property and the plan was to purchase with FHA, renovate, occupy, and sell in a year. I was working out of state temporarily and set to return a month after closing.

The week of closing, my employer informed me they had to cancel my temporary contract and I either had to work in the out-of-state office permanently or be laid off. I told them I would stay. Long story short the underwriter found out and denied my mortgage at the 11th hour. 

We scrambled to find another way to finance and Fannie Mae granted an extension for hard money. I ended up being denied for the hard money loan as well so we had to cancel the contract.

Fannie Mae is claiming that because the loan commitment date was passed, and they granted an extension for the 2nd loan, it is their policy not to refund the earnest deposit. 

My realtor is adamant I should be refunded. I briefly spoke to an attorney but would prefer to resolve this without taking it to court. Anybody have experience with this? 

ps. Fannie Mae SOLD the property last month and are still holding my deposit in escrow. I've been told that's possibly illegal? 

Thank you in advance!