Just because you have a gut feeling, don't like the way someone looks, etc. isn't a legal basis for denying them a place to live.

He and I became what I would consider business friends talked about our families, the trials and tribulations of the mortgage business and the fact that he is from a small town in Washington so he completely understood the issues with comps on our personal subject property and now its why we were denied?

He didn't give any notice and he left all the rooms open.I've called him for an explanation but he blatantly denies it and says he only showed the agency one bedroom.There were two housemates in the house at the time so proving it shouldn't be a problem.What can I do?

If based on income you can purchase another property before short selling that one to take advantage of the down market.Then just put the title into a new company that you control so they can't lien it in the future.If the seller doesn't want to buy anything and just wants out a short sale is probably best or if there is just one mortgage on the property a "Deed in Lieu" of foreclosure would be quicker.Usually takes about 60 to 90 days for the lender to make sure title is clean before accepting.DIL is especially favored by lenders in states with long redemption periods for the owner.The banks would much rather save damage to the property,foreclosing and court costs,and the market eroding further and get the property back today.That might be a much better route for the seller than going through the nightmare of a short sale depending on who the lender is on the loan.Also sometimes on a short sale if you submit financials and they deny the short sale you have given ammo to come after your assets.This is why many investors won't disclose all assets to the bank on a short and would rather let it foreclose.If you have cash then you don't care about credit much.

I knew which apt it was coming form so I knocked on the door and asked the tenant if anyone in their apartment was smoking weed, I knew they would deny it but I just wanted them to know that I knew what was going on.

src=/program_offices/fair_housing_equal_opp/FHLaws/yourrightsAnd the key section, emphasis added for the defined "classes":In the Sale and Rental of Housing: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:Refuse to rent or sell housingRefuse to negotiate for housingMake housing unavailableDeny a dwellingSet different terms, conditions or privileges for sale or rental of a dwellingProvide different housing services or facilitiesFalsely deny that housing is available for inspection, sale, or rentalFor profit, persuade owners to sell or rent (blockbusting) orDeny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.Not sure how renting only to section 8 tenants falls under those regulations.Now, some locations have additional classes.

If he calls her, she should ask him to please put any response in writing, especially if he denies her version of the story.

My concern is i do everything to get ready for the closing, like find and buy a home in Florida, move my family etc.. only to find out on day 43 that the bank denied his mortgage.

One recent case where an exchange was denied the property had been held for 12 years but the intent to hold had never been established to the tax court's satisfaction.  

It's the ones you deny that will get you in serious legal trouble.