Homebuying and Homeselling fiasco...snowflake details inside.
December 2, 2013 12:01 PM Subscribe
Can you offer some advice on how my wife and I might recover some funds spent to satisfy a lender's requirement prior to denying the loan of the buyer, or how we might be able to continue with the purchase of a new home we're in contract for?
posted by drewski to Law & Government (7 answers total)
My wife and I have had our home on the market for several months, and were lucky enough to find a buyer. He happened to be an FHA buyer, so there were some stipulations on the home we had to agree too - one of the major ones being we had to put on a new roof, fully paid for by us. This is something we were willing to do as we had our home on the market for several months, not to mention the buyer was offering full price as sort of 'compensation' for his lender making that kind of demand. There were several other quite constraining factors like closing within 6 weeks (we had not found another house yet), and fronting $2000 in closing costs. The market value of the home was ~$120,000.
Luckily, several days after accepting the offer, my wife and I found a home we fell in love with. It was a great home that had sat on the market long enough that the price had fallen low enough for us to have instant equity, large enough for the family we want to have, and in a great community we had wanted to live in for quite some time. We were counting on about half of the down payment money to come from the equity in our current house. We eventually got into a purchase contract for the home, and are ecstatic!
Fast forward two weeks - some devastating storms ravaged the community our new home, destroying several hundred homes within the same price range as the home we are buying. Needless to say the supply for homes in that price range is very low - in fact the day after, 15 families called about our new home hoping it was still available for purchase.
Several days after, we find out the buyer of our house is going to be denied the FHA loan he was counting on to purchase our current home, and seems to in general have lost interest in purchasing.
Here is our current situation:
-Buyer of current home is getting a Notice of Denial to legally allow him out of the purchase contract.
-We have spent nearly $5,000 of unplanned money on our home to statisfy the previously enforced FHA rules his lender had.
-We will no longer have the funds to buy the new home we are in contract for (we do have a clause that is contingent on close of our existing home)
-If we do not purchase the house we want to move to, it will most certainly be snapped up in a matter of days for well over what we are in contract to buy for, and the supply of homes in that price range will depleted for quite a long time.
Do we have any recourse in recovering funds we were forced to spend by FHA regulations? Any advice on how we might still be able to follow through on the purchase of our new home?