Can a bank be sued for not following regulations that require funds be verified in the buyers account before closing?

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Can a bank be sued for not following regulations that require funds be verified in the buyers account before closing?

The buyers of our home went to closing last month without the funds needed. The

woman was to gift her boyfriend with a cashier’s check for $117,000 but the bank who did the loan for our home never verified those gifted funds as being in the buyer’s account. So as we were with a moving truck on our way to our new home we found out it fell through. We lost money, etc. because they never verified.

Asked on October 3, 2018 under Real Estate Law, Iowa

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, it is not the bank's obligation in regards to you to verify the funds; they are not liable for not doing so. Banks do not guaranty that money represented to be in someone's account is in fact there. The person to sue is the buyer, since he breached his obligations, and possibly also committed fraud, by making a false representation: you would sue him for your losses, based on breach of contract and/or fraud.


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