How can I get my escrow deposit back when the seller refuses to sign the release
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How can I get my escrow deposit back when the seller refuses to sign the release
We were denied a mortgage because we had a foreclosure one year ago. The mortgage lender never questioned us about this even though he had our credit reports which showed the problem. We were not aware that this would be a problem since we had good credit. After review, the lender gave us a pre-approval letter for a conventional mortgage. d on this letter, we bid on a property and after acceptance, went to contract. About 5 weeks later we were denied a mortgage bases on the fact that we had a prior foreclosure. The mortgage broker told us that he thought the foreclosure happened in 2009 and not in 2015. We then cancelled the contract, as we were within the cancellation period and asked for our escrow back. The seller then objected and said he wanted all of the escrowed funds based on the fact that he did not know that there was a foreclosure.
Asked on March 20, 2016 under Real Estate Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
If you were within a cancellation period or otherwise were able to cancel the contract according to its own terms, the seller has to return your money--it does not matter if he would have liked to have known that you had a foreclosure previously. If he will not sign the release for the funds, your recourse is to bring a lawsuit seeking a court order directing him to release the funds, and/or simply suing him for the money he has cost you by not releasing the funds. You are suing based on breach of contract--not honoring the term(s) that allow you your money back. If you wish to represent yourself (which may be the best course, since an attorney's fees could eat signitifcantly into the money you hope to get back), you can get instructions and sample forms (e.g. summons; complaint) from the court, either online or in person.
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