If I lost my $2,500 earnest money because the bankdid not give a final loan approval for closing but Iwas already pre-approved, canit be held responsible?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

If I lost my $2,500 earnest money because the bankdid not give a final loan approval for closing but Iwas already pre-approved, canit be held responsible?

Asked on February 10, 2012 under Real Estate Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

No, unfortunately the bank cannot be held responsible. "Pre-approval" is a misnomer--it does *not* obligate the bank to go through with the loan. Rather, it is merely a statement that if everything you represent is true, you should be eligible for a loan up to certain amount. However, banks do not commit to loans until after they do the underwriting. Until they finish with the underwriting process, there is no commitment, and hence no duty to provide a loan. Without a duty, there is no liability.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption