Legal Question in Real Estate Law in California

Re: Escrow Account

It depends on what the agreement or escrow instructions state.

Re: Escrow Account

You probably can get out of the loan, based upon the fact your mortgage broker failed to make full disclosure. Mortgage brokers have a fiduciary obligation to fully disclose to you all charges and fees, before you sign anything. However, it is less likely you will be able to get out of the purchase contract. And there may be deadlines coming up or that have already passed. In order to get out of the purchase contract, you may have to forfeit your deposit, and then sue your broker for a refund.

Re: Escrow Account

You have potential entanglements with three parties here, maybe more. Be sure to keep them separate in your thinking or you may lead yourself into unnecessary disputes with the wrong parties.

First, and possibly most important, you probably have a contract to buy a particular piece of real estate with the party that currently owns the house in Baja. Your concerns should start with figuring out how deeply committed you are to this deal, whether your contract makes it conditional upon your obtaining financing, or whether you have an unconditional and binding contract with this seller. Read and understand your real estate purchase contract is Rule One. If you have a commitment with the seller, and dispute you have with a lender is secondary.

The second party of importance is the lender (mortgage company). Your mistreatment by the mortagage company may give you a legitimate legal cause of action against them, or maybe just reason to rescindany agreement you have with them, or maybe they are in the right. In any event, your dispute with the lender must be distinguished from your relationship with the seller and your obligation to complete the purchase.

(Another possible relationship here is that the lender itself perhaps must be distinguished from a loan broker that has been working with you. Failures to diclose loan costs are as often the fault of a broker as they are of the actual lender.)

Finally, Bank of America as escrow holder is the leas likely of any of the parties involved to be at fault, or the be anyone yo whom you can complain to get your escrow money back. The escrow holder doesn't make decisions, they just follow instructions. They can give you back your money only under conditions set forth in the escrow instructions given them by the parties. Asking BofA for your money back will work only if it is clear to BofA that something has occurred that, under the terms of the escrow instructions, clearly gives you the right to a refund. This would be unusual.

So, if you want your money back, you probably will need the cooperation of the other party to the escrow, the seller, in giving joint instructions to BofA that the deal is off, no breach of contract penalties are due the seller, and all parties agree that it is OK to refund your deposit.

If terminating the deal breaches your contract with the seller, notwithstanding the fault of a lender or broker, you probably will have a difficult to impossible time getting the escrow holder to give your money back to you unless you reach an agreement to compensate the seller for the breach of your contract with him.

Of course, if the seller is in any way at fault, or if your obligation to buy is in any way contingent upon your getting financing which you were unable, despite your best efforts, to obtain, you should ultimately be able to convince the escrow holder to refund your deposit.