Legal Question in Real Estate Law in California

Lender negligence

The lender I am using for my home loan lost me my interest rate. I received my approval on 12/15, and I floated my rate down 3 days later. On 12/24 my lender informed me ''they the lender'' wouldn't do business with the bank and that they pulled my package and submitted it to another bank. The bank asked them to sign a broker agreement, or a ''gaurantee'' on the loan. I was never informed of any problems between the lender and the bank. My lender inormed me after they pulled the loan package, my rate was now not locked, and the rates went up a .25 point. Shouldn't the lender know if it can do business with a bank before they submit? I feel I should have been given the opportunity to submit with another lender that had an agreement with the bank, but they didn't give that.


Asked on 12/29/08, 6:17 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Lender negligence

The party you refer to as your "lender" sounds more like a loan broker to me. Most loan brokers work with a large group of actual lenders, and the brokers may or may not be fully conversant with each lender's current borrower requirements and loan-terms package offerings. Advising you on whether the "lender" (or broker) was negligent would require a lot more information and review of all documents you produced or received and relied upon, e.g. your application material, and the broker or lender's "approval" (which often is far from a commitment). My hunch based on considerable experience with "approvals" is that the "lender" carefully avoided making any commitment that would give you a right to sue for negligence, breach of contract, or anything else. Maybe rates will go down 1/4% next week.

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Answered on 12/29/08, 11:58 pm


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