Legal Question in Real Estate Law in California

Re: Real Estate Law and Small Claims Court.

"Got a loan" and "canceled the loan" are inconsistent statements. Your friend hasn't "got the loan" until, a couple of days before close of escrow, the loan is funded by the lender delivering the money to the escrow holder.

That is because nearly all professional lenders write their "loan approvals" with conditions. For example, if the borrower dies, goes bankrupt, or the property being purchased burns down, or some other glitch develops, they want to be able to back out.

So, a suit in small-claims court is a possibility if the amount to be asked as damages does not exceed $5,000, but your friend will have to read the commitment letter, conditions for funding/closing, etc. very carefully to see whether there was an actual breach of contract or whether a precondition was not met.

Re: Real Estate Law and Small Claims Court.

who is suing, the seller for specific performanc and damages or the lender???? the answer in both cases without seeing certain documents is yes --- if you wish to consult with me 925-945-6000 in northern ca

Re: Real Estate Law and Small Claims Court.

Who cancelled the loan, your friend or the mortgage company?

What does the purchase contract say?

If your friend cannot close due to his own actions, and there is no contingency that allowed for the cancellation, the seller can retain the deposit if liquidated damages was agreed to.