Cody Farkas
New Member
- Jurisdiction
- Ohio
Brief backstory
Entered into a contract to purchase a residential property. Seller is claiming that they are voiding the contract due to failure to meet the "financing contingency", which states:
Buyer agrees to make written application for the above mortgage loan and order the appraisal within ten (10) days after the date of acceptance; to cooperate fully with the lender's requests for information; to use good faith efforts to obtain the loan; and, shall obtain a commitment for that loan on or before 7/22/2019.
If, despite Buyer's good faith efforts, that commitment has not been obtained, then this Agreement shall be null and void and Buyer and Seller shall sign a mutual release authorizing the return of earnest money to Buyer without any further liability of either party to the other Brokerage(s) or Agent(s), except that Seller may grant an extension in writing.
We provided an approval letter to the seller's agent on 07/16/2019. This was not pre-approval; it was an approval letter contingent only on appraisal, which states:
July 15, 2019
Re: Application Number XXXX:
Dear XXXXX & XXXXX,
Congratulations! We are pleased to let you know that you have been approved for a $XXX,XXX.XX mortgage loan for the following property: XXXX Madeup Street, Sometown, OH, XXXXX-XXXX.
We have based your approval on the information you provided, the terms and conditions you specified for your loan, and a full review of your credit.
The following terms apply:
Interest Rate: X.XXX% Term: 360 Months Loan Type: Fixed
Commitment Expiration: 09/13/2019
In addition, your loan is contingent on the following:
* Satisfactory appraisal completed by Madeup Lender on an acceptable property.
We believe that the approval letter sent to the seller's agent on 07/16/2019 satisfies the financing contingency and that the seller has no cause to void the contract. Ohio Revised Code 1322.01-U defines the term "loan commitment":
"Loan commitment" means a statement transmitted in writing or electronically by a mortgage lender setting forth the terms and conditions upon which the mortgage lender is willing to make a particular residential mortgage loan to a particular borrower.
So, is the approval letter a "loan commitment"? Does the seller have cause to void the contract? We're very confused. We have already consulted with an attorney and will be reviewing the contract and timelines in detail on Monday but I would like to be as prepared as possible with any other information I can find before then.