I'm recently trying to acquire an investment property (a single family house) in the USA. I have self-employment income and payroll income from the same company, my wife as well, and I also have recent payroll history with a different company.
I had refinanced my personal home with this bank only a few months ago, so they had all my paperwork. In discussing pre-approval for this investment property, I explained then that my company has less sales than pervious periods, but also far less costs (all COVID related). In other words, in terms of cash and ability to payout member draws, it's doing just fine. The banker assured me this wasn't an issue and they pre-approved us for a $245K loan.
It turns out that the "underwriters" don't like the company P&L (which includes, among other things, esoteric items such as asset depreciation), so therefore only will offer $143K in loaning! I was shocked, to say the least. I mean, a few 10's less I could see happening, but nearly 50%?
I feel mislead and if this deal falls though I stand to lose several thousands of dollars, plus time and opportunity. I want to sue the bank for not being clear with me at the outset regarding what amounts they'd be willing to loan. Is this an item which has precedence? Is there any avenue to successfully sue this bank? Even if the deal does go through, it looks like at this point I'd have to find a co-signer (far from ideal or desirable) and would likely cause several weeks of delay. I might consider suing even then, if that is possible.
I searched around a bit for what kind of responsibilities leaders have and found lenderliabilitylawyer.com. Their resource page suggests that "Misrepresentations in the application and commitment process" is a suable offense these days, though was less so in the past. In terms of "commitment", I don't believe the bank has made any, technically. However, it's the drastic change between the pre-approval and the offer, and the fact that no offer can be made until I've already risked considerable funds and effort, that leads me to believe a suable offense has occurred.