From the ABA Journal, By Martha Neil
Several buyers who say they were somehow prequalified to purchase expensive Seattle condos utilizing mortgages they couldn’t possibly afford are now suing the bank that allegedly put them in this position.
By prequalifying them, JP Morgan Chase Bank set the plaintiffs up to lose $175,000 in earnest money when, inevitably, they failed to qualify for the actual mortgage, the plaintiffs argue in a King County Superior Court suit filed Wednesday. Under a Washington state law, condo developers can retain the earnest money deposit if a buyer backs out, reports the Seattle Times.
The bank apparently declined to comment. However, a real estate agent at upscale Bellevue Towers says the developer has no interest in selling to anyone who can’t afford a unit. Among the condo units at issue in the suit, one reportedly was priced at $724,000 and another was $1.5 million.
Attorney Jim Robinson, who is representing the plaintiffs on a pro bono basis, also criticized the Washington law on earnest money. “If you take that law and combine it with a lousy real-estate market, guess what happens? You’ve got developers running around trying to grab people’s earnest money,” he tells the newspaper. “It’s going on all over the state.”
