Reader Question: Paid Escrow Up Front, Now Not Allowed to Buy Home

by Kevin on November 23, 2008

Reader Jonathon recently sent me an e-mail with a request for help.

I was in the process of finishing the underwriting and closing of the house we wanted to buy and had already paid the escrow a month and a half before.  We were told that VA had made a decision that they would not approve underwriters for a VA home loan.

When asking around (and even the house selling company) to others, I was told that they had never heard of that. Then we found out 1-2 days later that a family we met here at [military base] that they had ended up buying our house through another company.

Is that legal for another company to sell our house to someone when we had already paid the escrow on the house and signed the contract papers saying we were buying the house?  Also, does VA have such a regulation against using underwriters? I was told that all house sales have to have an underwriter.

I told him I was not qualified to answer that question and he should talk to a professional such as a CPA or real estate lawyer. I also mentioned Dave Ramsey. I asked his permission to post the question on the blog and see if there are any readers out there that might be able to give some advice.

So here goes — what would you recommend for him?

Have a personal finance question? Drop me a line. I’ll either answer it via e-mail or (with your permission) ask the readers for assistance.

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