My situation is that I deposited money with a builder for a pre-constructed
home. The builder has an affiliate that does mortgage financing. I was
pre-approved on a loan but when it came time to purchase the home I was
unable to obtain financing. The contract has a short contingency period
for cancellation but does not address what happens in case financing is
declined.

Does anybody have any suggestions or any related situations where a
consumer was able to get his deposit back?

Thank you for your responses.

You may want to post this under real estate as well. I would suggest that you speak with an attorney to discuss your legal options. I have not heard of a contract without a cancellation clause for not being able to obtain financing. You can locate an attorney through the attorney locator on Lawinfo's home page at http://www.lawinfo.com/. Some do offer free consultations.

If you can not obtain finacing you will NOT be able to go through with the purchase contract. Most builders understand this and return the deposits. As a last resort if the deposit check has NOT been cashed, go to your fancial institution and place a stop payment on the check. better to loose 25.00 than 3000.00

Thank you. I have, in fact talked to a lawyer regarding this issue. His position was to go ahead and sue. However, I've since done some research on contract law and read the contract (which the lawyer read also) and since he didn't outline what law would be applicable to overturn a contract with explicit terms, I couldn't understand what a lawsuit would do exactly except enrich his bank account - regardless of the my outcome.

That is why I posted on this site to see if there is anyone that can comment on the likelihood of getting deposit monies back in this situation. The "mortgage contingency clause" only allows time to get "pre-approval" but does not comment on what happens if financing is not obtained. The contract is clear in it's terms, however it does not seem fair. This is not an argument of law, however. l

Does anyone know of any pertinent case law or contemporary judgments in this area. I'm sure there is a lot of litigation lately with the real estate market adjusting downward and people walking away from their purchases. The atmosphere is ripe for it, but I'd like to know which way the courts are leaning.