Netted $63k Settlement For Clients Harmed By Real Estate Broker’s Malpractice
Home sellers trust real estate brokers to represent their interests and honor their wishes. These state-licensed professionals adhere to strict regulations that uniquely qualify them to fulfill their fiduciary duties to sellers.
Unfortunately, this couldn’t have been further from the case for our clients.
Our clients are a veteran household. Their Department of Veterans Affairs (VA) benefits package includes a home loan certificate of eligibility. This home loan certificate guarantees veterans lower-than-average interest rates, no down payment, and little-to-no closing costs compared to a standard mortgage.
But here’s the catch: If a nonveteran is assigned a veterans loan, they lose their VA loan rights until the loan is paid. This could mean decades before a veteran can enjoy the rights earned for a VA loan.
In some cases a broker may suggest sellers assign their loans to buyers. If the buyer is VA eligible, then they can substitute their eligibility for that of the sellers. However, if the buyer is not VA eligible, they take the seller’s eligibility into account until the loan is paid. We have seen cases where the broker encourages clients to accept the assumption of the loan either unaware of the rules of assumption or so eager for a sale they don’t care that they are selling their client’s VA eligibility.
Once sellers have accepted the offer, they may have unknowingly forfeited their VA eligibility. Brokers who are more interested in a sale than protecting their clients lead sellers into forfeiting their VA eligibility. They may then advise sellers that they have to go through with the sale, regardless of whether the buyers granted a release of the VA home loan. Brokers often want to try to “clean it up later” after the sale. Once commission checks are cashed, sellers may feel they are left with little recourse.
Buyers eager to close and take advantage of the VA benefits they have earned may threaten to sue sellers and put further pressure to transfer the VA loan. Brokers may abandon their clients and refuse to assist them in negotiating a loan agreement with the buyers. In these types of cases, Robinson & Herny can help. We can force brokers to pay for their errors and omissions and have had success forcing buyers to refinance to release the sellers' VA eligibility.
Our real estate litigation attorneys can demand brokers be accountable for their actions and compensate our clients for breach of contract and professional negligence. We have been able to negotiate cash settlements to help our clients cushion the financial blow while they wait for their VA eligibility to be restored.
