Consumer complaint received 2018-03-26
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: FIRST NATIONAL BANK OF PENNSYLVANIA (VA)

I believe there has been collusion on the part of a real estate residential home buyer and a lender, First National Bank, to illegally and unethically void a ratified contract on a house I am selling based on a denial of financing after saying the buyer was overqualified and had no issues, while at the same time approving these same home buyers to buy another house 1/2 mile away while still under contract with us. The lender pre-qualified the buyer who has a 12-year history of working with this lender on his businesses. However, while still under a ratified sales contract with us, this buyer entered into a new ratified sales contract with another seller for that new house and got the same lender, First National Bank, to provide the financing pre-qualification letter before issuing any denial letter to us and enabling this buyer to outbid 9 other buyers for that home while still under ratified real estate purchase contract with us. The lending institution did not issue a formal, signed denial letter to us and the title company had no knowledge of the financing denial until two days after this buyer had already outbid 9 other people for the other house and placed a ratified sales contract on that property. First National Bank only issued the formal denial letter to us because we repeatedly asked for it once we learned of the new contract and that they were giving us conflicting information after stating repeatedly this buyer was overqualified. They tried to say he had a bankruptcy which was over 10 years old and one late payment that was over 7 years old -- neither of which is allowed to be factored in after this amount of time. He also has a credit score of XXXX and a clean credit history for over 24-months, which is the requirement. After that didn't work, First National Bank then denied it based on " insufficient stability of income, '' not amount, but is enabling him to purchase this new home with the same insufficient stability of income. We have abided by the contract and yet this buyer and First National Bank have not and have damaged our ability to sell this property by making it look as if a sale fell through, having it off the market for an entire month when it could have been offered to legitimate purchasers, and is now facing foreclosure. The buyer also violated a buyer agreement with his real estate agent and purchased this other home with a new agent, all the while apparently he is a licensed agent himself so should know the laws and regulations prohibiting these actions. He has clearly broken several laws and contract agreements and yet the lender, First National Bank, continues to give him credit because they get the loans. He also offered to pay the agent " under the table '' to make it go away. If you are selling a house, do not enter into an agreement with anyone who has First National Bank as a lender. If your buyer finds a house they like better after ratifying a contract, First National Bank will find a way to deny financing so that they can get out of the loan. This buyer waived appraisal ( which came in above sales price ), waived home inspection ( and we disclosed all items and amounts to fix ), and waived termite/insect inspection as well. The ONLY contingency was financing. This buyer also added an escalation clause to beat out other buyers ( which he did because we selected him over another buyer because he had no contingencies other than financing and his escalation clause was {$1000.00} higher than the other buyer ), and we felt comfortable since First National Bank was a well-known institution. Now he has done the same thing with the new house -- waived everything but financing to get this house with First National Bank 's backing. I feel sorry for the 9 ethical buyers and lenders he won out over and this seller has no out for the contract that this guy won't abide by if he finds a different house he wants. And First National Bank will just keep helping him do it.