Consumer complaint received 2017-03-12 00:00:00
Product: Mortgage — Conventional fixed mortgage
Issue: Application, originator, mortgage broker — 
Company: K. HOVNANIAN AMERICAN MORTGAGE, LLC
State: FL

Complaint narrative:
In XX/XX/XXXX I signed a purchase contract with K Hovnanian Homes in XXXX XXXX, FL for a new construction single-family home to be built by XX/XX/XXXX. The contract had a financial contingency clause that was supposed to protect my family from losing the deposit ( earnest money ) in the event I could not find financing. Unfortunately, the lender that had initially approved my loan, withdrew the offer months later and I was not able to find alternative financing. As a consequence the builder retained the deposit in the amount of {$44000.00}, in flagrant violation of the contingency clause. Any attempts at settling the issue amicably failed. I entertained suing, but after that financial blow I was left unable to afford proper legal representation. The following is the timeline of events for your perusal : XX/XX/XXXX : Visited model home. Discussed with Sales Rep about next step to put property under contract. 
XX/XX/XXXX : Applied for credit to K. Hovnanian Financing company XX/XX/XXXX : Applied for credit to XXXX preferred mortgage program XX/XX/XXXX : Denied credit by K. Hovnanian Financing company XX/XX/XXXX : Applied for credit to XXXX XX/XX/XXXX : Contract signed. Earnest money deposit made by check in the amount of {$44000.00} XX/XX/XXXX : Approved credit by XXXX. Letter of approval forwarded to Sales Rep XX/XX/XXXX : Invited by Sales Rep to attend pre-construction meeting with construction supervisor. I was told construction would probably start in the following couple of weeks. XX/XX/XXXX I visited the property. Foundation trenches have been dug, no significant construction started yet. 
XX/XX/XXXX : Received a follow up call from XXXX Re : Approximate closing date. Advised to pay off credit cards and at least decreased car loan balance or else I may risk lender revoking approval. 
XX/XX/XXXX : Called K Hovnanian Sales Rep to let him know about the call I received form the lender and how it made me uncomfortable as I felt uncertainty of approval during the conversation. I suggested they do n't start construction until I worked out the issues raised by the lender. I was reassured that delaying construction was not necessary. 
XX/XX/XXXX : Credit denial letter received from XXXX. 
XX/XX/XXXX : Letter forwarded to K Hovnanian Sales Rep. Instructed to apply for credit to one of the builder-affiliated " back up '' lenders. 
XX/XX/XXXX : XXXX representative contacted. Requested application form. After this conversation he told me there were no guarantees he could finance me but the minimum interest rate would be 7.5 % above prime. 
XX/XX/XXXX and XX/XX/XXXX : Tried to negotiate directly with sales department a financially acceptable solution for the parties. 
XX/XX/XXXX : Default letter received from the builder. I replied requesting full refund of earnest money. 
XX/XX/XXXX : Received application form from XXXX. Filled out application, submitted documents requested. 
XX/XX/XXXX : Informed by XXXX that " the loan is definitely doable with the terms we discussed '' ( high interest rate ) XX/XX/XXXX : Informed by K Hovnanian Sales Director that my refund request was denied. In that e-mail I was given the following ultimatum : " You now have through end of business Friday XX/XX/XXXX to complete the application process and hopefully secure a loan or we will have no choice but to terminate the agreement, retain 100 % of your deposit and begin marketing the home for sale once again ''. I did not reply and have not had any communication with them since, as I felt I needed first your legal advise and potentially your legal representation.

Company response to consumer: Closed with explanation