The Fourth Department, reversing Supreme Court, determined that defendant purchaser did not forfeit the downpayment under the real estate purchase agreement based upon the bank’s revocation of the commitment letter:
“When a mortgage commitment letter is revoked by the lender after the contingency period, in contrast to the failure to obtain a commitment letter in the first instance, the contractual provision relating to failure to obtain an initial commitment is inoperable, and the question becomes whether the revocation was attributable to any bad faith on the part of the purchaser” … . Thus, where a mortgage commitment is revoked in the absence of bad faith on the part of the purchaser, performance of the contract is excused and the purchaser avoids the “unenviable position of either having to proceed to closing [without financing], or to risk forfeiture of the down payment” … . Notably, the fact that a mortgage commitment was revoked based on new information supplied by the purchaser does not, by itself, establish that he or she acted in bad faith … . Here, plaintiff failed to establish as a matter of law that “the lender’s revocation of the mortgage commitment was attributable to bad faith on the part of [defendant]” … , rather than to defendant’s efforts to honor his duty of fair dealing to the bank by providing it with further information regarding the proposed transaction … . Md3 Holdings, LLC v Buerkle, 2018 NY Slip Op 01836, Fourth Dept 3-16-18
REAL ESTATE (DOWNPAYMENT NOT FORFEITED BASED UPON THE BANK’S REVOCATION OF THE MORTGAGE COMMITMENT, NO SHOWING THE REVOCATION WAS DUE TO DEFENDANT PURCHASER’S BAD FAITH (FOURTH DEPT))/MORTGAGES (REAL ESTATE, COMMITMENT LETTER, DOWNPAYMENT NOT FORFEITED BASED UPON THE BANK’S REVOCATION OF THE MORTGAGE COMMITMENT, NO SHOWING THE REVOCATION WAS DUE TO DEFENDANT PURCHASER’S BAD FAITH (FOURTH DEPT))/COMMITMENT LETTER (MORTGAGES, REAL ESTATE, DOWNPAYMENT NOT FORFEITED BASED UPON THE BANK’S REVOCATION OF THE MORTGAGE COMMITMENT, NO SHOWING THE REVOCATION WAS DUE TO DEFENDANT PURCHASER’S BAD FAITH (FOURTH DEPT))/DOWNPAYMENT (REAL ESTATE CONTRACT, COMITMENT LETTER, DOWNPAYMENT NOT FORFEITED BASED UPON THE BANK’S REVOCATION OF THE MORTGAGE COMMITMENT, NO SHOWING THE REVOCATION WAS DUE TO DEFENDANT PURCHASER’S BAD FAITH (FOURTH DEPT))