I am attempting to purchase a home in California. I live in a home in Las Vegas Nevada. I am attempting to get a VA loan and my loan officer told me from the outset that I had to get a signed lease on my home if I wanted approval on my loan. I have a signed lease on my home and 2 days ago got the approval on my loan. Yesterday my loan officer came back and said hold it, the loan has been called back and may not be approved. I am still waiting for that answer but if they say no... then what do I do about the lease on my home which is a 1 year lease ? I asked how they can do that and they blamed the economy! How can this be legal for them to require me to get a lease on this home to qualify for the loan, approve the loan, then disapprove the loan and leave me with the problem of the lease besides all of the other plans to move that I have made. There is no problem with my credit which is excellent... they blame this happening on the failing economy. How can they legally do this?

Well, I understand what you are saying and agree that "they" shouldn't be able to do this... but with the current state of the mortgage industry - good luck doing anything about it.

Do you have a written copy of the approval? If so are there ANY contingencies listed?

Also, if you have excellent credit, go to your local bank and get a loan from them. Many local banks are not feeling the crunch and should be able to offer you a loan with similar terms.

You can always retain legal representation and threaten to sue them or sue them for any damages you experience as a result of this, but I don't think that's a very practical option.

I have several real estate investor friends who are having "approved" buyers' financing mysteriously fall through at the last minute. It's just very common right now.