Can EMD release to someone else without your consent?
Dear BP members,
I am in contract with a wholesaler. In the contract stayed that I will get a private loan with x% of interest rate. To be sure, before I did anything I asked him if there is any chance that I won't get a loan. He said I won't be turn down. So I wired EMD(Earnest Money Deposit) to the third party closing agent he provided. And I spent money to order inspection, appraisal..., but then the appraisal value comes up too low that does not meet the private lender guideline. He tried other lenders and none of them will give x% rate. I own a couple free and clear properties that I asked him to do cash out refi on them so I can free up money to buy his property. Again I have to paid for appraisal fees for the refi. So we tried that for a couple lenders, but still failed. All these effort took 2 months. So I told him I am giving up today. Please return my EMD.
I called the third party closing agent today, and she said the money already released to the seller (the person whom the wholesaler buy the property from). That was shocking to me. How can they release my EMD to someone else without my consent? Her boss is not in today, I have to call back Monday. Closing agent asked me to talk to the wholesaler. Wholesaler said that property was tired up for more than 2 months, but he will try to close another deal with this closing agent. If closed, he can give me back the EMD; if not, the chance I am getting my EMD will be very slim.
Looking back the contract, there is clause said:
"If the Contract is accepted and signed by all parties and the sale does not close, however, a separate mutual release signed by all parties to this Contract will be required before the Earnest Money will be disbursed".
I have not signed anything besides the contract. So they released the fund without my signature.
BP, what do you think? Please help what I should do next?