Screwed by lender, any recourse? Out $2200
So my lender did a pre approval on me about 4 times and I confirmed with them several times that I would be able to get a loan on a non-owner occupied duplex. Fast forward to 2 weeks before closing (yesterday), my lender sends me an email AFTER my financing addendum ends stating that they do not believe I will qualify the loan, and that my income needs to be about $100 more a month. By this point, I have already done my inspection ($480), appraisal ($740) and my earnest money ($1000). My realtor even sent my lender an email 5 days before stating that the third party financing addendum will be up on the 26th, and that if I am not approved for this loan, I will lose my earnest money. On Saturday I get an email from my lender explaining how I will not be able to get the loan now. I told my lender that he needed to figure out a solution, because if they do not approve my loan, I am transferring all of my accounts away from them and canceling my credit cards etc.. He stated that he will talk to the underwriter again on Monday and get back with me.
The only solution he offered to me was to increase my down payment by about 20k. That means I would be putting down 46% on the property.... (seriously?)
My question is what recourse do I have here? Can I sue over this in small claims court? They seemed very confident when they pre-approved me 4 times... now they wait until after I spend over $2200 to tell me that I can't get a loan over a HUNDRED dollars.