As far as if you can sue, you would have to check with a local real estate attorney in NJ. You should have the right to cancel the contract if the contract date has expired and gone past any extension dates. It is up to you.
If you like, I can try to find out some information for you in NJ since I work for a national FHA lender. Ask if a case number has even been assigned to the property. I would think since the appraisal was done 7 weeks ago, it should have closed long by now. There isnt that much difference between a Single Family dwelling and one with 4 units.
Another thing I dont understand is why they wanted them vacant. They can actually use the leases to help them to budget and reduce the debt to income ratio which has to be 31% of the gross income. Max total bills cannot exceed 43% of the gross income.
One very important thing as well is they need to be able to prove all of their income. They cannot go stated on an FHA loan.
This is a very confusing loan. It could be the loan was structured wrong to begin with. If it was me doing the loan, I never would have ordered the appraisal until I knew the loan had already been approved.
I just got a loan yesterday on a similar situation where the buyers should have been in the house a long time ago and they still hadnt gotten anywhere. I had them doc'd out yesterday and approved (it was an automated accept verses a manual underwrite) I should have the loan closed in about two weeks. And this was on a manufactured home, which are hard to get approved these days. A lot of things these days depends on the experience of the loan officer handling the loan. FHA loans are different than subprime loans, alt a loans and conforming loans.
Let me know if you need anymore help.
Good luck
Anne
