Once you give them your down payment, you go into attorney review, at which point each side review details of the contract. Usually, during this time, you'll write into the contract that the buyer has 30 days to acquire financing (or some number like that). At this point, the buyer places the down payment (or a percentage of it) into escrow as a good faith payment. If the buyer is unable to acquire financing by the date, the sale is cancelled with the down payment being returned.
However, once financing is guaranteed by the bank, both sides agree that they are going through with the sale, and any reason to cancel now means the buyer would lose his down payment.
In this case, the bank pulled funding at closing because they realized that documents were provided fraudulently. Hence, lost down payment.
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I didnt understand why the two protagonists, Jie Chen and Ariel Chi, lost their down payment because the bank withdrew the loan offer at the closing
Once you give them your down payment, you go into attorney review, at which point each side review details of the contract. Usually, during this time, you'll write into the contract that the buyer has 30 days to acquire financing (or some number like that). At this point, the buyer places the down payment (or a percentage of it) into escrow as a good faith payment. If the buyer is unable to acquire financing by the date, the sale is cancelled with the down payment being returned.
However, once financing is guaranteed by the bank, both sides agree that they are going through with the sale, and any reason to cancel now means the buyer would lose his down payment.
In this case, the bank pulled funding at closing because they realized that documents were provided fraudulently. Hence, lost down payment.
I'm guessing this is referring to "earnest money".