If you have a commitment from the lender, then they cannot just change their mind unless they found something wrong with your application (i.e. undisclosed credits, wrong information on income source, different source of down payment as what was presented initially) . If you do not have a written commitment from the lender and you only have a verbal commitment, it may be difficult to bring them to court. The way we do pre-approval is like getting a real mortgage - submit all relevant documents up front and get the lender give us a mortgage commitment good for x-days. This assumes that your financial condition would be the same or better when the mortgage application with a property is submitted.

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I was going to buy a foreclosed home on a personal line of credit with a bank (the house needed work, and i was told i could not get a mortgage for such a home). i was told how much they would increase my line of credit and even received a signed letter on letterhead (even wrote when the funds would be available) to offer to the realtor. the realtor accepted my bid and asked for a deposit to hold the home. i did so. i check the line of credit to see if the funds were available yet, and they weren't. i called the bank to see what was going on. and they seem to be going back and forth about the credit line. i asked what the worst case scenario would be, and now they might not approve the credit (even though they said it was approved and not pre-approved), but i already put my deposit down. can they do this? and can i get my deposit back?

You can get your deposit back if you made the offer contingent on you obtaining financing. Until you have a signed contract from the bank they can withdraw the approval. "Pre-approval" is very loose, they do it without looking too deeply at your qualifications, even taking your word for many issues.

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My daughter is buying a house. the agent suggested to make an offer. the loan officer provided a preapproved letter of loan. the price range was kind of too high compared to the previous homes that was offered. the offer was accepted. i, the dad provided the deposit of 10k. now, my daughter can't qualify for the loan, hence was turned down. tried it twice, until she got her fiance to cosigned for her. they got approved but before signing, the fiance changed his mind and they cancelled the transaction. the bank is now forfeiting half of the $10k deposit. what can we do. is it fair for the seller to forfeit half of the deposit? how about us as buyers, what is our right in this situation?

The problem happened when your daughter obtained financing and then backed out. If they were never approved you would have gotten it all back. At this point the bank is being very generous refunding part of the money, they really do not have to when the buyer defaults on the sale.