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Can the new bank change the terms of my loan contract?

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No. Federal and state laws alike require the new bank to honor the terms of the mortgage contract that you signed when you purchased the house. About the only thing that the new bank can do is to demand that your future payments be mailed to a new address. We signed a contract to buy a home last month and made a $2,500 "good faith" deposit. We canceled the contract a few days ago because we found an even better house at a lower price. Although the seller of the first house has the right to keep our deposit, will we be able to deduct the "lost" $2,500 on our next tax return? Probably not. Rules published by the Internal Revenue Service state that a home buyer cannot take a deduction for a deposit that was legally kept by the seller. You don't dispute the fact that the seller had the right to keep the deposit, so the IRS won't give you a tax break for your sudden change of heart. You might, however, be able to deduct your $2,500 loss if you can prove to the IRS that you were planning ... more
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