How can I find out if Loan Agent screwed up?

Friend of mine just tried to purchase a home. Credit is ok, but stable income is an issue. However, the real estate company (which acts as lending broker and realtor) have given him positive assurances for several weeks. It's been nearly a month and he keeps being told all is fine. He was told three weeks ago to give notice at his apartment as of the 1st. Twice last week he was told he'd get the final dox and keys in the coming days. Today, (31st) he was told the bank rejected the loan because of the shaky income. Seems to me this means either the broker sat on the paperwork for a couple weeks before submitting it, or the bank rejected it a couple weeks back and the lender's been looking for alternatives. Long story short, tomorrow's the 1st and he and his roommate have to be out of the apartment...they can't extend it. Broker says he's looking for other lenders (at a now higher rate). Is it likely the bank took a month to decide income was an issue?

Answers:
Your friend needs an attorney. And a call to both the state banking regulator and real estate licensing board would be in order as well. Your friend was complicit in the mortgage fraud by allowing the deposit to his account but coming clean quickly may help to minimize his legal exposure. (Personally I'd empty the account as well, but that's just me.)
Yes, I think the real estate broker screwed up.

It sounds to me like your friend did not qualify for the loan to begin with, but the real estate company and the loan officer tried to slip it by the lender and the lender caught what they were doing and denied the loan. The fact that they deposited money in your friends account makes that particularly clear.

It is not legal for the real estate broker or loan officer to deposit money in your friends account to make it look like your friend had the money in the account if that is part of the requirement to qualify for the loan.

My recommendation is that your friend insist that the real estate broker find your friend an equally desirable apartment at the same rent that he was paying or less, or the real estate broker should be prepared to have your friend come live at the real estate brokers house rent free until he finds him another house and a loan that he can qualify for.

The real estate broker who deposited the funds in your friend's account also has the problem that those funds now belong to your friend. I recommend that your friend keep those funds as damages for what the real estate broker did to him. The real estate broker will be furious but he has put himself in a position that he cannot force your friend to give him the money back.

The real estate broker outsmarted himself.
The loan company did not only screw up, but engaged in lender fraud. Any loan brokerage which deposits such finds in a client's account to deceive the underwriter should be reported to the Attorney General of whatever state in which this occurred.

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