Mortgages – Pre-approval – Misrepresentations

Where (1) two plaintiffs entered into an agreement to sell their home and (2) after the buyer backed out of the deal, the plaintiffs filed a complaint against a defendant bank that issued a mortgage loan pre-approval letter to the buyer, the bank’s motion for summary judgment should be denied because a reasonable jury might conclude that the plaintiffs’ claimed losses were a foreseeable result of the bank’s allegedly false representations.

“Syed and Polly Bokhari entered into a purchase and sales agreement to sell their home. They say they did so in reliance on a mortgage loan pre-approval letter that the bank issued to the buyer. The pre-approval letter told the buyer that the Bank had approved them for a mortgage loan based on its ‘review of your credit profile and verification of you assets and income.’ The Bokharis have presented evidence that this representation was false, and that in fact the Bank had not looked at the buyer’s credit profile and made no attempt to verify their assets and income. The buyer then backed out of the deal and made plans to buy a different home, after which the Bokharis could not find a new buyer. The Bokharis contend that their inability to sell was the result of them taking their home off the market and then putting it back on, which allegedly created a perception in the market that there was something wrong with their home.

“The Bokharis have sued the Bank, asserting claims for intentional fraud, negligent misrepresentation, and engaging in unfair or deceptive trade practices in violation of G.L.c. 93A.

“The Bank has moved for summary judgment on all three claims, arguing that it cannot be found liable under any of these claims because (i) the injuries claimed by the Bokharis were not foreseeable, so the Bank’s alleged misconduct could not have been the proximate cause, and (ii) the Bokharis’ sale of their home and their alleged subsequent difficulties occurred only because the buyer decided to breach the P&S Agreement, and thus the buyer’s misconduct was a superseding cause that cuts off any liability for the bank.

“In the alternative, the Bank seeks summary judgment as to the c. 93A claim on the further ground that it had no business relationship with the Bokharis.

“The Court will deny this motion because the Bank has not established that it is entitled to judgment in its favor as a matter of law on any of these grounds. …

“The Bank argues that ‘the Bokharis cannot establish proximate causation’ because ‘the Bokharis’ injuries here fall well outside the scope of reasonably foreseeable risk arising from the Preapproval Letter.’ The Court is not persuaded. …

“In the circumstances of this case, a reasonable jury might conclude that the Bokharis ‘were among those’ that the Bank ‘had reason to expect would rely upon its statements,’ and that the Bokharis’ claimed losses both flowed from the Bank’s alleged fraud and were a foreseeable result of the false representations. …

“The Bank also argues that the buyer’s decision to breach his P&S with the Bokharis was a superseding cause that broke any chain of causation between the Bank’s Preapproval Letter and the Bokharis’ claim injuries. Once again, this is not an issue that can be resolved on summary judgment. …

“The Bank’s further assertion that it cannot be held liable under c. 93A because it had no direct commercial relationship and never entered into any transaction with Bokharis is also without merit. …

“The summary judgment record would support a finding at trial that the Bank was operating in a business context and interfered with trade or commerce by intentionally or negligently misrepresenting the basis for its pre-approval letter, which had the foreseeable effect of inducing the Bokharis to enter into the P&S.”

Bokhari v. North Easton Savings Bank (Lawyers Weekly No. 09-011-26) (5 pages) (Salinger, J.) (Suffolk Superior Court) (Docket No. 2484CV01291-BLS2) (Feb. 18, 2026).

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