Mortgages and lending

We were working with a bank on a new mortgage and ran into a lot of problems. I need to know what our legal options are. We submitted all paperwork necessary and the loan officer was not returning emails and phone calls. My finace’s credit report cam back with two other men matching the same name but different social security numbers and there was some debt that was not his. He signed papers on the 5th of May 09 giving her permission to work on getting the debt that did not belong to him off the report. According to Equifax, she did not make the first contact with them until June 2nd and we had closing date scheduled for June 29th which has come and gone. She ordered the appraisal and it was done, however, he (my fiancé) instructed her to order an FHA appraisal ($100 more) because she told him that if she could not get all of it off in a reasonable amount of time he would have to go FHA for the loan. We paid for the appraisal, home inspection and pest inspection and then she comes back to him and says she could not get the credit score raised enough to get him a loan at all because he actually had 1 30 day late on his current mortgage. In researching the late, they received a double mortgage payment from him in July of 08 and applied it to the wrong account, they applied it to the home equity account. The Branch manager of the bank, who is the same bank processing the new loan, wrote a letter stating that they applied it incorrectly. In the meantime because they gave us loan approval, we sold our existing house and closed on it on the 29th of May and at this point have now where to go as of July 18th. The new owner of our existing house is out of the country on business and has allowed us to remain in the house until he returns on 7/18. He got angry and went to the bank and withdrew his savings (downpayment) and closed his checking account and told them he would take his business elsewhere.

He has contacted another loan broker and this guy said that the bank needs to put a footnote on his mortgage account stating that they made a mistake in applying a mortgage payment which caused him to go 30 days late on the mortgage. They are refusing. We have the letter from the manager, do we have any recourse at all?

We are buying a $155k home that appraised at $185k and we are putting 75K down.