A home buyer participated in an online auction for real estate. This is an auction house associated with a major mortgage servicer that sells REO properties by auction. After the auction the buyer received paperwork to sign and return. The buyer asked when the paperwork was due, and was given a date. The day before the deadline, the auction house contacted the buyer and told him that the sale had been canceled.
Even without signing the documents, the buyer was contractually obligated to buy the property by virtue of being the winner at auction. How can the seller have the right to back out?