I just closed a home that turned out to be a nightmare for everyone because the mortgage company dropped the ball more than once. My client, a highly qualified buyer, chose the seller's recommended lender because they offered closing cost incentives. The home was a foreclosure and we needed to do a 203K loan. Yes, a little bit of a challenge, but nothing out of the ordinary.

Here is an article which hopefully will help others avoid the pitfalls of choosing a bad lender.