Final answer:
The potential consequence for a buyer who signs a notice of fulfillment but cannot secure financing is they might be obligated to purchase the property regardless. This highlights the significance of carefully fulfilling financial conditions before making contractual commitments to avoid legal and financial repercussions.
Step-by-step explanation:
When a buyer signs a notice of fulfillment for a condition such as mortgage financing and later fails to secure the financing, the potential consequence is D) The buyer might be obligated to purchase the property despite not securing financing. This situation occurs because by signing the notice of fulfillment, the buyer represents that they have met the conditions of the sale—even if the actual mortgage approval is still pending. If the financing later falls through, the buyer's lack of financing does not protect them from the contractual obligation to purchase the property. Without a valid financing contingency in place, the buyer could potentially lose their deposit, or earnest money, and may be subject to legal action from the seller to enforce the purchase agreement or to seek damages.
In the context of financial capital markets, this scenario underscores the importance of thorough financial scrutiny before making commitments. Banks typically require income verification, credit checks, cosigners, or collateral as insurance against non-repayment. The risk associated with subprime lending, where less attention is given to the borrower's ability to repay, can lead to financial issues both for the lender and the borrower, such as the situation described with NINJA loans.