Why would a listing agent Specify one Mortgage company? (agents, foreclosure, seller)

[tigger37708]

Why would a listing agent Specify one Mortgage company?
Im looking at a home and seriously considering making an offer.
Here is what the listing agent places in the description.
Sold as is. SunTrust pre-approval required for offer acceptance - call for SunTrust loan officer contact info.
Im pretty sure this house is not bank owned. Nothing like a foreclosure shows up online.
What could be the reasoning?
I am already pre-approved by another company
Could this be a seller requirement?
How binding do you think this is?
My credit is good and it was not a problem to get approved for the mortgage, just sort of a PITA if you know what I mean.
Would they really reject an offer with a pre-approval from a different mortgage company?
Just wondering because I like the house,
But I think it would be easier these days to just go find another house than to go through the pre-approval process again with another company.
Have you ever seen this before?
What is the rational?

[Silverfall]

This is becoming more common. The rational is that lending is so difficult these days that often the listing agent advises the seller to have the buyer go through a "trusted" mortgage broker that they know to confirm the strength of the buyer.

Many deals have failed at the last minute due to underwriting. The listing agent/seller is trying to minimize the chances of that happening by knowing if they are engaging in negotiations with a qualified buyer or not.

It isn't binding at all. You can tell them you aren't interested in talking to their mortgage broker, and they can reject your offer if they want. They can't require you to use the other lender but they can ask for a preapp from them.

Why not just have your agent write up the offer and just not include the other preapp letter? See what the seller does when faced with a real offer. Unless they have instructions from their seller to NOT present any offers without that Sun Trust letter, then they still have to present the offer, legally.

[KonaKat]

Silverfall is of course, exactly right but I'm with you - it kind of leaves a bad taste in my mouth. I see them quite often (nearly always) with foreclosures. I keep thinking, the chances of someone going ahead and using that "trusted" lender is probably pretty significant and that's what they are hoping for too. Smells a little off to me but evidently, quite legal. Worse yet, I have seen good incentives if one does use that suggested lender, in the listing remarks.

One would think that all these dang banks would be bending over backwards to avoid any whiff of negative behaviour. (well that's what I get for thinking........!)

[cheryjohns]

Some of these financial institutions write preapproval letters that aren't worth the paper they are written on. Oddly enough, BOA is one of the worst - with Chase and Wells Fargo trailing closely behind. I totally understand the listing agent making a preapproval by a trusted lender mandatory. If my trusted guy says it can't be done, I don't care what the preapproval letters says - the possibility of taking that house off the market while bad lenders play games and then reject at the last minute isn't worth it. Once I explain that to a seller, they don't want to take the chance. They don't have to use my lender, I just want to know the person can really get a loan - and that my lender can step up to the plate if the other lender drops the buyer in the dirt later.

The foreclosures do it because they are well aware of the situation. One of the funniest was a foreclosure that stated they would accept no preapproval letters from the big three - and they WERE one of the big three.

[KonaKat]

That is odd, because I see a lot that want a BofA pre-approval letter! you know, not funny "haha" but funny "weird"!

[DMenscha]

Originally Posted by KonaKat

That is odd, because I see a lot that want a BofA pre-approval letter! you know, not funny "haha" but funny "weird"!

The BofA approval letter can be generated online. Takes about 30 seconds and merely requires the buyer's name and SS#.

Truly bizarre.

[annerk]

Keep in mind that there is a big difference between a pre-approval letter and a pre-qualification letter. Generally in a pre-qual the letter is offered on the basis of a credit pull and information provided by the buyer but not verified. A Pre-approval is more specific, bascially an underwritten loan package less the property details.

[SmartMoney]

Actually, agents in my area have asked that I handle the prequalification for the buyer, since I already have a loan app on file. I get a release and provide the credit report to the seller's lender and attach the DU or underwriting transmittal.

Makes things a snap and keeps my buyer out of the other LO's clutches.

[Brandon Hoffman]

Originally Posted by SmartMoney

Actually, agents in my area have asked that I handle the prequalification for the buyer, since I already have a loan app on file. I get a release and provide the credit report to the seller's lender and attach the DU or underwriting transmittal.

Makes things a snap and keeps my buyer out of the other LO's clutches.

As may be, but I'm seeing more and more where asset managers on foreclosures won't accept offers w/o a PQ from their lender and they are getting stricter about it.

[SmartMoney]

The REO bank still does the prequal, just from info I've supplied them, keeping the credit report hits to a minimum. It usually works. The asset manager still has a letter from their preferred lender. It definitely works if it's Bank of America, where I can just call my former co-workers. Even in the Wash DC area, the survivors all know each other......it's more cooperative than I have ever seen it.