Can the bank of a bank owned accept/reject based on the buyers lender? (agent, mortgage) - Foreclosures, Short Sales, and REOs - - City-Data Forum

mrjhyde · 04-21-2010, 11:00 PM

I am a first time home buyer and recently submitted an offer on a bank owned property. The listing agent's notes had a vague requirement to meet with a Loan Officer of a specified bank even though I was approved through my lender already.
I contacted the specified bank and they would not approve over the phone and required me to come in. I was book at a conference the next day but wanted to get my offer submitted right away so my wife met with the Loan Officer. She was in for 3 minutes. They gave her the rate and told her to have me call if I wanted a loan through them. My wife asked if any paperwork was needed for when my offer was submitted and they said no.

I called my agent and said that I had met with the specified bank. She called the listing agent and he said they needed a letter of explanation of loan approval, which is what we thought we we supposed to get when we met with the Loan Officer.

I contacted the person My wife had spoken with at the bank and she said that the listing agent was wrong and that a form was not need to attach to the offer when it was submitted. She said she would contact the listing agent to set it straight. She called back and said it was all taken care of. Meanwhile I contacted my agent and asked her to verify that our offer was being submitted.

The listing agent said we could get the letter we needed through another Loan Officer of the same specified bank. We went through them. That Loan Officer said we would not get an LEO if we were not going to get the loan through their bank and it would be a waste of time for them to do so. That Loan Officer also said that the bank would accept an offer over ours, even if it was less but through their bank!

Is this even legal? It doesn't seem right.

texdav · 04-21-2010, 11:25 PM

If they own the property they basically can sell it to who they want to.

Brandon Hoffman · 04-21-2010, 11:38 PM

A seller, whether a corporation or an individual, can elect to accept or reject an offer for pretty much any reason they want.

palmcoasting · 04-22-2010, 08:30 AM

No. It's not. The bank can not force you to do anything but get pre-qualified through a trusted mortgage broker so they know your pre-approval is actually a good one and you can complete the deal.
They can at some point choose to go with whatever deal they wish to BUT.
What the bank is looking for is a pre-approval letter from the loan officer. Get it. Tell them, sure, I'll go through you if they accept the offer. Get the pre-approval, get your offer accepted and then go with who ever you wish to go with to secure the loan. I have yet to see any addendum from a bank owned property stating that you were required to or were agreeing to get a loan through bank such and such.

Narfcake · 04-22-2010, 09:10 AM

A waste of time? Sounds like one lazy and/or misinformed LO.

The legal aspect ... yes, they can base a pre-approval on the lender, but you don't have to get it from them. That was written in my purchase contract. Reason being ... by getting approved by their own lending division, they've got better assurance the deal can be completed.

In my purchase, I ended up using the specified lender anyways (4.25% fixed 30). My credit union, where I was previously approved already, was at 5.125%.

mrjhyde · 04-22-2010, 06:46 PM

Thanks for all the quick responses!

I am going to love this forum. I wish I would have found it sooner.

Palmcoast, I will definately use this approach in the future. To bad I didn't know about this at the time the offer was submitted. It has now been rejected and it was a great home for the price. Time is no longer on my side. I was hoping to get an accepted offer before the end of the month for the tax credt but that may not be happening. Oh well ... God is in control.