Profile picture for jamesallen74

Can a bank that "owns" a property force a buyer to use them for the new mortgage?

I saw a bank-owned property on MLS that said "Offers require proof of funds or preapproval thru Bank of America."   Can a lender or seller do that, force you to use their own bank or a specific lender for a buyer's mortgage?  I am assuming the "proof of funds" part regards cash buyers.  The owner on the county website is  "SECRETARY OF DEPT OF VETERANS AFFAIRS"
  • August 08 2012 - US
  • 0Yes

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Answers (4)

Profile picture for nathancolejr
They can make you have a prequal letter from them, but you can use any lender you want. 
  • August 08 2012
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Yes, they can force you to be "pre-approved" by them, but can Not force you to close with them. B of A deals (in my experience) have been extremely painful to close, even when you have signed contract with their approval. The procedure seems to be a hang over from the old CW (CountryWide) days. Chase (again, in my opinion) and almost any other bank appear to be much easier to deal with on foreclosures and short sales. Just my 2 cents...
  • August 08 2012
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Profile picture for Go Huskers
Then can make you do the pre-approval as a condition of accepting your offer but you cannot be forced to ultimately use them for your financing. You may choose whomever you wish.
  • August 08 2012
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Profile picture for sunnyview
Good question. I do not know. Many banks require proof of funds and/or preapproval through their bank for short sales or REO's, but I did not think that meant that you were required to close the mortgage with them.

Of course the bank hopes you will get the mortgage with them, but I suspect that they ask for that either to get more fees upfront or to see your financials firsthand. That being said I thought the final choice of mortgage company was yours as a buyer.
  • August 08 2012
  • 0Yes

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