Financing in Los Angeles>Question Details

Bobaboba, Home Buyer in Los Angeles, CA

Is this a trick from the builder preferred lender?

Asked by Bobaboba, Los Angeles, CA Thu Jun 18, 2009

We are in process of buying a unit in a new construction condo in Southern California. We have our own lender, and rate locked. Escrow has been open for a week or so. Builder has a preferred lender, but told us that we can use our own lender anyways. Today I got a strange call from the inhouse lender, saying, "oh, we are working on the project loan with bank xxx. the agent at bank xxx reminded us to let you know to make sure if your current lender is obtained through retail or wholesale. If it's retail, there will be problem closing. You can only close on a loan obtained through wholesale." and the funny thing is that, our lender and their lender are both bank xxx. This sounds a false impression to me that the inhouse lender was trying hard to get our business. But at teh same time, i hope we dont let this fall trhough the crack (if there's a crack of such). Anyone please offer advice?

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it's a trick and blatant lie. Corey is 100% correct. It's a shame that the builder's lender would resort to "blatantly lying" in order to steer you to try to do business with them. The real estate/lending crisis has forced many of the bad apples out of the business, but obviously not all (which is unfortunate). Keep preparing your loan with your lender and make sure you're ready to close on time to avoid any types of penalties they may try to impose...
0 votes Thank Flag Link Fri Jun 19, 2009
Bobaboba, it does sound like a bunch of BS. Wholesale lenders market to other lenders or brokers, so the public wouldn't deal with them directly unless they had a retail division. Stand your ground usually the builder benefits in some way (they may own a piece of the lending unit) when clients use the in house lender. Just make sure you have allthe contracts signed and if you are getting upgrades dones finish off the paperwork as soon as possible.

I use to sit on a condo project years ago and the reason was the builder once owned our company but had recently sold it. After a few years the builder dropped us and used the personal mortgage unit of the bank that funded his building project.
0 votes Thank Flag Link Fri Jun 19, 2009
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