There are two reasons why they sometimes require this:
1. They want to keep the loan - as stated below.
2. They want to make sure you are truly qualified and will be approved for the financing. Although you may have a legitimate pre-approval from Wells Fargo, they don't know specifically what the criteria your lender used when qualifying you.
Requiring you to qualify with their lender gives them a "lead" and the opportunity to sell you on their lender, and also acts as a "double-check" for the seller that you will be ultimately be approved.
Hope this helps!
The Lender just wants to keep the Loan on that house, in-house.
Being a Marketing major; I can see both sides of that coin.
Normally, we can see that requirement before we make an offer.
A simple phone call to the Listing Agent can confirm this.
It is not illegal nor unethical. Just a pain in the behind.
As a Buyer's Agent is try to avoid these, for my client's sake; but with a dwindling inventory.....