B, Home Buyer in DC,MD,VA

why must I be approved through seller's lender?

Asked by B, DC,MD,VA Sat Nov 22, 2008

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7
why don't you just assume their loan - see if that' s possible - especially if it's a deal.
Web Reference: http://www.tommcgiveron.com
0 votes Thank Flag Link Sun Nov 23, 2008
The buyer didn't say she was being forced to use the company. They just don't want to waste their time with flimsy buyers.
Directly from hud:You have the RIGHT to shop for the best loan for you and compare the charges of different mortgage brokers and lenders.

http://www.hud.gov/offices/hsg/sfh/res/resborwr.cfm

If this is a shortsale or REO this is done a lot.
0 votes Thank Flag Link Sat Nov 22, 2008
B... on some levels, Fred is right, and I support any efforts to make this stop. However, I can tell you that REO business is competitive, as most are priced very well. So, assuming that's what we're talking about, they can simply select another contract if you refuse to pre-qual with them. Not only that, but you increase your chances of getting the contract if they THINK you will use them.... I know this to be true in the case of Countrywide, more than one loan officer has told me this. Personally, I despise it; and I am yet to sell a Countrywide owned home. I have sold many other REOs, just not any that are Countrywide. So, act like a dumb-dumb when you meet with them. Make them think you'll take their loan. After the contract is ratified, go get your financing somewhere else out of spite. The big bullies.
0 votes Thank Flag Link Sat Nov 22, 2008
THEY CAN'T! It is a violation of a federal law called RESPA. They cannot make you a better deal if you use their mortgage company. Use anyone you want and contact the local U S Attorney's office if they give you any grief.

You have 100% freedom to use anyone for mortgage and title insurance and don't let anyone tell you any different!

The National Association of Mortgage Brokers has fought this illegal act against major builders and it getting somewhere with it.
0 votes Thank Flag Link Sat Nov 22, 2008
A seller can request that their own mortgage company pre-approve you; they cannot force you to use them. The mortgage company is hoping to get your business.

The big exception is: If you are serious about purchasing, have your lender do a FULL pre-approval. Submit your documents for written verification; go through the entire application process. Ask your lender to present you with a "pre-commitment" based on only 2 contingencies; a contract and an appraisal.

You will be househunting with a doc in your hand that makes you as close to a cash buyer as possible. You should be working with a Realtor to represent you and be able to present this info to the seller, showing you do not need a simple pre-approval, you already have something much more valuable.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Sat Nov 22, 2008
As Vicky said, this is not an uncommon request. It is used to confirm that you are truly a viable buyer. Think of it as another set of eyes on the transaction. I have been able to forego the process with some of my customers by requesting that the seller's lender contact the buyer's lender to discuss the buyer's ability to get a mortgage.
0 votes Thank Flag Link Sat Nov 22, 2008
This is a common request from builders (although I am seeing them be more flexible on this as loans become harder to originate); and also from bank sellers of post foreclosure properties (REOs). With REOs, if you want a financing contingency, then the short answer is yes, probably you do have to be pre-qualified through them. You do not have have to use them.
0 votes Thank Flag Link Sat Nov 22, 2008
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