Legal for a selling bank to make it conditional that the buyer get new loan through t

**pk797** · 11-07-2009, 07:46 PM

Is it legal for a bank operating in the NYC area to request and actually make it conditional that only offers that are met with their own banks pre-approval and for which the buyer has agreed in advance to get their mortgage through them will be accepted?

This is exactly what is being suggested to me in my attempts to buy a forclosed home in my area of New York City- Queens.

**VegasAgent** · 11-07-2009, 11:20 PM

They can make it a condition that you get pre approved with their mortgage lender to have your offer accepted, but they cannot make it a requirement that you use their mortgage lender to get the loan! Try to get that in writing and then report them!

**pk797** · 11-08-2009, 08:04 AM

There also telling me I have to take out an addtional loan for the needed repairs/alterations through them as well. The thing is I have enough money in my account already to cover the down payment, all closing costs and the needed repairs myself, but they are insisting I still need to take out this addtional "renevation loan" through them, for which I will be charged a premium for the convenience (2-points addtional) which is also making me curious about the nature of these deals.

Sound about right to you all?

**Greg** · 11-09-2009, 05:19 AM

They are going to have a hard time selling the house you want to buy so don't let them push you around. Make your offer on your terms with your own lender.

You won't be able to get a conventional loan because of all the repairs needed so you will have to get a rehab loan.

**VegasAgent** · 11-09-2009, 03:31 PM

On the one hand, the bank wants to make sure the repairs are made so that their equity position is protected. On the other hand, you do not want to have to pay the extra costs involved in a second loan. If you have the money for the additional repairs needed why not offer to put that money in the escrow account as well as your down payment and closing costs and that money could be disbursed through escrow to the licensed contractors as the repairs are made until they are completed. You will be required to use licensed contractors, though, and you should get estimates from them ahead of time.

**pk797** · 11-12-2009, 10:55 AM

Originally Posted by VegasAgent

On the one hand, the bank wants to make sure the repairs are made so that their equity position is protected. On the other hand, you do not want to have to pay the extra costs involved in a second loan. If you have the money for the additional repairs needed why not offer to put that money in the escrow account as well as your down payment and closing costs and that money could be disbursed through escrow to the licensed contractors as the repairs are made until they are completed. You will be required to use licensed contractors, though, and you should get estimates from them ahead of time.

This is essentually where we are at now. I actually made the suggestion of the escrow account myself already, but was meet with a direct verbal NO as a response from the banking agent involved on this as a response and it has not been entertained any further than that so far, but I obviously do agree totally and would love to know more.

My other concern is over the nature of the pay out's in the Rehab loan and how that whole phase of the Rehab Loan would works???

Is there any sites here on the net that any one of you could direct me towards that would help to outline some of these basic guidlines in this area?

Also if anyone has a decent/ semi-honest lawyer (ha,ha very funny I know) that they can recommend, that practices here in NYC that would be great - much appreciated!.