Why do some houses say they required a pre-approval through a certain bank?I've been looking through some homes, I'm preapproved through a local credit union but I noticed on the realtor web site it says "Property is being sold 'as is'. Bank of America Home Loans and VA addendum's required. Free appraisal if buyer finances through Bank Of America Home Loans.... |
More than likely, the owner, i.e., after foreclosure is Bank of America, or in the case of a short sale, the lender is Bank of America (prior to foreclosure). The banks do this so that they don't waste time with borrowers who are not qualified to buy a house. This happens a lot in this market.
Additionally, if the borrower/purchaser is qualified, Bank of America would like to get the loan, turning a non-performing asset into a performing asset (loans are assets for Banks). And,
Finally, the more items that the bank can control, the greater their chance of the most recovery from their investment. They can approve loans quicker in many cases on an REO property (real estate owned [by the lender]), thus reducing their carry costs.
Please keep in mind that it is a RESPA violation to "force" a borrower to use a particular lender, title company, etc. The borrower has the absolute right to use whomever they like. However, the Lender is more likely to enter into a purchase contract if they have prequalified the borrower. It's ok to get prequalified by the bank, then you can choose who you want to use for financing, the lender or the Credit Union in your case.
The home is foreclosed due to a default on VA backed loan through BOA. They want a preapproval from BOA to ensure you are actually qualified to get a loan of the purchase price. You do not need to use BOA to purchase the home, ask if the home is eligible for VA Vendee Loan. It's has some pretty favorable terms and you do not need to be military for it...
The only thing I can think of would be 1) if the realtor is getting paid by Bank of America to steer business their way, or 2) if BoA owns the house through a foreclosure, 3) The sellor is upside down on his mortgage and is forced into a short sale.
My advice: Run.
BofA owns the house
