Here's a practice that just needs to be religated to the sewer system. The practice of demanding a preapproval letter from "your" lender. Bull. Yep. You read that right. It's bull.
Currently I have one buyer who STARTED with a Chase preapproval, had to get a Wells Fargo preapproval, because Wells owned the REO, then had to get a Prospect Mortgage preapproval (are you kidding me?) and is now getting a Bank of America preapproval. It's not like they have gotten a single property yet either.
Now if my original preapproval had been with Dewey Cheatum and Howe Mortgage, I would accept that we needed one from a big direct lender. That makes sense. If our original had been signed in crayon, yeah, I get that. But we STARTED with a preapproval letter from Chase Home Loans signed by a AVP. It even mentioned verified funds. The only thing it didn't have was a wax seal and a ribbon on it.
So why are these REO banks and agents insisting on their own preapproval letters when they have a good one to start? I know! I know! Because they think they can recapture the business. Seriously? If you force someone to get a preapproval through your company does it really make sense? Once it comes down to brass tacks they're going to go to where they feel comfortable and safe. If you strong armed them into using your guy in order to write an offer on a property, does that make for a comfortable relationship? Not really.
Let's start being a little smarter about this. A verified preapproval letter from a nationwide direct lender ought to be good enough for every REO out there. Every one.
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