I recently worked with a buyer who said they had a preapproval letter from a lender. I had not heard of the lender, but there are a number of small reputable lenders out there. We found a home the buyer loved, wrote an offer and it was accepted. Then came the time when we were waiting for the final loan approval. We waited and waited. Then the underwriters ask for the buyers tax returns. I know the lender should have asked for 2 years of tax returns before they gave the preapproval. Unfortunately the buyer had not saved copies of his tax returns and while waiting for the IRS to send them, the deal fell apart and my buyers lost their dream home.
I caution all buyers out there, to make sure you have more than one preapproval or ask your realtor to recommend a reputable lender, one who the realtor has worked with before and has an excellent relationship with. Some preapprovals are not worth the paper they are written on.