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My husband and I sat down with the builder to reserve our lot. We have been looking in this new homes neighborhood for 3 years and finally after fixing our credit and building up our savings we were ready to go and had our NFCU VA loan pre-qual in hand.
When we starting filling out papers and talking details they tell us that if we want to do a VA loan we can only use their preferred lender (Wells Fargo) because they have had so many delays with VA loan closings with other lenders.
We are pretty much floored. We may be stubborn but we are digging our heels in on this one. Is this even legal? Has anyone had an experience with something similar?
Thanks
I don't think it is legal.
I think they can legally say that they would PREFER you use their lender if you are doing a VA loan, but they can't force it.
They do however, have the option to accept or to reject your purchase offer.
I'd talk to them some more. Lay it on the table.
Is this a deal breaker for you???
IOBA is right. They can make it a condition for you to get an approval from their lender before they will accept your offer, but they can NOT make you use the lender. They can tie incentives to using their lender too.
This is an interesting topic. I was discussing it earlier today with some cohorts.
http://www.searchlightcrusade.net/2013/07/respa_forbids_steering_even_ju.html is a good read.
Very interesting article Shane! Looks like the builders and REO listings that require PQ's by one particular lender would be in hot water here....
@StartingOver10 wrote:Very interesting article Shane! Looks like the builders and REO listings that require PQ's by one particular lender would be in hot water here....
Potentially. Although I am figuring the author of the article probably isn't a RESPA attorney, but it certainly sounds convincing.
With NFCU, they were giving us $1500 closing assistance so right off the bat this will cost us more out of pocket but this is really less about the money and more about how wrong this feels. We feel like we are being bullied into doing what they want.
As of now we are standing our ground and trying to get them to back off and let us use our lender. Why should we make a 30 year loan decision based on the possibilities of some delays or aggravation to them? That just seems silly.
@StartingOver10 wrote:IOBA is right. They can make it a condition for you to get an approval from their lender before they will accept your offer, but they can NOT make you use the lender. They can tie incentives to using their lender too. <== that is what they usually do
if it were me in this predicament.... i would ask him to put that in writing......
illegal
Just an update. We stood our ground and the builder gave in and will let us use our lender. Because they gave in, I told them I would at least talk to their lender and investigate using them. We have an appointment to sign the contract on Thursday and a tentative closing date in early April.