Bank called daughters credit union to cancel loan

[flipper35]

What would you all do?

According to our real estate agent:

My daughter made an offer on a house that had been foreclosed on. During the offer the bank that had the house called her credit union and told the credit union not to process the loan because it isn't worth it. The bank then accepted an offer from another party since.

It is fine to reject an offer, but to call her credit union to tell them to deny the loan is a dick move to me.

Doubt anything could be done but it sure seems like a line has been crossed here.

Had to vent either way, thanks for listening.

[wildthing]

Total dick move. Doesn't sound like any laws were broken though. So maybe just exposure of their shady practices... Get the local news involved.

[Tobra]

Make them famous

What bank did this?

[flipper35]

Benton State Bank in Benton WI.

They are known for doing crap like this, but what can you do if the house was reasonably priced.

[Tobra]

It is not slander or libel if it is true. Tell as much truth about them as you can.

They told them not to make the loan, because it was not worth it. They then turned around and did the deal with someone else.

Maybe they did this because she is a female, or something. The least you can do is make them uncomfortable

[Zeke]

Bank that had the house....

The bank then accepted an offer from another party since.

I'd sure want to know the relationship of the new buyer to the bank. I would not say a word until I did. But that's how I work in general. Quiet while poking around.

Now the other party could have had cash but that should not make a difference on the bank that held the deed balance sheet.

I don't like it.

[HobieMarty]

That is an extremely unethical thing for a bank to do, and surely there would be something that could be done about it.

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[Alan A]

Originally Posted by Zeke

Now the other party could have had cash but that should not make a difference on the bank that held the deed balance sheet.

Cash is king.

Especially if it’s up against a jump through hoops to get a mortgage source of funding.
Remember the house has to be fit to occupy or the mortgage won’t fund, and you can’t fix stuff until you own it. Catch-22.

We bought a repo in 07. It took paying cash to get it. We borrowed the $.
We closed two days from the offer being accepted - it took that long to get the funds into escrow. If we’d had to try to get a mortgage we’d be living elsewhere.

[Zeke]

@Alan A, I think you're right.

[flatbutt]

Did she take a hit to her credit? If so then maybe she's due damages.

[flipper35]

The credit union had already seen the pictures and was waiting on the appraiser, but the current appraisal was $15k above the asking price. The house was livable unless there was an issue with the foundation that we could not see.

There were ceiling tile missing.

[flipper35]

Originally Posted by flatbutt

Did she take a hit to her credit? If so then maybe she's due damages.

Good question.

[dad911]

Did they accept her offer/ was she under contract?

[Alan A]

Originally Posted by flipper35

The credit union had already seen the pictures and was waiting on the appraiser, but the current appraisal was $15k above the asking price. The house was livable unless there was an issue with the foundation that we could not see.

There were ceiling tile missing.

Here a broken or missing sink in the kitchen is enough that a CO can’t be issued.

You almost certainly lost out to an equivalent cash offer. Unless you were in escrow there’s nothing - other than ethics (from a bank - ha) - preventing them taking a different offer.

Their duty is to their investors and a guaranteed close now > wait some.

[look 171]

Happens all the time. Happened to me when we were just about to close the deal on a heavy fixer up in Lake Arrowhead (Mountain vacation home) the day we were going to close. This was a Fanny Mae house, they owned the home and pulled it right out from under us and ours was an all cash offer with no contingencies. I was pissed. No explanation, nothing needed on their end.

Most banks dislike loans on fixers. Liability it often too great when owner decides to walk within the first couple years.

[group911@aol.co]

Depends on if they sold it for less to the other buyer. If less, that would increase the default judgement for the party that was foreclosed on. Seems like the bank would have a fiduciary duty to get the maximum possible.

[flipper35]

Originally Posted by dad911

Did they accept her offer/ was she under contract?

They accepted a different offer. The guy usually does this so his friends can get good deals. You sabotage someone's offer so the friend can make a lower offer.

[dad911]

Originally Posted by flipper35

They accepted a different offer. The guy usually does this so his friends can get good deals. You sabotage someone's offer so the friend can make a lower offer.

If she didn't have a contract, I don't see any recouse.

Banks are tough to deal with. I've had deals killed after contract, during attorney review(that's a thing in NJ, either side can cancel until AR is over). And I've seen some of these bank properties transfer for less than my cash offer.

[Zeke]

Originally Posted by flipper35

They accepted a different offer. The guy usually does this so his friends can get good deals. You sabotage someone's offer so the friend can make a lower offer.

And I said this but was trumped by cash is king. Which I think it is. The possibility is strong.

[svandamme]

how the hell would that bank have known where your daughter had a request for a loan???
Don't you guys have any kind of consumer privacy laws in the US?

Here in Europe none of this would be possible or legal.