Many REO buyers hit financing snag

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Remember when lenders were content to sell foreclosed homes to any qualified buyer? Their popular message was, "We're in the lending business, not in the real estate business." With the large number of REOs (bank-owned properties) overwhelming most mortgage lenders and driving many others out of business, it's curious that some are making stringent demands on how foreclosed homes are financed. A few lenders are even requiring that they supply the financing for any foreclosed property in their portfolio. The policy took Tom Lasswell, a mortgage professional with Guild Mortgage, completely by surprise. Lasswell recently had a preapproved borrower who found a bank-owned property. While the buyers were highly qualified, the lender who owned the property let it be known that two other parties were interested in the parcel. "Our clients' offer was accepted, but only if they got a loan from the lender who held the property," Lasswell said. "If they wanted ...