Many REO buyers hit financing snag

Can lenders dictate loan in bank-owned sale?

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 (real estate owned) 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.