Can Lender Force Particular Escrow Agent/Company?
Hello,
I am in the process of purchasing a new home. I was wondering if it is legal for my lender (e.g., Wells Fargo Bank NA.) to force me to use a particular Escrow agent/company (i.e., as a condition of the loan I must use the escrow agent/company that Wells Fargo specifies; I cannot choose my own). The reason why I am concerned is because the escrow agent that my lender mandates is substantially more expensive then other Escrow agents. Moreover, my lender is passing this cost onto me.
Does anyone know if this conduct is legal and if so what the applicable law is?
Thank you in advance for all your assistance.
Adrian
Update:P.S., I am in California, if that makes a difference.
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If it's a regular sale, you know, a party is selling and you're buying, traditionally the SELLER chooses the Escrow and Title companies to be used. It would be in writing in your Purchase Contract. Traditionally again, on a normal sale, you split the Escrow fees. If it's a bank owned REO or short sale, then the lender hold the cards on that. The Buyer rarely on any purchase has the choice on this
In a Bank owned or short sale, all the paperwork and title etc are usually pre-set up before a Buyer comes into the picture.
fact; no one can force anything in a RE deal.
CAN a lender play games with a borrower; sure and they do so
all the time.
contact the GM and ask them "what's up?"
if they say "that's our policy", go to a dif lender and then
inform the banking commission and the real estate commission
of this approach. And the state atty general.
but first, find an alternative lender
sorry about their obstinacy
Generally whoever is paying the fees chooses the vendor. This may be a little different if the new home you are buying is an REO (foreclosure) or short sale, but I'm not certain of that.
I would certainly talk to my loan officer and ask them to explain the rationale. Also, look at your copy of the GFE you were provided, and see if this is listed in the area of "Required services that you can shop for"
Its not illegal and many lenders have in house escrow divisions. If you do not want to deal with them find as different lender willing to work with you.
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