Bank Demands Hurting Borrowers FICOs in Roseville CA

I have been showing a lot of REO properties lately in Roseville CA, and have noticed a new problem crop up with pre-approval qualification. Nearly every REO that I encounter that is owned by one of the big Banks (i.e. B of A, Wells, Chase, etc) is requiring an approval by them specifically in order to review an offer. At first regard, this may not seem like much of an issue. But in the competitive market of purchasing REOs and short sales in California, and especially in my local areas of Roseville CA and Lincoln CA (which were hit hard by the market drop) and the greater Sacramento Valley, buyers are commonly having to make many offers until they enter escrow as houses are selling above asking price due to lowered values and decreased inventory. So each time a buyer is making an offer, and needing a pre-approval for a listing, they are having to get pre-approved by each bank, having their credit pulled repeatedly through the home search process. Subsequently buyers' FICOS are getting chipped at bit by bit until their credit standing and qualification to buy is in jeopardy.

It was most evident of late after showing a new client some REO properties in Roseville CA and moving forward to make an offer on a particular home. They are first time home buyers and tight on credit qualification. They currently have an approval from Chase and I am concerned that if we pull again that there might be a reduction in their FICO score, leaving them without the ability to purchase the home that they have interest in. As an agent I ask that all potential clients consult with a mortgage consultant so that they know how much they can afford, and that they can be approved. I would think that if the client has an approval letter from a national bank, and that they have close to the same credit guidelines as the bank in ownership, and the approval can be verified, that the owning bank should except it. I do agree that a mortgage broker approval does not hold the same weight as a direct lender approval as it can be written in a Microsoft Word program and really does not mean much. But what I am suggesting is that our national banks should care a little more about the buyers and borrowers and not demand their own approval for every offer, and instead use an approval of another major bank as a reference. It just seems to be another example of banks needing to get back down to earth and back with the people. Let's actually work together to get these houses sold, to stop foreclosures, and get everyone’s needs met.