This was my response when inquiring about new housing “Thank you for your interest in our new home community. We are selling homes about 5 months before they’re built! We go to our Priority List first and then we sell out of the latest Phase release within a week. You can get on our Priority List by getting pre-approved by CMG Financial. I have attached their contact information. Approvals from outside lenders will not get you on the list.” I guess one doesn’t have to finance with CMG but seems a little strict.
Back in 2002, Pardee used to require you to register for a spot on their waiting list (at least for some developments) and to also put down a refundable $10,000 deposit to remain there. There were lots of people on the list . . . We eventually decided it was better to buy an existing home – it’s hard to lock in a mortgage rate if the house isn’t going to be finished for 6 months. Plus you saved yourself the cost of landscaping and all the other new home expenses.
[quote=moneymaker]This was my response when inquiring about new housing “Thank you for your interest in our new home community. We are selling homes about 5 months before they’re built! We go to our Priority List first and then we sell out of the latest Phase release within a week. You can get on our Priority List by getting pre-approved by CMG Financial. I have attached their contact information. Approvals from outside lenders will not get you on the list.” I guess one doesn’t have to finance with CMG but seems a little strict.[/quote]
This required pre-approval by CMG is more of a vetting process than anything. I don’t think you’re required/forced to obtain the loan through CMG if you get to the stage of obtaining the loan.
I have never seen a case where you MUST use the developer for financing.
That seems like it would have lawsuit city written all over it. Take my statement with a grain of salt but that would be interesting to see. I would heartily agree with HLS.
The law is 100% clear.
Per RESPA there is absolutely no way that they can require you to only use their lender.
This is black & white. It would be considered ‘steering’ which is illegal.
Requiring you to qualify with their lender may be illegal as well, but it’s a gray area.
They don’t force you to use their lender but if you want their incentives, you have to use their lender. So you use their lender then refinance afterwards.
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