Bank's unethical techniques - what to do?

[Tomasz Banas]

I got one condo under contract (buy & hold). After receiving the condo questionnaire I found this condo is a non-warrantable. I was able to find a local bank by searching for properties that closed in the same complex in last 12 months and owner's address is different than the property's address (most likely an investor). By filtering it down this way I looked who financed it and Voila! First, I provided them a condo questionnaire to make sure they are 100% ok with the condition of the complex. They confirmed it's ok. During the process I was informed that the president of the bank (its a small bank with 7 locations) is interested in a long term relationship and would appreciate if I bank with them and not just get a loan. I said I will be happy to consider but I am not ready to move my banking as I don't like to get pregnant at the first date. They did not have a problem with that. On Friday, I received an email: "The President has the Loan Underwriting on his desk. He wants to know if you will move over your business account to the Bank if he approves the loan." I did not change my position and reminded them what we talked about 2-3x. I said I will be happy to open savings account for security deposit and checking account for that property. Here's the reply I received: "Oh yeah, I remember! But here’s the thing, the President will not approve your loan unless you bring your business account over in addition to those other accounts." I was extremely surprised and sent them a long response regarding their technique. 3h later I received an email directly from the president: "I am not interested in doing the loan unless I know that I will have a deposit banking relationship that is satisfactory and acceptable. The bank has slowed down its lending in the market as to this product and is considering the requests based on the value of the deposit relationship. At this point, I thank you for considering our bank, but we will pass on this commercial mortgage opportunity." How can they go through the whole process including a verification of my financial information and come up with something like this right before providing a mortgage commitment? I am obligated to provide a mortgage commitment by 3/15. If not, I'm going to lose this deal. Seller has multiple cash offers $10k higher than my approved offer. Please help! Thank you in advance!

[Ann Bellamy]

@Tomasz Banas, this is not "whatever it takes to get a deal".  This is just normal business practice.  In fact, it is probably just a given for them, and you are blowing it out of proportion, in my opinion.  

There are lots of requirements in the business world that aren't immediately disclosed, because it is either such common practice that it's not worth mentioning, or it is considered to be not terribly significant in the early stages of the conversation.  This is probably the former.

Here is an example:  Most hard money lenders require that you close with their title company.  In fact, when you get a mortgage from most banks, they choose the closing attorney or title company.  Very common practice, at least in my geography.  Think about it:  When you got your first mortgage, even on your own residence, and you got approved for financing, you didn't go out and search for a title company, you were told by the mortgage company as to which title company or attorney would be handling the closing.  

Is this disclosed up front on their website somewhere, or in the paperwork?  No, because it's not worthy of mention and is common practice.  

In fact, the more experience you get, the more of these "issues" you will run into.  This is why some people won't work with beginners, because educating them takes major effort.  I am guilty over the years of drawing a line in the sand also, and in retrospect, from the viewpoint of decades later, I was wasting time, emotional energy, and relationships. 

No one here is telling you to run from your bank, or even move your account.  Simply add another account and open up another relationship.  Don't sweat the small stuff.  This is small stuff.