Cash out Refinance - Lender Being a Pest

[Kathleen Hernandez]

I couldn't think of a better topic name but the title sums up our situation. Here it goes - 

I'm representing my uncle to purchase a property in the Los Angeles area. I'm not an active realtor but am licensed and trying to assist him with this one. 

He is based in Georgia. He wants to borrow $700K against his home, using a cash out refinance from the bank (It's a major/well-known bank. Not sure if I can mention who but if anybody is wondering, I'll say it).

His home is completely paid off, and the bank (In his hometown) had his home appraised at $1.7 million. 

His bank account has $1.1 million.

He earns around $30K/month (prior to taxes).

The bank loan officer even stated he is well qualified and his home is excellent (Obviously!)

All of a sudden though, they are asking for information about the property such as property taxes, rent roll, insurance from the current owner, etc.  That's fine with a conventional loan if he were to put in a down payment towards the property. I've seen/heard of instances where they kind of analyze the deal and base the loan amount on that. 

It seems they are not going to appraise the property that is being purchased - but I don't know why they care about its rent income, taxes, etc. 

Our concern is:

1. This is not the strongest cash flow deal. Probably around 4 - 4.5%. It's a low/slow steady return, but should go up a great deal in the future with appreciation. He doesn't care about the return though, and is sold on the location. I do agree, it should be priced higher. But if they are going to base their loan amount on what it generates, we would have never bothered with them in the first place.

We have about 25 days left to close and just passed the due diligence/inspection period, when they started asking for these documents. 

Is it worth having him take this up with somebody higher up than the loan officer at the bank? He has told me the loan officer wants him to purchase a property in the Atlanta area, near his home, and has been asking him every time he calls to come and see it. (He has no interest in it). Perhaps the loan officer is trying to get him to back down from this deal. 

Wondering if this is normal for a cash out refinance under such terms. 

Thank you!