Cash out refi conditions on portfolio loan

[Allan C.]

Has anyone else experienced banks placing conditions on fund draws approved for cash out refi on a portfolio loan?

Specifically, we have a bank requesting that we show executed purchase contract before being allowed to draw funds. This is a non-starter for us, but before negotiating harder or walking from this lender, I’d like to get a pulse from others.

[Kerry Baird]

Is this a line of credit? If so, that makes sense to me. 

I got a loan recently from a portfolio lender on a house that was hit by hail during the escrow period.  Was a good house when I made the offer, and was now a damaged house. 

I renegotiated with the seller, who got the insurance check for the hail damage, and agreed to turn the insurance settlement over to us so that we could complete renovations.  The lender held that check and would not release funds until the work had been completed.  I was of the opinion that it was "our" money to use up front, but it was their opinion that their position was secured by damaged house, and said house needed to be repaired.  Your situation sounds like it might rhyme with this.