Published on January 2, 2009 | by LawNews
Prof. Daniel Greenwood Quoted on Cyberhomes.com
Professor Daniel JH Greenwood was quoted in an article on Cyberhomes.com.
How a bank merger affects borrowers: Three most common questions asked by buyers about financial institutions
By Amy E. Buttell
December 24, 2008
Q: My bank was bought by another bank. Initially they approved my mortgage application, then rejected it the next week. Can they do that?
Yes, financial institutions usually give themselves some wiggle room to back out of a loan for a number of reasons. “Some borrowers can expect to have their pre-confirmation letters withdrawn and they may have to look elsewhere for a loan,” says Daniel Greenwood, professor of corporate finance at Hofstra Law School. “Mergers are always complicated, and when they happen in an emergency situation with a potentially insolvent institution, everyone working for that business is wondering if they will have a job and is not focused on giving out loans.” If you are in this situation, you need to shop for a new loan.