Tip #5. The Bank Sets the Rules
Making an offer on a bank owned property requires that you submit “proof of funds” for cash offers, or a “pre-approval” letter from your lender of choice. Additionally, the bank can require that you be pre-approved by them. That does not mean you have to borrow money from them, it just means that they want to be sure that you have the means with which to purchase the property.
In other words, if Wells Fargo holds the property, then they want a letter from a Wells Fargo lender, specified either in the listing or in the bank contract. This is done for two reasons – one, they trust their own lending guidelines and two; they want the opportunity to generate more business. While the seller(the bank) cannot legally insist that the buyer use a particular lender, they still want an opportunity to compete for the business.