LEO: Real Estate: Lender Approval of LE Op. 1120
Real Estate: Lender Approval of Borrower's Closing Attorney.
September 9, 1988
You have advised that you are involved in a real estate transaction in
which the bank, through the loan commitment, reserves the right to approve
the borrower's closing attorney as well as obtain legal counsel on its
behalf at the borrower's expense.
You feel that this provision in the commitment goes beyond the bank's
mere recommendation of a closing attorney, in that the bank may be
directing the attorney who shall be used since the borrower may be faced
with the additional expense of the bank's attorneys' fees.
The Committee believes that the bank, like an individual, has the right
to secure legal counsel of its choice to protect its interest as well as
the interest of its shareholders and customers. The question you have
presented concerning the legality of a lending institution's policy with
regard to complex real estate closings is not within the purview of the
Standing Committee on Legal Ethics. Thereby, the Committee will have to
respectfully decline to render an opinion.
Committee Opinion September 9, 1988
See also LE Op. 1151.