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.