We have a Mortgage loan that is a Refinance transaction where the investor (who will purchase the loan) currently holds the first trust deed and they are requiring an official preapproval letter from us before they can approve their subordination. We do pre-approvals for purchase transactions, but have not done one for a refinance. Is there any reason we could not issue a pre-approval letter for a Refinance?

What subordination? What is being subordinated if the current loan is being refinanced?

I'm sorry. I neglected to say that the investor holds the first & second. We are paying off the first and they will subordinate their second.

You can issue a letter to whoever you want to - just because you send the letter to the other lender, it does not necessarily have anything to do with the borrower.

thank you!