Loan Proceeds

For bank-financed purchases, can you make the bank pay only one owner, as stated in the title?

To protect themselves, banks usually issue manager's checks to all the people stated on the title. They will not issue payments to anyone else.

But is it possible to have the bank issue the payment to just one co-owner? For example, if the property is co-owned by Mr. Reyes and Mr. Patag, can the MC be issued to just Mr. Reyes?

The quick answer is NO.

By doing this, the bank risks that Mr. Patag sue the bank because he was unrightfully deprived of the sale proceeds. Going the extra mile for the client doesn't count for any key performance metrics of the bank's representatives, so why should they even entertain? For this reason, banks follow a simple protocol to deny any request to do this (unless the mortgagor is a prized client of the bank).

Legally, it could be done through a special power of attorney authorizing one co-owner (Mr. Reyes) to receive the full amount of sale proceeds. Recently, I have witnessed a major bank allow this. Of course, the bank provided the template for the SPA to ensure it's bulletproof.

Lesson: Never say never. Say (instead), it's mahirap.

I hope all banks are as accommodating. It would also help if banks allowed part of the proceeds to be issued to a third party (i.e., the buyer). This is one way to grow your loan book easily.