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Short Sale Confidential!

Is it? OK........so here’s a good one for you. What are you doing to ensure your Short Sale Submission Package is kept confidential? More importantly, what are the Lenders doing to ensure this information is kept confidential?

Let me be a little more specific. How can we guarantee to our Sellers that their bank statements, tax returns, financial statements and social security numbers are not being stolen/sold/copied/shared by the hourly employee who receives the Short Sale Submission Package on the other end?

Have you thought about this before? Do you have a solution? I don’t.

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Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 04/30/2009 04:21 PM

Comments (25)

short sale, opinion

25 Comments on Short Sale Confidential!

APR

Hun...

We both know that I spend a lot of time on AR. That being the case, I've never seen this topic addressed :)

TLW...ROAR!

That is a great point. There is always someone that has access to information at our banks, credit card companies, etc., that is probably the point they would argue. Wonder if those people are bonded. Not that it makes a bit of difference I guess.

The only way something is ever confidential is if you never share it. I will wait to hear what others have to say.

A VERY good question, indeed. I am just now entering Short Sale U with my first two short sale listings, soaking up everything I can....

With identity theft as rampant as ever, this is a topic that needs addressed.

I'm not sure if I have the solution per se, but here's a few things that I'm thinking off the cuff:

Make sure you have the resources in place to be able to monitor your credit throughout the transaction and thereafter.
Make sure you get as much contact information as you can about any employees that you are sending your information too.

On the other side, these companies with these employees need to be extra careful when hiring and also be scrutinizing what goes on within their operation. I don't think there are any guarantees, though.

Bryant,

"What are you doing to ensure your Short Sale Submission Package is kept confidential?" This question makes allot of sense, and some may never have considered it. Perhaps having worked with peoples financials for so long it seems like a non-issue to me. You're dealing with a bank, they deal with financial statements all day every day.

In an age of identity theft there is plenty of law and case law concerning this issue. If you're dealing with a private money, "hard money" individual lender then this could be a real concern, but not with the banks.

I'd be much more worried about the O & A itself. The bank is the real seller, they are not contracted to you, you've provided current financials on the troubled home owner. They've decided to allow a short sale. They could pass on inside information. "Beat this offer and you've got a deal."

Not presonaly presenting offers and tolarating beuracrats leaves you open if not inviting abuse, but that's the selling agents prolbems.

Bill

Hi BB - I have asked this question of a couple of lenders, and they claim that there is no issue. They say that there is no difference between how they handle what you submit for a loan app in any transaction and what you submit for the short sale package - someone has to see it and that person is "required" to keep it confidential. I'm not sure that is a perfect answer, but at some point I suppose we have to cross our fingers and have faith that they will be honorable and law-abiding.

Bryant - This is scary. I worry on my end about shredding documents, but we really don't have control when it goes to the short sale lender.

Bryant,

I've analyzed the confidentiality of this type of information at length...My conclusion: There is absolutely NO way to guarantee that info will not be stolen/sold/copied/shared...!!! Thanks, Fran

BB - A confidentiality agreement signed by all parties involved - maybe? It is a great question. While short sales are so anonymous (no face to face contact) on the lender's side, owners are really at their mercy so to speak.

I remember when ssn# and credit card information of credit card holders have gotten into the wrong hands - what ever happened in this case?

Bryant- An employee at Countrywide was charged with identity theft. The very thing you fear here is what he was doing. Stealing customers socials, etc.

But what are the mortgage companies doing and the lenders doing to insure your privacy when you apply for a loan, and after you close? Same thing, nada.

We never give the acceptance letter to the buyers mortgage company or their agent. That is private for the seller. Agents tell me all the time that all the 'other' agents give them to them. I say, I don't follow what everyone else is doing.

... oh boy, and there I was thinking I had most of the Short Sale answers ....

Very interesting question, and a topic that could VERY EASILY come into the forefront as the short sales continue.

... when you come up with the answer BB - be sure to give me a ring ;o)

Cheers !

Sheldon

Bryant we can only control what is in our possession, and have no way of knowing what someone else does with it. I know that we do not throw anything away without shredding it first.

We screan all our employees and do background checks on them, but there is always a chance that someone will misuse information that they have access to.

BB,

I questioned the same thing when one lender lost my clients information 3 times yet no one seems know where his private information.

MAY

Hi BB... interesting topic. I am parking here for a while to watch...

Since we, as agents, seem to have little (if any) control over lender short sale processing, I am not sure that there is anything that we can do to affect what they do with the information that we provide them any more than we can affect what a mortgage lender does with the very personal information provided on a mortgage application.

Heck if you call our local DMV (Department of Motor Vehichles) you are talking to a prisoner at the local prison. How nice when they ask you for your drivers license and recently someones social security number.

Bryant, interesting topic. I have a buyer that wants to see the sellers short sale info and doesn't quite grasp that I can't do that.

I have thought about this but I'm not sure there really is a way to keep all of the information confidential. Where do all of the lost short sale packages go?? I guess there is a team that receives the faxes and scans them into a system, hopefully those people have had background checks!

Hi Bryant- the sad news is we cannot guarantee anything once documents leave our hands. How many times have you heard about medical records showing up in dumpsters? Happens too often.

MAY

BB- NOTHING. This has long bothered me, and I've often blacked out a few digits on account numbers, socials and such before sending it over. I also try to make my clients aware of this.... Good Topic...

Bryant,

I do not have much confidence in the banks ability to do much of anything right now. Their greed has helped to create this huge mess and now that the people they qualified with a no down payment, ARM loan with stated income can not make their payments, the banks are saying their is no substantiated hardship and denying short sales to their customers. How dumb is that? So no, I don't know how we can guarantee our clients privacy with a bank.

MAY

BB, We cannot guarantee that the banks,lenders,or anyone else will keep this information confidential. I think I see another addenda in the future addressing financial security....or lack there of. Interesting topic to stay tuned with.

MAY

Great pont, Bryant! I have been making many offers on short sales lately, most are sitting at the bank, others have closed. On one, the listing agent (who bills herself as a short sale specialist) send me my copy of the purchase agreement with the sellers loan numbers on it! Oy!

Whew! What a creep! I'd put gum in her hair.

Whoa. A very good question. I hadn't even thought of this. Wouldn't the bank be held responsible if one of their employees, or whomever they out-sourced that job to, be held responsible for any problems? I know. That doesn't answer the question, and it certainly doesn't cover the client. But I would hope that the "liable" party would take care, if for no other reason than to cover their own butts!

MAY

Bryant - As you are dealing with the lender that made the original loan(s) to the Seller there should be some level of trust. If, however, there was identity theft what are they stealing? They are getting someone at the other end of the spectrum from where they started - losing, not buying their home. Not much to be gained. I wouldn't worry about it until you actually have a problem, but it is interesting to ponder.

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