There is a local mortgage broker whom will remain nameless that gets customers to write a postdated check for fees not yet incurred when a pre-qualification for a mortgage loan is issued. I have been in the mortgage business for several years and only recently closed our HUD approved office. This Mortgage Broker asks for the check to "tie the customer" to him.....has anyone else heard of this happening? I am not certain of the laws regarding this but even if the check was not post dated, is this proper? The check is supposedly for fees to be incurred and for the credit report but I have a problem with this practice. The check is kept in the desk drawer to insure the completion of the deal. I can see once the customer picks out a house or writes a purchase contract a deposit being taken to pay for the pending appraisal but not that far in advance. Does anyone have any feelings regarding this practice?
Prudential California Realty - Rohnert Park, CA
Rohnert Park,CA Real Estate
Neve heard of this before, I don't think is ethical to do this, but with some clients this may be the best approach. I would love to know what the laws are regarding this.
Jun 14, 2007 03:39 PM
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life
This guy or gal, whatever, is a sham & scam. Not only does it sound unethical, it is freaking ridiculous! We make money only when we close loans. That is that, this guy or gal is a heartbeat away from being on my own 'Crap-List'. Close loans, you make money. It is simple. Upfront fees that aren't 3rd Party Fees are unnecessary and often times illegal.
Jun 14, 2007 03:51 PM
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate
I don't know about mortgage brokers, but it's definitely illegal in real estate agents. At the very least, I would think it's unethical for mortgage brokers.
Jun 14, 2007 03:53 PM
Provadus Home Loans - Marietta, GA
Technology bringing you home.
Not good at all. It is people like that who give us a bad name. Take action and report them.
Jun 14, 2007 04:12 PM
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience
I collect appraisal in advance. But never with post dated check. Nor would I accept it. If they don't have the money, then they should go rent
I have competitors here who take appraisal fee and application fee up front with a credit card.....
Jun 14, 2007 07:54 PM
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