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Watch what you say!

By
Real Estate Agent with United Country Westmark brokers LLC.

 

 

I just wanted to share something that happened to my client recently. She went to her lender. She was

prequalified and everything went well. We put in an offer and the house went under contract. Through out the

process my client felt very comfortable with her lender. They shared stories and my client told the lender

confidential personal information. Well the contract fell through. The lender then told the listing agent all of the

confidential personal information my client had told her. Well you can imagine what happened next right? BIG

EARNEST MONEY DISPUTE! It took a lot of arguing and heartache, but she finally got her money back. The

lesson learned was a hard one. I don't think you really ever expect this to happen. So what is your best

defense? I think advising your clients to watch what they say is the best route. Do not get me wrong lenders

need to know a lot of information, but you don't need to tell them things like "My husband cheated on me" If it

is not pertinent to the transaction they do not need to know. Things have a way of being twisted and you don't

 want to lose your earnest money because of gossip. In this case the lender was out of line. I recently read a

great blog by Jeff Belonger As a Consumer or Realtor should you complain? I say yes, if the situation calls for it.

 The only way to stop things like this from happening is to speak up. It doesn't happen all the time and I have

worked with some wonderful lenders who would never do anything like this. Just because there is one bad apple

doesn't make the whole tree bad. It is more a case of just being careful. Think about what you say before you

say it. It is always better to avoid the situation than to have to clean up after it happens.

Show All Comments Sort:
Don Carter
All Star Mortgage, LLC - Haverhill, MA

This is actually a major breach of existing privacy laws.  Unless your client authorized the lender to release the information to the seller's agent, he/she has violated the client's right to privacy.

This is exactly why I do not like to be involved in a transaction where the agent is working both ends of the deal.  There are times when I need to discuss confidential financial issues with the buyer's agent; if that person also represents the seller, than essentially I am thrust into that role myself.

Jun 11, 2007 07:50 AM
Wayne McMullan
Royal LePage ProAlliance Realty - Belleville, ON
Quinte Real Estate
Here in Canada if that happened the lender would have broken the Personal Information Protection and electronic Documents Act (PIPEDA). PIPEDA is a federal statute that focuses on privacy matters for business purposes.
Jun 11, 2007 07:53 AM
KRISTINE CROWE
COLDWELL BANKER RESIDENTIAL BROKERAGE - Dundalk, MD
I think lenders have to get written permission to whom they can disclose information to.
Jun 11, 2007 10:31 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Lisa....   my only problem with your advice is that the client might now clam up. When all in all, I need the client to tell me everything pertaining to their financing. Even if they think I didn't ask the question or if the client thinks that it won't pertain to the deal. Let a professional decide this.

I am just working on a 4 part series for first time homebuyers. First Time Homebuyer Tips -- Getting Qualified & Knowing your Credit -- Part 2 of 4  I tell clients in here, at the end, not to hold anything back.

 Again, I have a problem people telling clients not to divulge all. This was unfortunate and unethical to say the least. 

Overall....  again, it's a shame that this took place, it truly is. But they need to report the loan officer who did this. And not advise people to tell their lender information. you talk about stories and feeling comfortable, but we don't know what stories were told. Was it pertaining to information for their loan that they applied for?  It sounds like it.  This is just my .02.

And I do want to thank you for that mention. 

                                                                                                         jeff belonger

Jun 11, 2007 10:34 AM
Geoff Black
Comstock Mortgage - Sacramento, CA

At best this is a breach of client confidence and at worst it's against the law.  Either way the lender isn't looking to make any friends within the public or the Real Estate community.

 

Bad move.

 

 

Jun 11, 2007 11:31 AM
Lisa Stevenson
United Country Westmark brokers LLC. - Montrose, CO
I just wanted to thank you all for commenting! Jeff: The information my client told her lender was medical and did not pertain to the transaction in any way. It was very unfortunate, but I simply do not recommend this lender. I have never had this problem before or after this incident, but I still caution my clients as to how much information they give out. There are things that the lender does not need to know. Especially when it is personal and does not pertain to the transaction. At the same time I realize the lender does need to know quit a bit of finical information and even though there is one bad apple it doesn't make the whole tree bad. I do not have a problem with lenders in general, just this particular lender. I have to say I have worked with some very good lenders that I would recommend hands down, but I feel the public should be educated. I am not telling people to not trust their lender, I just think they should keep some things to them selves, not only from lenders, but from everyone involved in the transaction. If it is not revilent to the transaction it has no place in the transaction. 
Jun 12, 2007 03:29 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Lisa....  I agree with your general statement. But in regards to the medical part, it could have been part of the transaction. Meaning, if their credit was damaged and or had some lates and it was due to medical reasons... then this would come up in conversation and in an explanation letter.  Again, I am just looking at the overall picture in regards to what is said to lenders.

The main point here shouldn't be what was said, but that the loan officer should never be discussing anything or any of this with anyone except his/her processor and or underwriter. That's it, period.  And yes, the consumer should be aware of this. But in this case, I would report this loan officer. As I stated, I wrote about this once before.

                                                                                                              jeff belonger

Jun 12, 2007 03:34 AM
Lisa Stevenson
United Country Westmark brokers LLC. - Montrose, CO
Jeff.....I understand what you are saying. It is the same with Realtors. If a client has had a bad agent it makes the deal that much harder because they are very reserved. I agree about what the point should be [about the lender] and I guess I wasn't very clear on that. I think I might revise what I wrote. I don't want to discourage people into not giving enough information. That would be just as bad as giving to much. Thanks!
Jun 12, 2007 04:20 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Lisa... I agree with what you said here and with what you said in my other post. Overall, this is a great reminder in our business and life in general.

 

Jun 12, 2007 06:22 AM
Cynthia Tilghman, Realtor® Onslow County NC Home Specialist
Kingsbridge Realty, Inc - Hubert, NC
Sad to see these things happen but they do, seems there are people in all professions who do not know when to keep quiet.  I agree with Jeff, the loan officer needs to be reported and held responsible.  Thanks for a good post.
Jun 12, 2007 09:37 AM