Mortgage "Professional" attracts business through deception...

Real Estate Agent with Hacienda Home Sales

Here we go again. It's so unfortunate that this practice of misinforming prospective clients to gain their business is so widespread and not regulated. In my case it is a flat out lie, but the client wants to believe, so they follow the person who tells them what they want to hear.

 This major banking institution, which I will not name, has assured my client that they will remove a co-borrower (and their entire financial obligation) from the first loan, and allow them to do a second to buy out the partner. We all know that the only way to remove a co-borrower from a loan is to refinance, this is the only way to remove them completely from the obligation and consequences in connection with a late payment or a default.

If you are buying your partner out, you want to be completely off that loan. There is no guarantee that your partner, whom you are no longer in touch with, is going to make  timely payments for the next 24 some odd years left on the loan. Who would want to expose their credit to that chance? NOBODY!

 Bank employees originating loans are not required to hold a real estate license. Maybe they should be, then they would have to study and pass the ethics portion of the real estate exam. That way they would at least get a glimpse of ethical behavior...

Comments (4)

Louis Cheek
Louis Cheek Jr - Lafayette, LA
Jun 23, 2007 03:04 AM
Dan Dowling
Dan Dowling - United Mortgage Capital Corp. - Altamonte Springs, FL


There actually is a way they can be removed without a refinance. It's called a "Qualifying Name Delete Assumption". Best bet is to get the bank employee to put it in writing BEFORE they do anything. I agree with you, the banking system has its share of weasels.

Hope this helps,

Dan Dowling

Altamonte Springs, FL (Suburb of Orlando)

Jun 23, 2007 03:05 AM
Steven Shewell
Primary Residential Mortgage, Inc. - Ephrata, PA
The Mortgage Maverick

Unfortunately, Patricia, even real estate agents who HAVE taken the ethics course conduct their business in the same manner.  That's what separates the professional agents from the circling buzzards.

As the professional's business grows, the buzzard's business struggles and they are left to deceive to get what scraps of business they can manage.  I would love to see tougher penalties for this type of deception, but for some reason the legislators seem to shy away from it every time it comes up.

Jun 23, 2007 03:07 AM
David A. Podgursky PA
THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL
THE PODGURSKY GROUP - Make the Right Move!

Most bank employees are not allowed to hold real estate licenses... it is a conflict of interest.  Bank employees usually at most get licensed for insurance, securities and commodity trading.

in Florida, bank employees who originate loans can only hang their licenses at the bank and soon find out it is a waste of money and time keeping up with the license that is not needed.  In fact, there are people that believe it is a violation of the license itself to be a licensed Mortgage Broker in florida AND get a W-2.  I think that's extreme but...

you are also wrong... there are loans that will allow you to remove a coborrower (not cosigner) from a mortgage.  The problem is that they cannot be removed from the NOTE.  This is the problem with ASSUMING a mortgage. 

It is not about the partner paying their share... when you sign a note you are both liable for the FULL payment.  So long as it gets paid in FULL, the bank will have no problem.  It is actually the partner that is leaving that needs to be careful.  The other partner could buy him/her out and never actually remove the name, go into default and then they're both in trouble.

If the partner that splits' name stays on the note and there is no will in place, there could be a title issue in the event of a passing of the first partner - there is actual notice of ownership.

The first step is to go straight to an attorney.

The second step is to forget whatever misgivings this person has about refinancing.  The partner needs to be off the deed, mortgage AND note.  Then there will be no question who possesses the property.

Third... getting the partner off all three re-separates the credit of the partners... if the name deletion removed from the mortgage, it may still be on the note, obligating the other partner in the case of default. 

Therefore... just refinance the sucker!  It isn't about making more money or paying closing costs again.  It is a cost of clean separation.

ALSO... quit quoting Realtor Ethics... there are stinkers in all fields of Real Estate... there are PLENTY of unethical Realtors. 

Jun 23, 2007 03:49 AM