Question On Mortgage Pre Approvals

By
Real Estate Agent with Donovan & Associates Realty

I have had a question for some time regarding how some REO homes are marketed in the MLS.  On a regular basis I see bank owned homes listed in our MLS with the requirement that the buyer get pre approved through the same bank that is offering the house for sale.

This raises an interesting question regarding the confidentiality of the information that the bank is aquirining on the potential mortgage customer.  Does the bank have to keep this information confidential or can they share it with the very folks at the same bank who are negotiating the terms of the offer?  This has the potential to put buyer clients in a much weaker negotiating position if the very bank that is negotiating the offer knows how much your client is qualified for.

Am I off base in being concerned about this?  I would especially like to hear from the mortgage folks.   

Comments (2)

Bob Jakowinicz
National Realty Centers Livonia--Bob Jakowinicz - Livonia, MI
Michigan Real Estate Agent-- MI Real Adventures

Robert, excellent question.  I will follow this post and see what answers you get.

Nov 10, 2009 11:21 AM
Erin Newington
(916) 585-3858 - Elk Grove, CA
Elk Grove Realtor

I do see your point but I don't think the 2 departments (loss mitigation and retail origination) talk to each other. 

There is a broker in our area that is the preferred provider for a couple big listing agents.  They will use our credit report, approval, and client documentation... BUT when they provide the pre-approval letter they list out the clients assets, income, and credit score. I personally think that is a no-no. They don't have the right to give out that information...especially because they never got permission from the client to do so.

I think the banks use there retail departments to try and generate new loans more so than "getting a peak under the hood".

Nov 10, 2009 01:00 PM