Comments on: Investigating Preapproval Letters http://raincityguide.com/2007/01/10/investigating-preapproval-letters/ Seattle's Leading Resource for Real Estate Information Sun, 08 Nov 2009 01:47:42 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Are you really preapproved or are you just prequalifed for a mortgage? Part 2 | Rain City Guide | A Seattle Real Estate Blog... http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-194017 Are you really preapproved or are you just prequalifed for a mortgage? Part 2 | Rain City Guide | A Seattle Real Estate Blog... Sun, 14 Oct 2007 16:30:42 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-194017 [...] Preapproval letters are really only as good as the Loan Originator who is providing them.  If a LO has not done the elbow grease required to truly have a preapproved borrower, then the preapproval letter is only worth the paper it’s written on.   A strong preapproval letter can be the difference between having your offer accepted on your next home when competing with other buyers. [...] [...] Preapproval letters are really only as good as the Loan Originator who is providing them.  If a LO has not done the elbow grease required to truly have a preapproved borrower, then the preapproval letter is only worth the paper it’s written on.   A strong preapproval letter can be the difference between having your offer accepted on your next home when competing with other buyers. [...]

]]> By: Rhonda Porter http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-149881 Rhonda Porter Mon, 18 Jun 2007 02:30:51 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-149881 Ricky, if the real estate taxes came in significantly higher than the LO estimated, it could be a problem. I use 1.25% of the sales price for our area...but if someone buys in parts of Auburn or NE Tacoma, for example, it might be closer to 1.3% of the sales price. If your daughter was preapproved with her debt to income ratios to the limit, then taxes or home owners insurance could disqualify her. It's better to have the LO check this out now before she's too deep into the transaction. Ricky, if the real estate taxes came in significantly higher than the LO estimated, it could be a problem. I use 1.25% of the sales price for our area…but if someone buys in parts of Auburn or NE Tacoma, for example, it might be closer to 1.3% of the sales price. If your daughter was preapproved with her debt to income ratios to the limit, then taxes or home owners insurance could disqualify her.

It’s better to have the LO check this out now before she’s too deep into the transaction.

]]> By: Ricky Tingle http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-149877 Ricky Tingle Mon, 18 Jun 2007 02:16:09 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-149877 My daughter just got approved for home loan. At last minute, the night before she is to give earnest money on home with the preapproval letter agent says to her there could be problem because of taxes. Is this legal. He said he had to run it by the underwriter. A quick response would really be appreciated. My daughter just got approved for home loan. At last minute, the night before she is to give earnest money on home with the preapproval letter agent says to her there could be problem because of taxes. Is this legal. He said he had to run it by the underwriter. A quick response would really be appreciated.

]]> By: Are you leaving too much on the table? | Rain City Guide | A Seattle Real Estate Blog... http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-125789 Are you leaving too much on the table? | Rain City Guide | A Seattle Real Estate Blog... Wed, 18 Apr 2007 01:38:43 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-125789 [...] Should agents require a Good Faith Estimate with the Preapproval Letter when Sellers are paying closing costs or provide a line-item range of allowable costs for the seller to pay?    At least then, this issue is addressed before all parties reach the closing table.     Your thoughts?  [...] [...] Should agents require a Good Faith Estimate with the Preapproval Letter when Sellers are paying closing costs or provide a line-item range of allowable costs for the seller to pay?    At least then, this issue is addressed before all parties reach the closing table.     Your thoughts?  [...]

]]> By: Phoenix Arizona Real Estate Blog by Dalton’s Arizona Homes » Blog Archive » Protecting Sellers from Zero-Down Financing http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61980 Phoenix Arizona Real Estate Blog by Dalton’s Arizona Homes » Blog Archive » Protecting Sellers from Zero-Down Financing Fri, 12 Jan 2007 00:46:07 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61980 [...] Fair question: “didn’t you as the listing agent check with the lender?” Absolutely. In the most recent case, I sent the lender a local “Loan Status Update” form and the last update showed the file was in underwriting. It was there that things fell apart. [...] [...] Fair question: “didn’t you as the listing agent check with the lender?” Absolutely. In the most recent case, I sent the lender a local “Loan Status Update” form and the last update showed the file was in underwriting. It was there that things fell apart. [...]

]]> By: Rhonda Porter http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61884 Rhonda Porter Thu, 11 Jan 2007 20:42:05 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61884 Thanks for the chime, Jillayne! ;) I do not endorse, nor do I practice sharing a client’s private information with anyone. I do encourage selling agents to call the lender on preapproval letters. I think there is nothing wrong with “eyeballing” a lender before you enter into a purchase and sale agreement where they will be handling the financing. “Eyeballing” does not include, in my opinion, divulging any confidential information. Thanks for the chime, Jillayne! ;)

I do not endorse, nor do I practice sharing a client’s private information with anyone.

I do encourage selling agents to call the lender on preapproval letters. I think there is nothing wrong with “eyeballing” a lender before you enter into a purchase and sale agreement where they will be handling the financing. “Eyeballing” does not include, in my opinion, divulging any confidential information.

]]> By: Jillayne Schlicke http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61863 Jillayne Schlicke Thu, 11 Jan 2007 18:49:05 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61863 The lending compliance procedures within the Fair Credit Report Act directs lenders to not disburse credit information to those who are not a party to the mortgage loan transaction. Doing so turns a lender into a credit reporting agency. Links open PDFs Section 607 http://www.ftc.gov/os/statutes/031224fcra.pdf It is also in the Graham Leach Bliley Act. http://www.sechistorical.org/collection/papers/1940/1940_SEC_Invst_Advisors_Act/V.pdf Businesses can't release financial info of their clients to third parties. The lending compliance procedures within the Fair Credit Report Act directs lenders to not disburse credit information to those who are not a party to the mortgage loan transaction. Doing so turns a lender into a credit reporting agency.

Links open PDFs

Section 607
http://www.ftc.gov/os/statutes/031224fcra.pdf

It is also in the Graham Leach Bliley Act.
http://www.sechistorical.org/collection/papers/1940/1940_SEC_Invst_Advisors_Act/V.pdf

Businesses can’t release financial info of their clients to third parties.

]]> By: Craig http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61833 Craig Thu, 11 Jan 2007 17:38:39 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61833 I have only a limited understanding -- at best -- of state and federal financial information privacy laws. Moreover, I don't have the time needed for the legal research that would form the basis of an informed blog comment. So today, I'm shooting from the hip. POW! As a general rule, private information (such as financial information or healthcare information) should be kept confidential absent explicit authority to release it from the consumer. State and/or federal law prohibits a broker or lender from sharing financial information with a listing agent unless the buyer has specifically approved such disclosure (note disclaimer above). Moreover, it seems that anyone who considers themself a "professional" should respect the right of ALL consumers to keep private information private, regardless of the personal gain to be had by obtaining such information. I think its a little shady -- at best -- for an agent to seek out the buyer's financial information, particularly under the guise of "eyeballing" the lender. If you want to learn more about the lender, then ask questions about the lender. But don't use subterfuge to obtain information that you legally and ethically should not obtain. Moreover, the burden should not be placed on the consumer to have a "frank discusssion" with the lender/broker about sharing information. The consumer should be able to assume that private information will be kept private. If the buyer wants the lender to share that information, then the buyer should so instruct the lender. Absent that conversation, everyone should assume that the information will not be shared. If anyone does chime in about relevant state or federal law, a citation to authority would be appreciated. I have only a limited understanding — at best — of state and federal financial information privacy laws. Moreover, I don’t have the time needed for the legal research that would form the basis of an informed blog comment. So today, I’m shooting from the hip. POW!

As a general rule, private information (such as financial information or healthcare information) should be kept confidential absent explicit authority to release it from the consumer. State and/or federal law prohibits a broker or lender from sharing financial information with a listing agent unless the buyer has specifically approved such disclosure (note disclaimer above). Moreover, it seems that anyone who considers themself a “professional” should respect the right of ALL consumers to keep private information private, regardless of the personal gain to be had by obtaining such information. I think its a little shady — at best — for an agent to seek out the buyer’s financial information, particularly under the guise of “eyeballing” the lender. If you want to learn more about the lender, then ask questions about the lender. But don’t use subterfuge to obtain information that you legally and ethically should not obtain.

Moreover, the burden should not be placed on the consumer to have a “frank discusssion” with the lender/broker about sharing information. The consumer should be able to assume that private information will be kept private. If the buyer wants the lender to share that information, then the buyer should so instruct the lender. Absent that conversation, everyone should assume that the information will not be shared.

If anyone does chime in about relevant state or federal law, a citation to authority would be appreciated.

]]> By: Rhonda Porter http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61765 Rhonda Porter Thu, 11 Jan 2007 14:21:42 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61765 Hi Ardell, that will teach me to respond to a blog later in the evening! I meant to say, it is a good idea for the seller’s agent to call the buyer’s lender. I do not converse freely with the seller’s agent. Dual agency, I would still protect my client’s privacy. If I were asked information that I did not feel I could disclose to an agent, I inform the agent that I need the buyers consent. Brian, you got it....The point of calling the lender to review the preapproval letter is mainly to take the pulse of the lender you may be unfamiliar with. Hi Ardell, that will teach me to respond to a blog later in the evening! I meant to say, it is a good idea for the seller’s agent to call the buyer’s lender. I do not converse freely with the seller’s agent. Dual agency, I would still protect my client’s privacy. If I were asked information that I did not feel I could disclose to an agent, I inform the agent that I need the buyers consent.

Brian, you got it….The point of calling the lender to review the preapproval letter is mainly to take the pulse of the lender you may be unfamiliar with.

]]> By: Brian Brady http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61644 Brian Brady Thu, 11 Jan 2007 08:31:26 +0000 http://raincityguide.com/2007/01/10/investigating-preapproval-letters/#comment-61644 Great advice, Rhonda. Id the buyer has authorized a discussion with any and all parties, it makes sense to share pertinent financing facts. I think the real estate agent is just verbally "eyeballing" us to see if we have the ability to perform. Great advice, Rhonda. Id the buyer has authorized a discussion with any and all parties, it makes sense to share pertinent financing facts. I think the real estate agent is just verbally “eyeballing” us to see if we have the ability to perform.

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