Real Estate Agent Ethics Issue?

[danlikey2]

I was in the middle of a contract to purchase a house when we learned that my wife would more than likely be laid off (she is in the mortgage industry as well). My realtor spoke to my lender (who he reccommended) about my financial situation without my permission, in that he inquired as to whether I would be able to purchase the house based on my salary alone. Is there an ethical violation on either side here? I feel very uncomfortable with them speaking about my finances behind my back, regardless of how general the questions are. He (in my opinion) has been doing a terrible job, he has basically antagonized the now furious sellers, and now this. I just don't know what to do.

[IggysListing]

Did your realtor offer several choices for lenders?
Years ago I was taught if the client asks, offer several choices
and let the client choose.
Is the realtor representing you as a buyer's agent?

[danlikey2]

no, he only suggested the one lender, and yes he is the buyer's (me) agent.

[IggysListing]

Since you are unhappy and have concerns, if this is more than a
one person agency, call the office and speak to the broker in charge.
Your contract is with the agency and they have a responsibility to act
on your behalf.

[BrooklynBroker]

I was in the middle of a contract to purchase a house when we learned that my wife would more than likely be laid off (she is in the mortgage industry as well). My realtor spoke to my lender (who he reccommended) about my financial situation without my permission, in that he inquired as to whether I would be able to purchase the house based on my salary alone. Is there an ethical violation on either side here? I feel very uncomfortable with them speaking about my finances behind my back, regardless of how general the questions are. He (in my opinion) has been doing a terrible job, he has basically antagonized the now furious sellers, and now this. I just don't know what to do.

I don't see any ethical issue in the fact that your realtor called your loan officer and asked if you were qualified to buy or not. It does not really matter if he did it before you sign a contract or any time after.

The loan officer is not supposed to give away any personal details to the RE agent, but he sure has a right and duty to tell parties involved in transaction whether you qualify for that mortgage or not.

All I can recommend is you should speak to the lender (loan officer, his boss, etc.) and find out if you still qualify or not. That's what is important.

Apparently, you are not happy with your agent's overall performance, but that's different story.

[TJ2007]

Sorry BrookynBroker I TOTALLY DISAGREE with your comments!

1) Both the loan officer and real estate agent have a fiduciary responsibility not to disclose personal information about the buyer. In fact this could probably land them both in some seriously sticky stuff! Especially if the buyer were to lose a deposit!

2) If the buyer permits the loan officer to provide a pre approval or loan commitment to 3rd parties that is one thing. However it is likely illegal in most places for them to dosclose anything else. I mean until recently it was illegal to even tell the buyer their own credit score!

3) Always be wary of using a realtor or builder's recomendation for financing, 9 times out of 10 they are only recomending them in return for a kickback and doesnt mean they are competitve or even half good. Always get an outside opinion.

4) Ont he other side of the coin the buyer has a legal obligation to disclose any material changes to the lender (dont want to be involved in any mortgage fraud). And the lender likely would found out if she has been let go before the closing as most call to verify employment at the last minute, often even on the day of closing.

[BrooklynBroker]

1) Both the loan officer and real estate agent have a fiduciary responsibility not to disclose personal information about the buyer. In fact this could probably land them both in some seriously sticky stuff!
There was no information in the OP whether loan officer disclosed any personal info on the buyer or not. Anyway, we are not discussing the loan officer's behavior. Real estate agent called and asked whether the buyer was qulified or not. And he has every right to check on that just because he has fiduciary responsibility before the seller NOT to let him get stuck in a contract with unqualified buyer.

RE agent does not have any fiduciary responsibility not to disclose personal information. Just because he/she doesn't know any. Why would he?

Especially if the buyer were to lose a deposit!

Come on, why would buyer lose a deposit? Every contract has mortgage contigency in it.

2) If the buyer permits the loan officer to provide a pre approval or loan commitment to 3rd parties that is one thing. However it is likely illegal in most places for them to dosclose anything else. I mean until recently it was illegal to even tell the buyer their own credit score!

Loan officer is hired for that purpose: to determine whether a buyer is mortgageable or not. There are no 3rd parties here. Of course he must disclose to both parties involved if the buyer is not qualified. Nothing illegal in that. Illegal to tell the buyer their own credit score? When was that? Rule of thumb: one can get credit report/home inspection report/appraisal/etc. IF HE PAYS FOR IT. The only situation where one may not be entitled to know his credit score is where he refused to pay for that report.

[IggysListing]

Every contract does not have a contingency clause activated
and if it does, it depends on how it is structured as to the ease of
using it as an out.

[Hannigan]

There was no information in the OP whether loan officer disclosed any personal info on the buyer or not. Anyway, we are not discussing the loan officer's behavior. Real estate agent called and asked whether the buyer was qulified or not. And he has every right to check on that just because he has fiduciary responsibility before the seller NOT to let him get stuck in a contract with unqualified buyer. It's not exactly clear from danlikey2's description who told who what. I'm going to guess that dan (or his wife) told their agent about his wife's likely change in employment status, and the agent (without the expressed permission of the buyer) disclosed this to the buyers' lender.

A "more than likely" future employment status change isn't something the agent should be disclosing to the buyers' lender without expressed permission of the buyer, IMO. At that point, the agent's job is to advise a strategy to keep options alive as long as possible without risking the buyers' earnest money deposit.

[BrooklynBroker]

Three brokers already expressed opinion that contract may not have mortgage contigency clause. I'm just curious: in your experience, why would a buyer ever sign a contract with no mortgage contigency? Where I work, every contract has mortgage contingency (unless it's all cash purchase). No broker in Brooklyn will ever let their buyer sign a contract without simple mortgage contingency ("cannot get a mortgage - get earnest money deposit back"). Will you?

[Hannigan]

Three brokers already expressed opinion that contract may not have mortgage contigency clause. I'm just curious: in your experience, why would a buyer ever sign a contract with no mortgage contigency? Where I work, every contract has mortgage contingency (unless it's all cash purchase). No broker in Brooklyn will ever let their buyer sign a contract without simple mortgage contingency ("cannot get a mortgage - get earnest money deposit back"). Will you? In California, the defalut language of the most popular residential purchase contract removes the loan contingency 17 days into the contract. There is a checkbox to keep it in effect until funded, but most agents don't (or didn't used to) check it.