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Mortgage Grapevine

Any advice on Realtors requiring bidders be prequalified by their favorite Mortgage Company

I wouldn't do business with a taxi driver.


I wouldn't take a contingency if I were a realtor.


If you want something to change, change YOUR client base.
by turdly December 19, 2012 3:00 PM


those directives are from the seller, the agent representing the seller is passing that on to you

you will mostly find this on bank owned properties.

I've also heard of loan officers contacting the lender that is required to provide a pre approval and give them some basic info and that LO shot over a pre qual letter.

Lastly, my understanding of credit is that if you have a mortgage pull from one company that any other mortgage pull within 30 days from the first pull only count as one pull for computing your score.
by LOANMAN December 19, 2012 3:44 PM


they are not requiring the buyers to apply for a mortgage with their lender, only to pre-qualify. Credit does not need to be pulled nor income documented on a pre-qual letter.
by ol'canuckle head December 19, 2012 4:02 PM


There could be a few potential issues, but would need to know more to determine if rules were violated.

For example, does the real estate agent's preferred lender share personal information about the borrower with the agent? If so that is a breach of confidentiality and the borrower could sue. But they would have to prove it.

Why does the real estate agent prefer a particular lender? If they receive something of value from that lender in return for sending the lender business that would be a violation of federal law. Of course, there needs to be proof.

There could potentially be any number of other illegal schemes going on between the agent and their preferred lender, but I'm not devious enough to be able to come up with them at the moment.

But when you hear hoofbeats think horses, not zebras. It is possible there is nothing illegal going on and agent just trusts their preferred lender. Whether that trust is well placed is a different issue. If the borrower does not wish to discuss their financial information with the "preferred lender" they need to walk away.
by oldbe December 19, 2012 4:11 PM


Corret me if I am wrong, but isn't a seller's realtor obligated by law to show the seller all offers?

I really don't know.


by YATI December 19, 2012 4:19 PM


I don't see anything wrong with it. Honestly I would never want to be a prequal call center for any realtor. Because I know if the other lender educates their borrower properly they aren't going with me anyway. Who has the time?

We all know how competitive this industry is and I would use your situation as a learning experience. Why did they your borrower go with the other company even though the costs were higher? I think it's obvious.
by PDRMortgage December 19, 2012 4:24 PM


Good question, YATI. I don't know state law on real estate sales, but suspect that the listing agent can define in the listing agreement what offers the owner wants to see, such as only those those that appear to qualify using the preferred lender. Just a guess.

Hey, Marvin, what's the deal in Orygun?
by oldbe December 19, 2012 4:28 PM


My wife 32c and I are playing Realator now. We also require a prequal leter before
we show any homes to a buyer. We steer them to lenders/brokers that play ball with us and disclose the borrowers financial situation. Legal...Illegal I do'nt know..but if I were you I'd play the game.
And 32c gained a little weight..I think she should move up to a 34b.
by Power Pig December 19, 2012 4:49 PM


Yati,

Unless otherwise instructed by the seller, a seller's agent is required to present all offers to the seller. The seller can instruct them to only present certain offers provided they are not illegally discriminating in what they do not want presented. They can say not to present offers less than $x, that can't close within a certain time period or who are financing that they want cash only.

With regards to requiring a pre-approval from a particular lender this is very common with REO properties. The larger banks selling the REO are requiring that the buyer be pre-approved by them. Partly self serving in trying to get the loan but also they want their people to do a pre-approval so they know the buyer is legit.

For the realtor to require this it would have to be approved by the seller. The seller can make pretty much any stipulation (legally allowed) they want as a condition of accepting an offer.

My guess is that it is as much about the realtors growing tired of dealing with originators who do not perform as it is about trying to put money in the pocket of a particular loan originator. If they have a couple of originators that they know can close loans and who are upfront with them about potential issues that's who they want to use. Hopefully they are doing it for the right reasons which is to protect their seller and make sure someone they trust has done a pre-approval so they know that financing shouldn't be an issue. Not to say they may not be doing it for the wrong reason which is to simply push business one way so they can get their end.
by ConservativeMe December 19, 2012 5:05 PM


Let me rephrase;
I wouldn't let a realtor show my house to someone not pre-approved, make an offer and jack me around only to find out they are flakes.

Get your people pre approved before letting them look at houses, or your realtor is just a taxidriver.
by turdly December 19, 2012 6:04 PM


Let me rephrase;
I wouldn't let a realtor show my house to someone not pre-approved, make an offer and jack me around only to find out they are flakes.

Get your people pre approved before letting them look at houses, or your realtor is just a taxidriver.
by turdly December 19, 2012 6:04 PM


Personally, I think they should be stopping in to get pre-approved (or not) before they ever talk to the realtors...but I realize it's not as sexy to flip through the newspaper or interwebs and picture yourself in an FHA loan as it is to dream what it would be like to be in that house with the picket fence. Shopping before you know what you can afford is dangerous. I'm just sayin'...

--bats
by ragingbats December 19, 2012 6:15 PM


Have you given your borrowers a preapproval letter from your company, stating that they are preapproved for XXX amount? If not, you should do this.

Also, you should find out what agent they are working with, so you can contact that agent and let them know that you too, are working with the client.

Unless you make friends with the agents and develop a relationship basedd on trust, you will always lose out to people like myself who understand the purchase business
by McC December 19, 2012 8:05 PM


Not sure what that means. Are you suggesting that this mortgage broker stop helping buyers needing financing bid on homes, and continue to let their privacy be breached so i dont have to worry about this issue? I dont follow you....anyone else? Perhaps someone who can see the harm this does to decent people, and might have some suggestions to help stop it?
by BBQPitMaster December 19, 2012 3:17 PM

LOL what a great response.

Welcome to the party. Tardly definitely takes the long road to get his point across.

He boozes during the day, molests Collies and is a glass half empty kinda of guy.





by MTB December 19, 2012 8:09 PM


No, I'm a 'who the hell pissed in my good clean glass' kinda guy.


If he doesn't understand the vernacular he shouldn't be in the business.
by turdly December 19, 2012 8:27 PM


BBQPitmaster,

MTB is right, Turdly is a drunk and a lot lizard at your local truck stop.

He never makes any sense. We all just laugh and wish he would go back to his self imposed exile.

Pay him no mind. Nobody else does.



by closemorethanudo December 19, 2012 9:27 PM


Tardly I think realtors are over paid taxi drivers. I have made that comment on this blog several times under my old handle, which I devulged per your request a while back .

If your a realtor or a borrower that is not insisting on a full income and credit approval before you schlep some idiot around town or before you pay some ass clown 3-6% to schlep you around then you are a fool and will either waste your time or over pay.

Now git yur guns lets kill some shit



by MTB December 20, 2012 12:56 AM


MTB
you want him to get his gun...you just can't stop thinking about ramming it up him can you


Missing
Turdly's
Butt


by LOANMAN December 20, 2012 8:05 AM


I guess I missed your name outing, but thanks for doing it.


LM.

I consider that one a generalized statement and that MTB, like I often do, mighta missed the 'you all'.
by turdly December 20, 2012 10:30 AM


become their favorite mortgage person, perhaps?
by jimmymac079 December 20, 2012 5:26 PM


I'm a little late to the discussion, so I don't know if you will see this, but I've had a lot of my clients say the listing agent was requiring them to get pre-approved with their lender.

The way I handled it was to ask for the listing agent's contact info. Then I called the listing agent and had a conversation that went something like this:

I understand where you're coming from, but I want to let you know Mr. X is fully DU approved with me already, and my pre-approvals are good and solid. He has what we call a clean loan, meaning high score, low debt ratio, and no foreseeable issues. Then I go on about my own credentials and build rapport by asking about him as well.

I wrap up by telling him Mr. X doesn't want his credit pulled over and over again, because even if it doesn't generate a hit on his credit score, it doesn't look good on his report to have a lot of inquiries.

By the time we're done with our 10 min. conversation, I've made friends with the listing agent and they drop the requirement upon receipt of my pre-approval letter.

I also inform my client that coercion is illegal and that he has the right to choose any lender he wants, and that there is no reason he should be coerced or manipulated into switching to a lender he didn't choose.

Good luck.


by Loan Writer December 21, 2012 11:34 AM


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