Is it Legal for Buyer's Agent to ask for Income & Credit Score Even after Furnishing Pre-Approval! (disclosure, mortgage)
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Is it reasonable,ethical or even legal for a buyer's agent to ask for Income, Credit Score, Debt to Income ratio to be able to place an offer after you have provided them with a pre-qualification letter from one of the largest banks?
I wanted to place an offer but was asked to provide these. I specifically told them that the bank checked tax returns, paystubs, bank statements and ran a credit check before issuing the pre-qual. I was given an answer that pre-qual doesnt go into these details and hence they need them.
Is this normal?
Appreciate your in-sights!
Thanks.
They can ask for whatever they want and you can give them whatever you want.
I'm assuming the buyers are trying to ascertain if you are just making it by the edge of your pants for qualifying for the loan and don't want to sit in their house for 2 months waiting for you to work out financing only to have it fall through.
Is it reasonable,ethical or even legal for a buyer's agent to ask for Income, Credit Score, Debt to Income ratio to be able to place an offer after you have provided them with a pre-qualification letter from one of the largest banks?
I wanted to place an offer but was asked to provide these. I specifically told them that the bank checked tax returns, paystubs, bank statements and ran a credit check before issuing the pre-qual. I was given an answer that pre-qual doesnt go into these details and hence they need them.
Is this normal?
Appreciate your in-sights!
Thanks.
I don't think it is normal. I have never done that. Did you ask why this was asked for?
As a Realtor, I would never ask for specifics such as that. The only thing I ask a new client, one that has not yet been prequalified, is if they feel there may be any credit or employment issues that would affect their ability to obtain a loan. A simple "yes" or "no" can help me help them by recommending mortgage brokers who have had a good track record of working with borrowers with credit challenges.
The rest of it? None of my business. I will call the loan officer that provided the prequalification to a) verify that it's real (too easy to fake, these days), and b) ask them if there were any issues that might affect the successful completion of the mortgage. If I'm in a multiple offer situation, and I have to choose between two offers, each with a mortgage, doesn't it make sense that my seller would want to go with the one that has the strongest credit application?
If I were a buyer, I'd be damned if I'd be spreading my own personal credit information all over the place, especially if I already had a prequal.
The problem is the lender letters aren't worth the paper they are printed on. There are just too many loan officers issuing letters without investigation. If you read the letters closely, 100% have an out or loophole, including my own. LOL, I saw one last week subject to an updated credit report. Really?
Part of the problem is I legally cannot share any information concerning the buyer. This includes disclosing any issues that might affect the successful completion of a mortgage. Last night I was asked could the buyer put more down. By answering that question I could be putting the buyer in a position to pay more for the home. Even "all 6 scores are over 800" should not be disclosed. "The down payment is in the bank." Nope, shouldn't say it, but we do. The Privacy Act prohibits disclosure. And, a buyer cannot waive their basic rights....well they can, but I cannot act on it, I should be following the letter of the law. This is why builder contracts are at odds and they want their own company to do the loan. The owner of the company (builder) commands the employees to do their bidding. (There is a case to be made the mortgage company and the builder are one and the same......very blurred lines). The contract gives permission to share information. Well, guess what, I am not a party to the contract. Everyday, your loan officer walks a very fine line.
Most of my letters are accepted, or if out of the area, I provide references (within the same company if with has a national RE company). But the competition is fierce. I've started recommending full pre-approval with an underwriter's review. Once completed, I can then write a letter stating a written loan commitment has been issued to the buyer(s). BOOM - closed lopphole! The buyers can decide how much of the commitment letter to share. It's made a huge difference in competitive markets.
Were you pre-qualified, as you say, or pre-approved? Unless things have changed in the five years since I bought my last home, pre-qualification does NOT involve the checking of paystubs, returns, statements, credit, etc -- it's based on numbers that you provide to the lender, but that are not verified by the lender. A pre-approval, on the other hand, does include verification of the numbers and a credit check.
If you've only been pre-qualified, that might be why your agents wants that info.
A pre-qualification doesn't really mean anything. They base it off of the information YOU gave them, which is why your realtor wants more information. Sellers want to make sure you are a well-qualified buyer.
A mortgage pre-approval means something. A lender has pulled your credit, verified your income, etc... This means more because the lender has verified information instead of just taking you on your word. A mortgage pre-approval shows sellers you are qualified and ready to buy.
So, my suggestion, if you don't want to give your realtor the information, go get a pre-approval.
Were you pre-qualified, as you say, or pre-approved? Unless things have changed in the five years since I bought my last home, pre-qualification does NOT involve the checking of paystubs, returns, statements, credit, etc -- it's based on numbers that you provide to the lender, but that are not verified by the lender. A pre-approval, on the other hand, does include verification of the numbers and a credit check.
If you've only been pre-qualified, that might be why your agents wants that info.
We cross posted. But same information
I had started to reply when my phone rang. Finished, posted, and you beat me
Do you have the legal obligation to supply it, no.
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