U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-22-2021, 10:08 PM
 
Location: Boca Raton, FL
5,819 posts, read 9,465,975 times
Reputation: 7820

Advertisements

OK, so I'm a mortgage broker and the past year has been crazy. Good and bad. I did not meet the goals I wanted to meet but neither did a lot of my lenders. Programs were cut the beginning of the pandemic and one of my deals got caught up in all that.

Long story - the home needed work so we were doing a renovation loan and basically, since a family member was sort of involved, no fee for me. Kind of on the house.

Same family member got a good friend of her to give the homeowner the money to buy the home. Everything is all documented but the renovation loan has not yet come through. Everytime I get close, I get another condition.

Sometimes, when you are close to a situation, you know more than you should. I did find out something a few weeks ago I did not know. Now, it may never come out but since I found this information out, I just am having a hard time finishing the deal.

It is something not horrible but I was not supposed to know. There is no one I can talk to about it.

Do I just finish the deal and everyone is made whole? The construction work gets done and the homeowner has a beautiful home?

Or, do I let the person who lent the money pay for the additional work and then refinance it with someone else?

I look like a failure to this faction of the family and will probably never be involved in any deal ever again. I feel I have wrecked my family's member relationship with this person who lent the money? (The person is a very kind person and did it for my family member and the homebuyer).

This is truly a fork in the road question. If you have ever been in such a work type situation, let me know how you resolved it and what happened as a result. Were you shunned? Were you looked up to? (That would be a hard one since I can't discuss this openly).
Rate this post positively Reply With Quote Quick reply to this message

 
Old 02-23-2021, 06:33 AM
 
Location: Not the end of the Earth, but I can see it from here
4,451 posts, read 4,701,207 times
Reputation: 4680
"Neither a lender nor a borrower be" when it comes to family. These situations rarely end well.

You must do what is ethical and right. Unless you want to find another career, that is. While this may be unpleasant for you and/or your family member(s), you have to follow the ethical principles of your profession.

You imply that there were inconsistencies in the information provided to you after the fact. If someone misled or misinformed you purposefully, that is their fault and not yours. It also comes back (again) to doing what is right. if you are aware of issues that would affect the loan or lender, you are ethically obligated to disclose those issues. You're not only compromising your integrity, you're potentially risking exposure to legal action.

This doesn't seem that "gray" of an area or decision to me. Someone put you in a compromising situation professionally, you're bound by ethical principles to disclose. Period. Let the chips fall where they may, the risk is yours. What's more important?

RM
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 08:46 AM
Status: "You're entitled to your own opinion, but not your own facts." (set 12 days ago)
 
Location: Raleigh NC
21,228 posts, read 11,150,325 times
Reputation: 12651
without studying your posting history, it would be impossible to "identify" you, so I don't know why you don't provide more complete info.

You make it sound - per above response - that you found out something "illegal" that would cause your underwriters to deny the loan. If that is the case, then you deny the loan.

If it's just something untoward or unsavory, then it's not your role to intervene.

Example:

You discover borrower's source of income is drug dealing. That's illegal, you report.

You discover borrower husband has a secret bank account with $50,000 in it his borrower wife doesn't know about. Not your business to intercede.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 09:31 AM
 
Location: Boca Raton, FL
5,819 posts, read 9,465,975 times
Reputation: 7820
Default See below

It had to do with the renovation work - not the borrower themselves.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 10:24 AM
Status: "You're entitled to your own opinion, but not your own facts." (set 12 days ago)
 
Location: Raleigh NC
21,228 posts, read 11,150,325 times
Reputation: 12651
that doesn't really clarify at all.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 12:12 PM
 
Location: Boca Raton, FL
5,819 posts, read 9,465,975 times
Reputation: 7820
Default More

The renovation work is overseen by a HUD consultant. We have the reports as to what is being done - kitchen, windows, doors, flooring - cost around 35K.

There is a general contractor who is supposed to be doing the work. I found out someone else is doing it but I am not supposed to know and no one knows I know this.

The work has not started yet but I have heard this is how it will be done. The person I heard it from had no idea of my involvement.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 12:55 PM
 
8,892 posts, read 11,247,901 times
Reputation: 17234
Quote:
Originally Posted by Bette View Post
The renovation work is overseen by a HUD consultant. We have the reports as to what is being done - kitchen, windows, doors, flooring - cost around 35K.

There is a general contractor who is supposed to be doing the work. I found out someone else is doing it but I am not supposed to know and no one knows I know this.

The work has not started yet but I have heard this is how it will be done. The person I heard it from had no idea of my involvement.
If you found out the person doing the work not being a licensed GC on a different loan you are processing (that does not have a familiar attachment to you), what would you do?

Proceed in the same manner....
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 01:07 PM
 
Location: Salem, OR
14,745 posts, read 35,704,436 times
Reputation: 14663
Quote:
Originally Posted by Bette View Post
The renovation work is overseen by a HUD consultant. We have the reports as to what is being done - kitchen, windows, doors, flooring - cost around 35K.

There is a general contractor who is supposed to be doing the work. I found out someone else is doing it but I am not supposed to know and no one knows I know this.

The work has not started yet but I have heard this is how it will be done. The person I heard it from had no idea of my involvement.
OK so a general contractor wrote up the proposal on their letterhead, but someone else like a friend of the family or the homeowner will actually do the work which is why they can get as much as they can for such a small dollar amount. Is that the situation?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 04:33 PM
 
Location: Boca Raton, FL
5,819 posts, read 9,465,975 times
Reputation: 7820
Default Will take place after it closes

Yes, that is the case.

The HUD consultant met with the GC and the proposal was written up. I do not know any of this group but the GC may not be there doing the work or overseeing the work.

Funds are disbursed to the HUD consultant and then he meets with the GC.

Usually, I'm not involved after it closes so I would never know.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 02-23-2021, 04:50 PM
Status: "You're entitled to your own opinion, but not your own facts." (set 12 days ago)
 
Location: Raleigh NC
21,228 posts, read 11,150,325 times
Reputation: 12651
Quote:
Originally Posted by spencgr View Post
If you found out the person doing the work not being a licensed GC on a different loan you are processing (that does not have a familiar attachment to you), what would you do?

Proceed in the same manner....
this is a good answer.

at the same time, from my experience, the GC is putting his license on the line for the work. I don't know what his agreement is with HUD, if he has explicitly stated all work will be performed BY him, or constantly supervised by him, or merely (and what I would expect it to say) supervised by him. My expectation would be he is going to "inspect" the work before asking for a draw from the HUD consultant.

I don't know where this house is that you can get all new windows and doors, new flooring and a "new kitchen" for $35K. It doesn't *sound like* it's large enough to normally require a GC level - ie, no electrical is being moved, no plumbing redone (beyond fixtures), no cabinets ripped out and replaced.

But yes, my experience is the government requires a sledgehammer to kill a fly, so they require "GC" on every project. It certainly keep situations where a ragtag family of misfits tries to do the work themselves and botch it.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top