What is a loan officer's legal right in disseminating information to a realtor?

[Koa808]

When I contacted a mortgage broker to prequalify me for a potential home purchase because the realtor needed verification of my ability to purchase a home, the following issues raised my eyebrows: I completed a loan application on a Friday and submitted all requested documentation to the mortgage broker who indicated a preapproval letter would be sent to the realtor upon completion of the preapproval process and get back with me with the results as well. On the following Tuesday, I sent an email to the mortgage broker inquiring as to the results and the response was, "Didn't you get my email? I sent 3 letters to the realtor". So I replied that I would appreciate receiving the 3 letters also. The next day, still no letters so I called the office and spoke with the loan assistant who then forwarded me the email that was sent to the realtor. Within the preapproval was the fact that I had been approved for an FHA loan with maximum purchase price of $225,000 as well as my credit scores from the 3 reporting agencies. I was shocked with the credit scores as I had also pulled my own credit reports online the week before to make sure there were no issues I didn't know about before submitting a loan application. I was further shocked to learn the mortgage broker had also included within the 3 letters he spoke of, a copy of the DU Underwriting Findings and a letter indicating that the preapproval was subject to the close of escrow on my current home and the start of my new job. I am relocating to a new state for a new job. When I called the mortgage broker to inquire as to why all of this information was disseminated to a realtor I had not even met when all I asked them to do was provide a preapproval letter so I could begin shopping, he answered, "This is standard operating procedure". So I called the realtor and asked if they always received preapprovals with the credit scores boldly emblazened within the body of the letter, she answered that this was the first time she had ever seen credit scores on a preapproval letter. I am feeling very violated and I just want to know if this practice is ethical?, is legal?, and is this practice normal these days?

 

[OHRoadwarrior]

Read the release of information section of the contract you signed.

 

[Koa808]

Here is the release of information I signed

Authorization to Release Information:
I/we have applied for a mortgage loan from Mortgage Co.. As part of the application
process, Mortgage Co. may verify information contained in my/our loan application and in other
documents required in connection with the loan. Furthermore, I/we authorize Mortgage Co to obtain a credit
report(s).
Does this release I signed contain any language that the Mortgage Co. has the right to disseminate information to a realtor?

 

[OHRoadwarrior]

If they feel it is in their best verification interests, yes. If you disagree, I suggest you bring it to the loan officers attention and express your displeasure by taking your business elsewhere.

 

[Koa808]

So this is not an illegal invasion of privacy?

Well that goes without saying. Of course I feel violated and a lack of trust has been established by their actions. I certainly will not continue a relationship with this company. But I want to know if this a legal right afforded mortgage brokers to disseminate my financial profile to third parties without my consent or direction?

 

[OHRoadwarrior]

Well that goes without saying. Of course I feel violated and a lack of trust has been established by their actions. I certainly will not continue a relationship with this company. But I want to know if this a legal right afforded mortgage brokers to disseminate my financial profile to third parties without my consent or direction?

It appears you gave your consent. If you wish to limit a blanket consent in the future, discuss it with the lender, the cross it out or amend it. I have done this on mortgage contracts before.

 

[justalayman]

But I want to know if this a legal right afforded mortgage brokers to disseminate my financial profile to third parties without my consent or direction?

apparently you were not very clear in what you wanted sent to the Realtor and failed to ask what your lender puts in a pre-approval letter they would send to a Realtor. You did ask them to send the letter, correct? Did you put any limit on what you wanted sent to the Realtor?




when this is what you asked for:

When I contacted a mortgage broker to prequalify me for a potential home purchase because the realtor needed verification of my ability to purchase a home,

The Realtor was told:

Within the preapproval was the fact that I had been approved for an FHA loan with maximum purchase price of $225,000 as well as my credit scores from the 3 reporting agencies. I was further shocked to learn the mortgage broker had also included within the 3 letters he spoke of, a copy of the DU Underwriting Findings and a letter indicating that the preapproval was subject to the close of escrow on my current home and the start of my new job.

every one of those items do go to verifying your ability to purchase a home.