Home Buying in 91335>Question Details

Stephanie, Home Buyer in Reseda, CA

Need advise about what to do with our realtor/mortgage broker?

Asked by Stephanie, Reseda, CA Fri Jan 23, 2009

My husband and I went with a realtor who is also a mortgage broker. Because of many reasons we decided we did not want to continue with his services. He told us that we owe him $800 for processing our pre-approval. He said we signed a paper saying if we did not go with him we would have to pay him an $800 processing fee. We never got any copies of the papers we signed weeks ago. We have no idea if we signed something like that. Does he have any legal right to collect $800 for a pre-approval?He also claims that we would have a hard time obtaining a pre-approval from anyone else because my husband doesn't have a strong two year work history because he was in school getting his degree. He said that he does a lot of business with the bank where he got us pre-approved. He said that as a favor he asked them to overlook my husband's two year work history and they did. Is any of this true? Please advise on what to do? I called a few banks. None of them indicated that we would have a problem.

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This is highly unethical! I suggest that you contact the NAR (National Association of Realtors)
This agent should not be acting in both capacities. Did he even give you a choice of using another mortgage broker? In every case I know there is never a fee for a pre-approval letter. Also if he doesn't feel you can get pre-qualified with any other lender, then this is a high risk loan! Run as fast as you can, and report him to the NAR!
1 vote Thank Flag Link Fri Jan 23, 2009
It sounds like a mortgage broker that is looking for money, but he is doing it in a little bit shady way.
For pre approval you don't need to pay anything, but you do need to pay processing fee at closing of the loan.
This mortgage broker have found two innocent borrowers and he takes adventage of them to make quick buck, don't fall in that trap.
You can good deals out there from banks and the government, he is not the only broker out there that can help you, you can find thousands of agents out there.

Let me give you the source that all real estate agents use to look at properties that are on the market.
Click the link below, its 100% free for you to use.

Good Luck.
0 votes Thank Flag Link Mon Jul 20, 2009
Hi Stephanie, I hate hearing stories like the one you have shared above.

First off, he needs to produce a copy of any document alleging your signature to reimburse. Make the request in a documented email giving a timeframe for response.

I have to respectfully disagree with Kim. There is nothing unethical about performing both financing and real estate sales. Also, the violation enforcement entity is the California DRE, not NAR. I would seriously suggest you file a complaint with the Department of Real Estate if you feel the agent acted inappropriately or violated a fiduciary duty: http://www.dre.ca.gov/cons_complaint.html

Unfortunately, you don’t have to be a Realtor to practice real estate you just need a license. The difference between licensees and Realtors is that Realtors adhere to a strict code of ethics. Make sure you are working with a licensed REALTOR who is bound by the following Code of Ethics (summarized): http://docs.Steven-Anthony.com/RealtorCOE.pdf

While you have had a bad experience please understand that the majority of agents (especially now) are sincere and committed professionals. There are many real estate "service models" along the mix of focus between company transaction efficiency and personal service level. It sounds like you may have been stuck in a "transaction-focused" mentality rather than a "service-focused" model.

The next time you are ready to buy/sell interview more than one Realtor to see if there's a personal fit. Then, review the Realtor's client testimonials and pick some to speak directly with (don't be steered by the agent, choose from their list on their website). Ask these past clients what they liked about working with the individual, but more importantly; ask what they didn't like about the experience, or what went wrong, if anything. That is how you will get the best information. Also, use this site to look up the person's license to see if they have any violations:
http://www2.dre.ca.gov/PublicASP/pplinfo.asp

Finally, arm yourself with knowledge on how to pick a Mortgage Broker:
http://docs.Steven-Anthony.com/RateShopping-DoItRight.pdf
http://docs.Steven-Anthony.com/SAR-HowMortgageRatesAreDeterm…

Don't be discouraged, the good ones are out there, you just need to know how to find them. And, once you do find that person be loyal the same way you would be with a great doctor, dentist, insurance agent, etc.

Best Regards, Steve
0 votes Thank Flag Link Fri Jan 23, 2009
You know, I have REAL issue with jerks like this, espeically on my home turf. It slanders every good Realtor, on this site and elsewhere. It also makes brokers such as myself look like fools.

Get a copy of the decree in writing. Have an attorney review it. Worse case scenario, you would have a good case for anti-competitive pratices and collusion if you deided to pursue that route.

On to other matters.

As far as buying in LA/Reseda, I can refer you to an EXCELLENT Realtor and Mortgage Broker.

The Realtor is Bob Simpson of Keller Willims. He can be reached at 323-382-8282.

I would be the mortgage broker :)

I am a mortgage broker. If I can be of service, please let me know!

Martin Smith

Precision Funding
877-238-6324 Ext 704
513-536-7184
877-238-6324 FAX
MSmith@PrecisionFundingUSA.com
http://www.PrecisionFundingUSA.com
0 votes Thank Flag Link Fri Jan 23, 2009
From what you described, this agent/mortgage broker embodies everything that's wrong in our profession. I've never heard of a mortgage broker charging for such services unless the loan goes through. Many buyers get pre-approved and ultimately put things on hold or decide not to buy for one reason or another. I've never heard of them being charged for the lender's processing time. The time the loan officer spends in anticipation of the loan closing is just part of doing business.

Now, if you were in contract on a house and he already hired an appraiser to appraise the house, then he would be entitled to be reimbursed for that. But his processing "fees" sound like nothing more than sour grapes.

It's possible he may have had you sign something agreeing to pay him "processing fees." But, a buyer/borrower is supposed to get copies of EVERYTHING they sign. And it sounds like he clearly (purposely?) failed to do so.

What's more, you should have also received federally required Truth-In-Lending disclosures. You definitely should have received a Good Faith Estimate in writing WITHIN 3 DAYS of filling out your loan application. If you didn't get that, then he's in serious violation of the Truth-In-Lending Act. That's not only a Federal Violation, but if he's withheld copies of papers you've signed, you may have good cause to report him to California's Dept. of Real Estate ( http://www.dre.ca.gov ) as well. (As a side note, DRE was originally set up to protect the consumer from shady real estate practices.)

And as to his "claim" that the bank did him a "favor" by overlooking your husband's two-year work history, that's absolutely an out-and-out lie and smells of sour grapes. In today's economy/lending climate, no reputable bank is doing anyone any favors. They're scrutinizing every loan and making doubly and triply sure that it doesn't pose a risk. So if you were approved by this bank, it was because you absolutely qualified on your own merits; not because of any favors to your mortgage broker.

Based on what you said, I would tell this broker/agent that not only are you not going to pay his 'extortion' fees, but that you also may very well report his suspect actions and activities to the DRE and federal authorities. If he suddenly produces a document you signed showing that he's entitled to those processing fees, I'd immediately ask why you never were given a copy until now.

Fortunately, there are many good, honest, hard-working, ethical professionals in our business. But as in any profession, there always are sadly those who look out for themselves first and their clients/customers second. You unfortunately found one of those.

I've always found that those who try to wear both hats -- real estate agent and mortgage broker -- never do either very well. I would find a great, honest, ethical real estate agent in your area -- one who'll always put your needs and interests first and then have that RE agent recommend an equally reputable mortgage professional. That combination should help remove what's probably a very sour taste in your mouth right now.

It's very disheartening to hear stories like yours, for the rest of us who do our jobs honestly and admirably end up having to pick up the pieces and restore the faith in our profession with a client who's been exposed to the unsavory 'sharks' of our profession.

Obviously, I'm basing my answer solely on your brief description of what transpired, so it's possible there's another side of the story I wasn't privileged to hear about. Accordingly, as Deborah suggested, you may ultimately want to consult with an attorney if things get ugly and you and this mortgage/RE person get locked into a heated debate over these fees.

Best of luck to you. Once in the right hands, I'm sure things will go very smoothly and you'll get the service, professionalism and integrity you're sadly missing...and which you absolutely deserve.
Web Reference: http://homesection.com
0 votes Thank Flag Link Fri Jan 23, 2009
Loan officers do not determine underwriting guidelines, they follow them.

As it pertains to fees owed, it depends upon the agreement you entered. Ask for a copy of your agreement and review the terms. He may be calling a bluff. Even if the agreement states you owe the money, it may or may not be enforceable. Check with an attorney once you have a copy of the agreement.
0 votes Thank Flag Link Fri Jan 23, 2009
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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