First of all, let me say that I'm not an attorney, so I can't tell you what is legal.
Now, let's talk practical.
It is contractually allowed, (and a common practice) when using a standard California Association of Realtors (CAR) residential purchase contract, to ask for a Buyer to apply with a lender specified by the Seller. This is expressly done to assure the seller that a lender, in whom he has confidence, has looked at your creditworthiness and is assuring the seller that based on your financials, you will be approved by a lender.
There is a clause in the Agency Disclosure which reads as follows:
"An agent is not obligated to reveal any confidential information obtained from the other party that does not involve the affirmative duties [listed in the agency agreement]. "
Those duties do not include the disclosure of the buyer's financial records. In other words, in all likelihood the agent probably need not disclose your financials.
Additionally, in the Disclosure and Consent for Representation of More than One Buyer or Seller, there is a clause that reads as follows:
"NON CONFIDENTIALITY OF OFFERS: Buyer is advised that Seller or Listing Agent may disclose the existence, terms, or conditions of Buyer's offer, unless all parties have signed a written confidentiality agreement."
Whether your financials would apply, and whether you signed the Disclosure and Consent form are items that I cannot address.
Here is where I stand on this issue:
When I interview a client who wants to purchase a home, I have them meet with a lender at the same time. I leave the room, and expressly state that their conversation is confidential. I never ask for anything other than pre- approval from the lender, as it is my belief and standard of practice that the financial qualification of the buyer is a private and confidential matter, best handled by the professional whose job it is to consult on those matters. I also include a confidentiality agreement as part of my client's offer to purchase.
I would recommend to any buyer that he/she make it clear that, in complying with a Seller's request to apply with the Seller's mortgage broker, all parties must agree to and sign a confidentiality agreement that restricts the financial agent from disclosing any confidential financial information to any of the parties.
I think that disclosing anything beyond a Buyer's qualification to purchase the property, to any party in the transaction other than the Buyer, without the express permission of the Buyer, is a breach of confidentiality on the part of the lender. I include in that statement the release of FICO scores, etc.
Sorry for your experience.
Best of luck in your purchase.
Certified Short Sale Professional
Coldwell Banker Brentwood West
11999 San Vicente Blvd. Suite 100
Los Angeles, CA 90049
Blogging at: http://TheBremnerGroup.com/blog