What is the privacy law in regards to mortgage commitments? Are the real estate agents allowed to see a copy of the physical commitment?

Asked by Judy, 07702 Thu May 6, 2010

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, ,
Sat May 8, 2010
Judy, as Deb Madey stated, in some parts (as is generally the case where I am in Ocean County) the Realtors are very involved and often like to see a copy of the commitment.

So that I cover myself, I always send an email to the borrower confirming that they don't mind because the conditions can contain some sensitive information at times. Though I don't recall any specific law regarding the commitment, common sense tell me that it falls under your general privacy rights-as Robin has stated.

Fortunately for me, I never had a client who refused to allow me to forward the commitment. Is there a specific reason that you don't want your Realtor to see the commitment?

Good luck.
1 vote
Deborah Madey, Agent, Brick, NJ
Fri May 7, 2010
Hi Judy,

I cannot recall a transaction that I have ever "not" had a copy of the mortgage commitment. I am a Broker in Shrewsbury, NJ. As a brokerage, we are participants in MLSs throughout the state, and have represented clients throughout all parts of the state. The customary practices in northern NJ differ from those here in the Monmouth County area. In this central Jersey area, the agents typically carry more involvement with the transaction. In transactions at our brokerage, we commonly function very closely with attorneys as a team. We maintain an online transaction management system that provides access to the client, agent, broker and attorney. We would place the mortgage commitment on that system. (The other side invovled in the transaction does not have access.)

While it would be uncommon, it is your choice as a consumer, to withhold your mortgage commitment from your buyer agent. You can also provide it to your agent, but instruct your buyer agent to withhold your commitment from the seller's agent if that is your concern. However, contracts commonly contain terms that stipulate the buyer will provide a copy of the mortgage commitment to the sellers. You can have your attorney send it to the seller's attorney. However, that seller's attorney may well indeed forward it to the seller and/or seller's agent. Contractually, the seller may be entitled to have a copy. There's no way for anyone to predict whether a seller's attorney will forward to the seller or not. Some attorneys may simply inform their client the commitment is in, and the seller may not ask anything further. Other sellers may wnat a copy, and review and discuss the commitment with his/her real estate agent as their fiduciary and trusted advisor in the transaction. In a scenario as I just outlined, the person who would not see the commitment is your own agent.

A commitment usually has multiple pages and the conditions are generally listed on the secondary pages. You can instruct your buyer agent to share only the first page with the seller's agent. As a seller's agent, if I am given a mortgage commitment without the secondary pages and the conditions, my radar alerts instantly. Give me a commitment without the condition list, and I instanly become concerned that the condition list is extensive and the transaction may be in jeopardy of failing to close. As a seller's agent, I want to know a real status update of the progress of a transaction, and look upon a "front page only" submission of a commitment as a negative signal. I want to be aware of when the seller might be needing to look for back-up offers or what our strategy will be for a potential "back-on-market." I also want to know if we are looking at a delay in closing. Not all seller agents will be as watchful as this. I have represented buyers in transactions and gone to closing mulitple times when a seller's agent never once asked for a mortgage commitment. In some instances, there were problems, and the seller was never aware.

Bottom line....you can instruct your mortgage rep to withhold your commitment from the agents. As part of a condiditon of the contract, it may be distributed to other parties involved with the contract.

Deborah "Deb" Madey
1 vote
, ,
Fri May 7, 2010
Judy, it doesn't happen all the time, but I have been asked my real estate agents for a copy of a commitment. I will never send it to them without the permission of my clients, for exactly the reason you are stating, I feel that it is a privacy issue. Because realtors in NJ write the contracts, even though buyers and sellers both use attorneys, the agents feel that they have a right to a copy, whereas in NY, where the attorneys write the contracts and negotiate them, the agents rarely ask. The exception here is with co-ops, where the agents are generally the ones who handle the board package for the buyer. However, I still ask my client if it is OK with them to give the commitment directly to the agent.
Just an FYI, most commitments have a separate page with conditions. If you want the agent to make sure they see the commitment, you can give it to them without the conditions. However, sometimes you don't want the seller to know that a commitment has been issued unless you are sure that all conditions can be met.
0 votes
Leslie Tucker, , Red Bank, NJ
Fri May 7, 2010
Hi!

Yes, agents are able to see a buyers mortgage committment especially if they are the buyers agent. The listing agent for the property the buyer is buying does not necessarily need to physically eyeball the committment however. Finances were brought out early on to start and all parties are made prive to how much financing the buyer is taking anyway. It is the fiduciary duty however as the agent for that buyer to keep all private unless there are illegalities or other mitigating circumstances. Please let me know if I can be of any further assistance. I work in Red Bank. Thanks so much!
0 votes
Leslie Tucker, , Red Bank, NJ
Fri May 7, 2010
Hi!

Yes, agents are able to see a buyers mortgage committment especially if they are the buyers agent. The listing agent for the property the buyer is buying does not necessarily need to physically eyeball the committment however. Finances were brought out early on to start and all parties are made prive to how much financing the buyer is taking anyway. It is the fiduciary duty however as the agent for that buyer to keep all private unless there are illegalities or other mitigating circumstances. Please let me know if I can be of any further assistance. I work in Red Bank. Thanks so much!
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Thu May 6, 2010
Judy hello!

In northern NJ we use attorneys for our closings. When the mortgage commitment comes in, usually it will be sent to the seller's attorney to show that the mortgage contingency has been met............as a courtesy, it may sent to the agents, as wel - just to keep everyone "in the loop".. Since financing is a crucial part of any purchase, and a transparent part, it usually doesn't contain any secrets that need to be kept from those who are a party to the transaction.

I really don't know about "privacy" issues in regard to the agent seeing the commitment, but there may be contingencies in the comitment that the agent can help you fulfill.

If, for some reason, you are uncomfortable with your agent seeing the written commitment, I am sure you can make sure the attorney, or whoever is handling the closing on your side and the seller's side, are the only ones who have a copy.

Just out of curiosity, is there a reason you don't want the agent to see the commitment? After all - Your mortgage amount and terms were told to the sellers and agents from the beginning..........

Good luck with your purchase!
Best wishes...............
Debbie Rose
Prudential NJ Properties.
0 votes
Linda S. Cef…, Agent, Franklin, WI
Thu May 6, 2010
Judy,

Your loan commitment is part of your package. You should receive it from your lender, sign off on it and then the agent generally forwards it to the sellers agent. This document proves that the lender is actually going to give you the money for the home you are buying.

Perhaps there is a problem as to why you do not wish to make this public, but I would need a little more detail if that is the case.

Linda
Web Reference:  http://www.lindacefalu.com
0 votes
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