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National Mortgage Professional
Aug 15, 2008

I may be crazyJoe Cornotype keywords here..SEPERATE BY COMAS ONLY(,) I may be crazythat sounds like a soft rock song I used to sing. However, I may resemble crazy, at least in regards to some of those who read my articles. Every once in awhile, I get an e-mail that makes me do a double-take on what I am telling the industry through my printed words. Most of the mail is flowery and sweet to my eyes"This is great!" and "I am blown away, man!" Of course, I appreciate the accolades. What I look forward to is the one that will take a position of defense or defiance and challenges the concepts and systems spread across the magazine pages. The "I respectfully disagree. and "No way, dude!" statements are my motive to write ahead of the curve, so that I know I have made an impression. The nicely-worded, yet disapproving mail lets me know that I touched a sensitive spot, and it has gotten someone to think about what has been written. I may actually have people burning some gray cells and thinking about how they do business. I received an e-mail recently that questioned keeping everyone involved in the transaction informed. This includes the real estate agents. The letter expressed that borrowers, in past loan transactions, told the originator not to tell the real estate people anything! The originator wrote that it was his job to serve the borrower and that the agent does not have to be informed. This may be a potential fraud issue waiting to be filed and pursued. As an originator, what valid reasons, including privacy, would keep you from updating others involved in the transaction? What if something happens that could constitute a "deal breaker?" My challenging pen pal uses the following scenario: The buyer, whom the sales agent referred, instructs you not to disclose personal data to any down-line or up-line agents namely, the sellers' agent. Your buyers are selling "for-sale-by-owner"(FSBO), and when they sign a contract while processing the loan, it is evident that they will not be able to qualify. Who do you inform? I decided to send the above yet-to-be-completed article to the dissenting new pen pal. During our correspondence, I found that I was exchanging blows with a 26-year veteran of the industry. The e-mails were enlightening, and I gained knowledge from someone that does business very differently than I do. The response to my invitation to complete the article is summarized like this: "What if you are just doing the purchase loan that the agent is involved in and you have nothing to do with the buyers of the FSBO at all? I actually do not have an answer to this. How would I handle it? I do not want to be involved in subterfuge, no matter how minor." My response is to place yourself in each persons role for a momentthe sellers of the new purchase, the agents, your buyers and the declined, deflated FSBO buyersand ask yourself: Who would not want to know critical information? Withholding the inevitable bad news is a greater act of subterfuge than respecting your borrowers wishes and feelings. You are not violating confidentiality or privacy laws because the FSBO transaction failure is not a personal or confidential piece of data. It is, in fact, a key element to a series of legal transactions and impacts various people and plans. Everyone involved should be aware of the current status. By withholding such important information, it only gets worse every moment you delay. At the very least, you may become a target for ridicule and negative comments. You may open yourself up to potential defrauding and non-disclosure litigation, and your license to do business will be in jeopardy. I may be crazy, but I would immediately be sending the status change to all those involved and would be representing every party in the transaction that I am financing. This, in itself, will eliminate undo burdens and emotions. I realize that our scenario does not have the intent to defraudor does it? If the wishes of your buyers cause damage to someone involved in the legal transaction, we have the makings of pretty good, legal action. Of course, your buyers will stay by your side and admit all conversations that they had with you, right? Not! Your buyers will position themselves for their own protection and preservation for obtaining a return of their earnest money deposit. In being swift to inform and communicate with everyone involved, you circumvent any cause of your withholding something crucial to the parties. I am not an attorney, nor am I quoting law. I am explaining the importance of always making the right choice. Always, always take the higher road and make the right choice. Joe Corno is president of Utah-based We Be Consulting and Seminars. He may be reached at (801) 836-2077 or e-mail
Aug 15, 2008
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