Shakespeare offered “Much Ado About Nothing”. I was perusing this morning’s Washington Post and came across an article regarding an email sent by the owner of Long and Foster exhorting his agents to use the in-house lender. I was surprised to see that his note caused enough of a stir to reach the level of prominence that the Post gave it. Then, I stopped and realized this is the same instrument that has been extolling the death of the real estate market for months.
Later today, doing my usual reading of blog entries, I came across one from an Active Rain member. I had read some his other blogs and realized that even on Active Rain outlandish self promotion through “McCarthyism” techniques occurs. It is no mean feat to point at supposed enemies in our midst and create a stir with what, on the surface, appears to be sound, rational and probably factual statements. The problem occurs when the facts are checked and they don’t quite measure up to the “sky is falling” impression left with the original post.
Today’s entry actually reminded me of the accuracy shared in most political advertisements. You have seen them. Statements taken out of context used to paint an opponent in a corner. The advertising camp can sit back and rejoice how we put a spin on that one. Voters are left to ferret out the truth.
There was an anonymous quote in the article.
An agent offered, “I’m thinking that some agents will feel psychic pressure to use only Prosperity Mortgage,” the agent said. “I’m supposed to give my clients the best service, and that means helping them find the best loan.”
I had to read the sentence a few times. I was not sure if it bothered me that there was an agent that thought helping a client find the best loan was part of her service or if I was concerned that the agent actually believed that statement.
In either case it is a rather sticky web of self importance she is weaving.
Claiming to be responsible for finding your client the best loan certainly opens a larger can of worms than referring a client to an in-house lender for pre-approval for a loan. What authority gives any agent the right to determine what is the best loan for any client? Does that agent truly want to accept the liability for every loan that she recommends? The only person that can determine if the loan is the right loan is the client. You do need to make sure that they understand the terms and conditions of the loan. They decide.
The law is pretty clear. You can not advise a client about anything except real estate. You can not step in and give financial advice. You can not step in and give legal advice. You can not.
You may have wonderful intentions. You may feel you are doing the right thing protecting your client. You are only stepping outside the boundaries of your fiduciary responsibilities and leaving yourself exposed to unwarranted liabilities. Our profession is based on the law. Everything we do is deeply entrenched within the law. Using your personal opinion to direct a client anywhere is outside the law.
If a client says, “I don’t have a lender”. You can not reply “Here is a lender’s number, call them.”
You can share with them, “There are several good lenders in this area. I would recommend that you contact a local lender, so that we will not run into problems getting the necessary documents to the settlement office in a timely fashion. I have worked with XXXXXX in the past and they have always funded closing within the contractual time. If you would like their number, I will provide it.” “As soon as you decide who you wish to use, I will be glad to contact them and set up an appointment. I will go to the first meeting with you. It is important that I have a relationship with whomever you choose to fund the transaction. Also, you do not have to use the first lender that you speak with. They will provide you with a Good Faith Estimate, which you can use as a bench mark in speaking with other lenders.”
It is up to them to decide whom they wish to contact. It is up to them to decide whom they choose. If any agent thinks that they are going above and beyond the call duty by choosing the lender, they are not. They are stepping outside the law. This practice could lead to anarchy.
There is no room for anarchy in this profession.
As always, I welcome your questions and/or comments. Feel free to write me an email if you have specific issues that you would like me to address.