ARDELL posted a blog about getting updated pre-approval letters. Many of the comments related to whether the seller's agent should contact the lender and what right the buyer has to privacy.
When representing a seller, we ask for a pre-approval letter with the offer, so that we can ask any necessary questions before the sellers sign.
(When is a pre-approval letter NOT a pre-approval letter? When, despite the heading Pre-Approval Letter and/or Congratulations! you've been approved! is followed by verbage that says, subject to verirification of income or employment or funds to close etc. )
If the buyer's concerned - and he should be - about not revealing that he's qualified for a higher mortgage amount - many lenders will prepare several letters, each for different offered amounts that are less than or equal to the pre-approved amount.
I'm not trying to find out private information, and I'm sensitive to the lender's responsibility to protect that privacy, but I do need to know for my seller how secure the pre-approval is, if there are obstacles, etc.
Suggestion: always call the lender.
Don't call the number on the pre-approval, unless you know the lender and the individual. One of the reasons to make the verification call is to verify the authenticity. Sometimes letterhead will be stolen from a lender, and the lender has never talked to the buyer. Sometimes, for an unknown lender, the letterhead may come from WORD and the phone number is just a buddy of the buyer, who is prepped for the call. Checking out the lender online and calling the number listed there is just another safeguard.
Hi Sharon,
Good info. At times I've explained that some of the pre-quals, pre-approvals aren't worth the paper their written on.
I usually call the lender while I'm with the seller. I realize that most lenders speak with many buyers, but I also want to see if there is any recognition (on the part of the lender) of who the person is, how much they can remember about then. Also, if the lender is not available I want to see how long it will take them to get back with me.
Good Evening, Sharon,
In 2005 the Arizona Association of Realtors approved two forms that provide more Buyer loan information and lender pre-qualificaton and loan status updates than we previously had. Although they provide the e-mail and Mortgage license of the lender as well as the phone number I can see where due diligence is served by making that call to verify the information received.
Hope to see you in Phoenix for the Bloodhound Blog Unchained Conference May 18, 19 & 20!! Smiles.
Vickie - it only takes one fraudulent situation to put you ever on guard.
Lynda - I wonder how many lenders realize that we're constantly evaluating them in terms of whether we'd want to refer our clients to them.
Katharine - I was hoping/planning to go to the conference, but Tami and I are teaching a CLHMS class in Washington DC on May 10-11 and staying for the NAR mid-year conference so, unfortunately, that's just too much time away for me all at once.