APPROVAL LETTER STATES RECOURSE TO BROKER AND AGENT

Has anyone actually received an approval letter stating the bank reserves the right to come after the brokers and agents? 

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Permalink Reply by Pat Chadwell on October 2, 2011 at 3:26am

Hi Mary Lou,

 

I think you need to provide the context in which this was said.  Otherwise all of us are putting in what we think a bank might have said.  Sounds like you have a lot of people interested in answering the question once all the data is provided. :)

Permalink Reply by Richard on October 2, 2011 at 4:58am

Guys,

 

Maybe someone can educate me as I'm still gathering information and learning about the real estate profession.  I'm going to ask a dummy question, wouldn't this issue be covered under errors and omission coverage?  Or, is Mary referring to criminal acts?  Errors and omission insurance seem to be a standard coverage in other professions.  Does real estate practice require this type of coverage?  Maybe Mary can add more details about this approval letter also.

Permalink Reply by Jeff Payne on October 3, 2011 at 2:19am

Richard, it may be covered in E&O providing that the agent has E&O to cover a short sale.  I wish Mary Lou would come back and clarify this statement.

If I were to venture a guess, she probably heard someone tell her that the banks are coming after agents as I have never seen an approval letter that stated any recourse to the agent.  Afterall, the contract is between buyer and seller and in my state I broker the transaction through transaction brokerage. 

Arms lenth is a whole different topic though

Permalink Reply by MaryAnn Dempsey on October 2, 2011 at 8:45am
Never. How could they. Were never the borrower
Permalink Reply by Ray Snook on October 2, 2011 at 5:49pm
Seems Mary Lou has gone missing... or run away because of the approval letter.
Permalink Reply by Michael Campus ABR,SFR,SRS on October 2, 2011 at 11:34pm

Mary Lou, can you put on your post exactly what the letter says?

 

Even if its a reference to 'arms length transaction', they (bank) would have to be able to prove it.

How much would that cost? How long would it take? Was there a violation of an actual law or just a bank policy?

Hmmm...I think banks are going to make alot more money with their new Debit card surcharges than attempting to pursue this nonsense.

Permalink Reply by Paola Martinsen on October 3, 2011 at 4:33am
its probably that they will come after the agent if there is fraud that the agent was ivolved in i don't think they could legally come after the agent for any deficiency because the note is between the seller and the investor or note holder.

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