Mortgage Myth Busters: Fiduciary Responsibility - Realtor and Loan Officer

Fiduciary Responsibility - Realtor and Loan Officer

integrity - fiduciary responsibility


We hear so many realtors talk about Fiduciary Responsibility. In comparison, this word is waved around by many realtors just like the American Flag and how the flag symbolizes the United States. The flag is seen a lot, all over, but do many know it's true meaning? I feel the same about the phrase "fiduciary responsibility" Wikipedia says this : 

A fiduciary duty is a legal or ethical relationship of confidence or trust regarding the management of money or property between two or more parties, most commonly a fiduciary and a principal.

The realtors fiduciary responsibilities are described as fiduciary duties of a realtor. If we take this one step further, to define these duties for realtors, NAR states this :



  • Loyalty
  • Obedience
  • Disclosure
  • Confidentiality
  • Reasonable care & Diligence
  • Accounting


The fiduciary responsibilites mentioned above which NAR set forth are decribed in detail in these two artciles.

Fiduciary responsibilites by : Buyer Only Realty and Fiduciary Responsibilities of a Realtor by : Ronald Kimmons who si a contributor for ehow.


How could I sum up the duties of a realtor? A realtor should be acting in the Buyer's or seller's best interests. Can we agree on this? But my concern is that some realtors take this to far at times. What do I mean by this? That they should give advice when it comes to mortgages and or title. There will be some that will argue with me on this topic. My question, how far does one take it. How about the realtor that does both real estate and mortgages at the same time. How does their fiduciary responsibility take place? Real ramifications to realtors giving mortgage advice to their buyers.  Or what about that realtor that becomes a dual agent and tells both sides that they are working for the best deal for them. How can this be? I wrote about dual agency and there were many interesting topics. Are you a dual agent and do you properly disclose.


Let's look at loan officers. Are they held by any code of ethics and or a fiduciary responsibility to their clients? Not on paper, it's just implied. Sure, one could push the envelope regarding the new licensing laws for loan officers. But in reality, all a loan officer has to say is, "I am giving you the best mortgage deal or the best mortgage program." How does the borrower know this? It comes down to trust. But does a loan officer properly review the borrowers goals and financials and give the proper advice? I don't think so. Let's take this one step further.

On paper, the borrower is approved with little money down and no reserves. Shouldn't we as loan officers properly prepare these borrrowers, giving them good insight on what they need to think about when it comes to cash reserves? I just wrote these three posts that I think sums it up for any and all buyers.



Summary : Do we fling words and or phrases around that just sound pretty, might have some good meaning, yet we don't follow what we preach and or use? In my opinion, I think so. We all want to believe that everyone in real estate and mortgages are ethical and upstanding, that they look out for the consumers best interest, but we know this is not true with everyone. And I just like putting this out there for consumers to think hard about this kind of stuff. Buyer beware of the warm fuzzy phrases.

I guess my main point is that how many just throw around the phrase, "fiduciary responsibility or duties" to their respective clients, defining what this term means, making them think that they are working with the best realtor.  It would be like me saying to you, "I am extremely honest"... Shouldn't I be this already? Why must I sell this? Just foor for thought.



~ As realtors, how do you view this topic? ~



Wrote about this a few years ago... with some excelletn comments.

Realtors have a Fiduciary Responsibilty..... What about loan officers???





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Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Comment balloon 46 commentsJeff Belonger • February 04 2011 08:18AM


Warm fuzzy comes after all the disclaimers and warnings and disclosures.  I take my role very seriously and keep to the standards NAR sets forth.  Anything else will bit you in the butt and we know how uncomfortable that can be!

Posted by Barbara Chatterton, Greater Madison Wisconsin Area Realtor (The Stark Company Realtors, Madison WI) almost 10 years ago

It goes both ways Jeff...I see many LO's or mortgage brokers giving their clients advice on the Real Estate side of the transaction and they're not even a licensed agent. I would not give anyone any advice regarding mortgages...I leave that to you guys. If someone asked me how the rates are...I have to point them to someone who would know and I expect them to do the same and not to get involved in nnegotiations in a transaction for a buyer.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (Brokered by eXp Realty LLC) almost 10 years ago

Stick with what you know and that is it. I do real estate. My loan officer does mortgages. Keep It Simple and Straight.

Posted by Harry F. D'Elia III, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (RentVest) almost 10 years ago


This is my view:

I list and sell houses. You sell the money.


Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) almost 10 years ago


BARBARA... .. I know many take their role seriously.. I guess my main point is that how many just fling around the phrase, "fiduciary responsibility or duties" to their respective clients... making them think that they are working with the best realtor.  It would be like me saying to you, "I am extremely honest"... just foor for thought.. thanks

NEAL... .  I am not going to disagree at all.. maybe I should have added that part. I wasn't trying to pin this all on realtors. But even if the loan officer was a licensed real estate agent, what are your thoughts on that? And then where does their fiduciary responsibility set in??

HARRY... . I am going to agree... but there are still to many out there that do both... or that just give advice outside their profession.

MARGARET... . a very simple view... but I keep coming across people that have their hands all over the transaction.. giving advice or knowledge on both sides.. thanks


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago

Jeff, woo hoo to you to bringing this forward!  I'm with Margaret & I always forward mortgage questions to my mortgage people...If i'm a dual agent I represent the seller & am a transaction facilitator for the buyer ..CLEARLY explained with paperwork...Realtors are not careful here from what I see...thanks

Posted by Ginny Gorman, Homes for Sale in Southern RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) almost 10 years ago


I think it's like common sense. If it is so common, why are we surprised when we find it.

Have a great weekend!


Posted by Steve, Joel & Steve A. Chain (Chain Real Estate Investments & Mortgage, Steve & Joel Chain) almost 10 years ago

Hi Jeff, You make some excellent points. Stick to what we are experts at. Because so many NYC buildings are having financing problems today that never have before, it is more important than ever to have a good mortgage broker that knows the local market.

Even though I've had listings in buildings that I know have financing issues, I rather just give the name and number of a mortgage broker than scare buyers away by telling them there are going to be financing issues with this property. My fiduciary is to the seller. When I represent buyers I'll help the loan officer with information questionaires etc if they ask.

Sorry I missed you at ReBar this year. I was so busy I totally forgot. Adina in my office told me about it after it was too late to go.

Posted by Mitchell J Hall, Lic Associate RE Broker - Manhattan & Brooklyn (Compass) almost 10 years ago

Great post JB.  What gets me is that under the new Frank Dodd act there is personal liability up to 3 times the commissions earned on a transaction.  The fiduciary relationship really is created by law, although not in contract.  We're put out there as advisors for the biggest transaction in a person's life.  We do act the part, even if we don't have a contract stating such.

Posted by Larry Bettag, Vice-President of National Production (Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001) almost 10 years ago

Fiduciary duty is always a good topic to visit frequently.  I think sometimes in wanting to help a client, many agents try and put on the lender hat, the inspector hat, the tax man hat, etc.  Giving out advice in areas where we are not experts is dangerous indeed.  Best to defer to the experts in the respective fields in order to guide our clients to the best of our ability.

Posted by Paula McDonald, Ph.D., Granbury, TX 936-203-0279 (Beam & Branch Realty) almost 10 years ago

Good post Jeff, as usual, what bothers me, especially since the whole housing mess started is how few mortgage loan officers even ask the buyers what monthly payment they are comfortable with. That is important, yes, maybe they can afford more, but no one likes to be house poor and that is an important question to ask in the process. It is interesting in talking with buyers how few of them have ever had a really hard talk with an agent before they start looking at homes. Agents just take them out without ever sitting down and finding out about their wants and needs, let along explaining agency to them.

Posted by Nick Vandekar, 610-203-4543, Tredyffrin Easttown Realtor, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) almost 10 years ago

Jeff - I just want to touch base on 1 part of the blog. Sometimes, it's the clients preference to whom she/he want to contact about questions - even if it is a mortgage one. Why? Because we built that relationship (perhaps longer and deeper) than the mortgage person has.

We've spent hours of our weekends together. We get to know each other pretty good. The trust is built. The client wants an opinion.

All that being said, I'm a firm believer of letting the professional do his/ her job. I will refrain from making comments I have no professionalism of doing but that's a tough spot to be in. It's easier to put the trust back on the mortgage person especially when you trust him/her. It's another that you have no history working together. The client found this person on a webpage somewhere.

Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co.) almost 10 years ago


GINNY... . From some that I have talked to, they are not careful.. and Trulia is a prime example where realtors answer many mortgage related questions.

STEVE... . ah, common sense.. it's not so common any more.

MITCHELL.... . I would agree with everything that you have stated. I guess my question is then, do some realtors take it a step further as their fiduciary responsibility in helping consumers, even when it comes to mortgages. And yes, sorry to have missed you last month.. next time and hope all is well.

LARRY... . I think loan officers should take this more seriously also, as many realtors do... and focus on what can help the buyer and not just give them what they want. And thanks for the polite compliment.

PAULA... . As I mentioned to Mitchell above, I think that is the biggest problem, that realtors under the fiduciary duties, that they want to help as much as they can, put on numerous hats and such. In my opinion, there needs to be a line drawn.. thanks

NICK & TRUDY... . I am so with you on the part that loan officers should be focused on what they are comfortable with and not the max they can afford. I write about this often...  How much of a mortgage payment can I afford? What's sad is that I was attacked by a loan officer from the Philly area about 2 years ago because i brought this up.  She told people in her post to run away from people like me if I brought this up in the beginning, when interviewing a new buyer. She called me a used car sales person.. LOL   Very sad...   Here is that article that AR left up..  Mortgage Professional or Used car sales person - Overall, we just need to better educate borrowers... and thanks for the polite compliment.


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago


LOREENA... good point and this is mentioned often.. Okay, so you have established a good relationship with the consumer first... and yes, it is tough.. but isn't the best answer that would be respected by that borrower to say that they can't answer, because it would be of their opinion?? 

I have had realtors tell me that they don't trust many loan officers, that many aren't good.. but again, just because that realtor has built that trust, talked to them first, should they get knee deep regarding mortgages.  Or take over because they don't have faith in some loan officers?  I don't think so... and I respect you and your knowledge, but I will stand very firm on this position. Yes, there are still many loan officers that don't know what they are doing. What a realtor should do is tell the borrower to do their due diligence, research, and give them places where to get such good info. If that realtor has established a good relationship, they should be able to lead that borrower to a great drinking well of knowledge. Shouldn't the realtor be saying... "I am not 100% sure because it's my opinion and you are better off talking to a good loan officer."???


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago


Even though I'm a licensed NMLS Approved MLO, I don't involve myself with the financing side of the transaction in terms of rates or fees. If I'm asked, I send them back to their MLO.

That said, I will get involved when things are not happening. I called an MLO this week trying to find out when they were going to order an appraisal on one of my listings. I have a responsibility to the seller to get this to close on-time. What I found out was that they had not even submitted the loan to underwriting and we're less than 2 weeks to closing on an FHA loan. Do you think this will close on-time? Not much of a chance.

My experience on the lending side makes me a better real estate broker.

BTW, I've seen MLOs get involved in the real estate side as well.



Posted by Tom Branch, Broker, CDPE, SFR, ACRE, Plano TX Ambassador (RE/MAX Dallas Suburbs) almost 10 years ago


I never said you stuck it on us. I might not always agree with things on your end of the industry but it's usually when someone who claims to be an expert on both sides and really doesn't know Jack.

I'm like Margaret...I list and sell and rent houses..that's my gig for about 16 yrs.

I personally haven't come across anyone who wears two hats that seems to know what they're doing. I think it's best to stick to one job...I get the idea that some agents are also loan officers for the sole purpose of picking up additional business. I'm just not sure they have the clients best interest on both ends...can be more of a conflict. I'd rather hand off one end to one person....and just take a referral if it applies. I was once approached years ago by another agent who asked me if I wanted to get in on the mortgage business...all I had to do was fax over applications and get paid on them if they were approved...I balked at it as I didn't want to mix my already established career with another...that's just me..if it works for you then great but I think you take on another liability. That could compare to someone being an inspector and the Realtor too.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (Brokered by eXp Realty LLC) almost 10 years ago

I buy and sell homes, you take care of mortgages. I'd rather keep it that way. Sure, I can answer simple mortgage questions, just like you can with real estate questions, but we should let the pro's do what they do best. "suggested"

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) almost 10 years ago


TOM... .  that's good to hear... and I have no problem with a realtor that gets involved when things aren't happening.. that is good.. it's those realtors that give answers to mortgage questions or give mortgage info. I had a client tell me once that they were told that they didn't have to pay off any medical collection accounts. First off, there is a cut off on amounts, that it depends on how many and the reasons why, and if it is on title or not.. I then asked them where they got this info from... they said their realtor. Rut row.. these can be lender overlays and ultimately comes down to the lender/investor.  and good luck on that FHA closing in the next 2 weeks..

ERICA... . thanks for the polite compliment and for suggesting this..

NEAL... .  I know you didn't say that I said that you said.. lol  I just wanted to clarify, that's all.. in regards to those that wear two hats? I have come across more than a handful in the last year, and that scares me.. I have come across some here on AR and have read some blog posts outside of AR. Overall, we both agree with your statements and those of Margarets.  thanks and thanks for stopping back.

ERIC... that would just be common sense... but I guess we can assume that so many don't have common sense then?  Take fiduciary responsibility a little to far?  thanks


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago

When I started in Real Estate, I was expected to know all about mortgages. We agents often prequalified buyers ouurselves and sent them to a LO only after determining the prospect was a serious buyer.  Mortgages were simpler then with very few choices and most people had downpayments. 

I learned enough to really appreciate a good LO. Unfortunately not every LO is looking out for my clients so I do try to keep up with loan requirements so I know when a client is not being treated well.

Posted by Maureen Fukumoto, Maureen (Help-U-Sell Realty Pro) almost 10 years ago

Excellent data and information. Too many of us never pay any attention to this imporatant knowledge.

Posted by Chris "The Loan Ranger" McBrearty, NMLS 274079, FHA, VA, USDA, Loan Officer and Educator (Fairway Independent Mortgage, DBO/CRMLA #41DBO-78367, NMLS #2289) almost 10 years ago


I own two hats, but I only wear one. My MLO license is inactive. I find the background to be helpful.

I originated for about 10 years so I have a first-hand appreciation of what you guys (and gals) are going through. I heard Wells Fargo release their rules for complying with the LO Compensation Provisions of Reg Z. I have not seen them yet, but once again the Fed is going to hurt the business and cost the consumer money...


Posted by Tom Branch, Broker, CDPE, SFR, ACRE, Plano TX Ambassador (RE/MAX Dallas Suburbs) almost 10 years ago

This is always a good topic to revisit.  I agree with a reply that stated MLO's often times do not ask a client what they feel they can afford.  I'm currently involved in my own deal and my MLO couldn't understand why I didn't want to spend what I was approved for.  I'm suprised that this still happens after the whole lending situation. 

Posted by Tracy McPeek almost 10 years ago

i'm having a flashback in southwest florida. back when i started in good olde NH we would discuss low/no downpayment loans with the buyers in regards to the fact that they were making a commitment to the property of x amount of years, that being that in all probability the could not sell the property for at least 3-5 years without bringing cash to the closing.

this is an issue here in southwest florida with govies offering low/no downpayments. the buyer, in all likelihood will not be able to sell the property for x amount of years. in this case 3 would probably be generous, 5 might be okay.

one Realtor did not enjoy my having this discussion with the (first time) buyers, but i did anyway 

Posted by Jay Beckingham, Seniors ROCK! (Christensen Financial Mortgage) almost 10 years ago


MAUREEN.. . yes, this was the norm back in the early to late 90's.. and after a few years in this business, I stopped handing out real estate calculators to realtors... especially now, there is just to much to know and to ask, to properly tell a borrower if they are qualified. And I understand keeping up with the loan requirements, making sure that your buyer is getting treated fairly. But in the last year, I have had a few realtors step in and advise their buyers, and it was wrong info or misleading... So even keeping up on some stuff, how does one truly know if it's good or not, or right?  Just putting it out there. Because how does one know if another is truly being treating unfairly, unless you do many transactions a month, knowing different situations. thanks

ERICA... . you just wanted your points.. lol <teasing> Hopefully good busy..

CHRIS... . I just think that because so many know the basics, or because of things that took place even last month, that it's easy to give advice. And thanks for the compliment..

TOM... . I applaud you for only using one hat, even though you own two. I haven't heard about Wells releasing any info on the new comp plans... but the new YSP ruling will take place April 1st... overall, no matter how you slice and dice it, it will hurt borrowers.. The gov't needs to stop over-regulating.. thanks

TRACY... . I am just laughing from within... that is soooo sad, that the loan officer doesn't understand that you don't want to max out in what you are qualified for...  Might be petty, but I would find a new loan officer. It just makes you wonder if he truly understands, knows what he is doing, and if he has your best interest at hand... just saying.. thanks and thanks for the polite compliment.


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago

Jeff, the success of a real estate transaction depends upon the entire team of professionals involved, not one person wearing all the hats. Since I handle the real estate side as a real estate broker, I enlist the services of a mortgage broker to handle the financing side. :)


Posted by Bob & Leilani Souza, Greater Sacramento Area Homes, Land & Investments (Souza Realty 916.408.5500) almost 10 years ago

NOT fuzzy words at all Jeff and our role is to be tight and on the same page as the party we represent with their money on the line.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 10 years ago


Interestingly enough in GA a real estate broker's responsibility is NOT fiduciary under law. But one'w best business interests will always coincide with doing the best work you can for your client.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) almost 10 years ago

Good Post, back in the day i can remember doing the qualifying ratios ourselves. back in the day before preapprovals......

Posted by Larry Costa, Realtor, MA Real Estate (Century 21 Classic Gold, Carver MA) almost 10 years ago

Jeff: Thanks for your food for thought. I hardly ever throw that term out there. I'm not sure I hear it much either. It's a big word that makes a person sound like they know what they're talking about. At the end of the day, it's more about service and results and how you got there. Fiduciary responsibility means nothing if it's achieved in a questionable manner.

Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) almost 10 years ago

Well Jeff,

I have originated loans for 25 years, I remember when I was the only FHA deal in town, I had little or no competition and could charge what I wanted. Well all good things eventually come to an end, Things changed and every Tom ,Dick and Cindy the car salesman got into our business . They new how to ask for the money.they made a mess of our industry but they did well when all you need to do was fog a mirror to write a mortgage.

Now with State Licensing, education, background checks, credit checks and bonds to be issued as well as a change in the economy. One has to know the system and know how to work the system to make a living.

I guess the industry has made a full circle, With Dodd-Frank going into place April 1, and our income being caped based on one price for all. (adjusted for risk)


Will a Loan Officer be able to make a good living come April? 

Will Loan officers be willing to work on tough loans?

Will the Big players in the Mortgage Industry move there efforts in a more profitable areas of lending?

Tell me more about Fiduciary Responsibility!!!!!!!!

Posted by Thomas Tom Carpenter (VanDyk Mortgage Corporation) almost 10 years ago

Hi Jeff: I am a licensed Associate Broker not a Mortgage office. so I mention some of the programs I know of but I would be very foolish to claim I know them all and for that reason I refer them to several mortgage officers where they can get the expert advice there...    Best, Gay

Posted by Gay E. Rosen, As Real as Real Estate Gets! (Julia B. Fee Sotheby's International Realty) almost 10 years ago


CORRINE... . who cares what others think if your comment was long. Some say they don't like long comments.. I don't mind them.. at least it shows that you have something to say. Overall, yes, we both agree as do many others... just stick to what you know best in your profession. thanks

JAY... . that's the part that cracks me up... you are just trying to make the buyer aware of what they are getting into when others are just worried about the sale and their commissions. thanks

LEILANI... . I agree, it's about the team, even if the realtor doesn't know the loan officer. And if not, get to know them and ask questions. But to start wearing many hates, in my opinion, not good.

GARY... . it is a tight role and we should take it seriously. I just see many throwing certain words and or phrases around, yet that person is not good for the situation.

ERICA... .  come back later on if you need 25 more points.. lol

RICHARD... . I should have stated that each state is different when it comes to fiducciary responsibility and or whats recognized or not.. thanks for sharing this.  But yes, overall, it should come down to doing the best for your client. Which brings me to this post, because thinking what you know and wearing other hats, just because you want to help, can actually makes things worse or hurt that borrower.

LARRY... . yes, and even back then, realtors shoudn't have gotten that deep into it. But now?  Especially not now.. and thanks for the compliment.

PAUL... . well, as I stated, a loan officer doesn't have a fiduciary responsibility, so as a loan officer, you shouldn't be throwing that around. Just my opinion... and your last sentence says it all.. thanks


THOMAS... . 25 years?  You look much younger from your picture.. lol  But seriously, I am still going to disagree regarding the system with the new testing, background checks, and so much more. One can pass all of this and still not be more than average and still do harm. I am still seeing it from loan officers that work for small and large companies. And right now, large banks such as Wells, those loan officers just have to register their name.  Come April?  This will definitely hurt those borrowers that need help and work regarding their loan and I predict many more will start to drop the ball more at a certain point, knowing that they aren't making much. Sorry, but it will happen. Overall, the gov't needed to stay out of this arena and not over-regulate. It already has started to backfire some... and will get worse when loan officers will be expected to work harder and longer for a semi below average deal, yet get paid less... but again, just my opinion..


GAY... . just curious... why would you mention some mortgage programs when you could miss others?  And if that buyer trusts you and hangs on your every word... what if the loan officer tries to show them something better, but the borrower now says no, because their real;tor gave them a run down of some of the programs and they are only listening to that realtor? I bring this up because I qualified a buyer once for a USDA loan and the realtor told them that was not a good loan, that they would be better off with a FHA loan.. Yet my numbers said she was wrong... yet it took me 2 more days, of my time, to educate the borrower even further, to make them aware.. a lot of going back and forth.. and more of my time, because a realtor stepped in and made waves, on nothing she knew of... thanks


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago

Jeff, I think that many of the agents who use the term as a peacock feather don't really do the best job of walking the talk. The law does hold us to standards that should be respected no matter the nomenclature. And not just because it is the law, but because it is the right thing to do. 

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) almost 10 years ago

Sorry to hear this is still happening, Jeff.  You could do one of two things:  Confront the agent and give them the boundaries and if they do not abide, them never work with them again.

You are passionate about your business and it shows.  I have been accused of the same thing.  It is a good thing.




Posted by Barb Van Stensel almost 10 years ago

Jeff, great information.  Thanks for reminding us about what those words really mean.

Posted by Carla Morin (Brookfield) almost 10 years ago

In California, I have to maintain a real estate license but wouldn't think of getting involved in the agents' area of expertise.  And my broker doesn't allow it!  I do, however, take very seriously the fiduciary responsibility that is part of my real estate license. 

My clients often have a max payment amount in mind.  I take it a step further, though.  I tell them approximately what they can qualify for, then immediately suggest they shop for homes priced less than that so they are not strapped and are prepared for unplanned expenses like repairs.  I believe that is "care and diligence".  All ethical members of our business should want, first and foremost, our buyers to be successful homeowners.  I will politely turn away clients that can qualify on paper but have absolutely no business buying a home.  Sadly, other lenders will give them mortgages.

Which is why I sometimes use the nickname "Honest Ed".  (That title was given to me buy a Escrow Officer with whom I have worked.)  The image of the loan originator has taken a beating in recent years.  Not many people expect us to be honest.  And, unfortunately, some con artists are still in the business.

Posted by Ed Gillespie (WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850) almost 10 years ago

Jeff … “Do we fling words and or phrases around that just sound pretty, might have some good meaning, yet we don't follow what we preach and or use? In my opinion, I think so.” Speaking for the masses this may be a true statement. However I personally take exception to it. There are so many things other agents and lenders do that I simply would not do. I do, at all times, have my client’s best interest at heart. I have never thrown a client under the proverbial bus … yet I watch agents do so all day long. Sadly, some are so darn clueless … they do not even know they are doing it.

Posted by Kathleen Daniels, Probate & Trust Specialist, Probate Real Estate (KD Realty - 408.972.1822) almost 10 years ago

Jeff: That is the reason I stated that I refer them to a mortgage professonal to explain the programs... PLUS it is the perfect opportunity to discover what they are pre-approved for prior to my taking them out, and they can speak in an honest manner with a professional in THAT area (I am a Realtor). I am not an attorney, an inspector, or a mortgage broker BUT I can refer you to those professionals.... I will obtain the best price for my clients.. that is my expertise.  Just as I had said, I  will mention a few programs to them.. and then DIRECT them to a mortgage professional for their expertise... No need to twist my words. . best, Gay

Posted by Gay E. Rosen, As Real as Real Estate Gets! (Julia B. Fee Sotheby's International Realty) almost 10 years ago

Jeff: good morning! I didn't comment when this first went up because I wanted to think about my answer. It's a little more personal but I hope it's OK.

I recommend a few LOs. They know their business, their staff are responsive, and we have a shared language and set of expectations. But many buyers come to us with an existing relationship with an LO and of course we can't undo it. These are the transactions that can take far more effort than an established relationship.

Then there are the national organizations...respectable, not interent junk. The LO might be OK during the early days, but processing and funding can be a nightmare and all the LO can do is bleat.

I did 5 transactions last year with relo in a national lender. I can't begin to describe the disconnect between them and our closing table....every single one had problems at the last minute despite these all being perfect buyers. Laws and practices vary from state to state and national centers do not -- cannot -- know them all.

At one in July the processor waited until the morning of the closing to ask for changes in the HUD and sent me an email. I emailed her back -- contact attorney, I have nothing to do with HUD. We show up for the closing, no HUD because she sent an email to attorney's general message box. Two hour delay.

At one two weeks ago with a high value loan for a VIP client, the closing was held up for three hours while a funding underwriter fussed with an Illinois POA. We had two attorneys in the closing and some nit in Texas made the head of the Chicago Title office and both attorneys change the language in a standard Illinois doc. Mr. Buyer was not pleased with the delay. And the shame is that while the entire transaction was smooth, the closing will permanently mar his memory. I get scored by relo on transaction and if the lender dorks it up, I might pay with future business.

Jeff, each time an agent goes through these sorts of experiences he or she is likely to become a little more overbearing the next time. So while I respect the boundaries in principle, I increasingly have no choice but to be far more involved than I would like. Best I can do is to give my buyers lists: ask them this, ask them that, ask them again, get it in writing, ask again if they've done that. It's discouraging.

(PS: capitalize Realtor, please!)

Posted by Leslie Ebersole, I help brokers build businesses they love. (Swanepoel T3 Group) almost 10 years ago


PHIL... . that was one of my biggest points.. those that talk the talk but can't walk the walk.. thanks

BARB... .Well, I just wanted to bring this up as topic and not that it happens to me.. I just hear so many on AR and in general that talk about fiduciary responsibility.... and just wonder how many hold this true to their heart and act upon it.. thanks

CARLA... . my pleasure and thanks for stopping by..

ED... . it's good that your broker acts on this and doesn't allow it... I think it's a fine line that should not be crossed, no matter how ethical or good that person thinks they are... and honest Ed, I like it..

KATHLEEN... . I think it comes down to that many don't follow what they preach or state... thanks

GAY... . I guess I still question programs being mentioned... maybe wait until the buyer speaks to the loan officer and ask that buyer.. what programs did they go over?  If you know of a special program in your area, such as the USDA or a state bond program, and the loan officer didn't mention this then.. you tell the borrower to go back to ask them about it.. and if the loan officer has no clue, maybe make suggestions to them, in finding someone else..  but this can also be a fine line as I mentioned in my example, to where I had a realtor swear by the FHA program, telling my buyers that the USDA loan was not as good... that ticked me off, because the realtor was dead wrong.. just food for thought on how realtors present programs.  that was my point.. thanks


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago


LESLIE & ERICA... I guess I am misunderstood at times... it's those realtors that swear up and down to the buyer about a specific program that might be in the wrong, who they usually are in contact with first... 

Erica... we talked about that loan officer the HUD program and I agree, you needed to step in and soon, as you did...

I will say this.. I have no problem with a realtor questioning me or asking me.. I will explain to them in detail.. but let me explain this example... and why I like to write posts like the one above.

I had a borrower that found me online last year, who already had a realtor. I went over my questions and their goals... they were buying in an area that USDA loans are done... a USDA loan is better than a FHA or a conventional loan, hands down.. I qualified them for this loan and showed them why. Their realtor once she received my pre-qual, told them that FHA was better.. that USDA loans aren't as good. After I explained this to the buyers and told them to ask around.. they came back to me the next day and said their realtor even spoke to her loan officer who said FHA was better. Now, did she talk to her loan officer? I have no idea.. and if the loan officer agreed, especially since he never talked to these buyers, I have a problem with him and his statement.

Overall.. I know the fine line that some loan officers screw up or don't have a clue. But in some cases, even if the realtor is sure of themselves, are they giving the right information or advice?  Just saying.. now in Erica's example, hey, I have no problem.. you know your area well and have done HUD homes.. and know what to expect...  my whole point is because the realtor usually has built a good relationship first with the buyer, that buyers will take what realtors say over loan officers at times.. and can they be giving wrong info?  Certainly.. and realtors should not be pre-qualifying borrowers... and many think they should, because they know mortgages better... but unless you do mortgages daily, how does one truly know? 

Overall.. thanks Leslie and Erica for your feedback and input.. it adds to this conversation.


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago

Hi Jeff: I guess that was our mis-communication - you were comparing with me with another Realtor!  If my client likes a home that requires renovation - there is a Wells Fargo constructons loan - you can lock it in for a year, and with half .5% more... If a client is looking at a property that is still to be built rather than have them feel they cannot move forward, I can mention there are several loans available to them - BUT to speak to their mortgage broker (and I offer several) who can better advise... I would be very foolish NOT to mention a program not allowing them to move forward if they so desired. That is all.. NOWHERE did I state that an FHA loan is THE loan to have..(?????)  I merely stated that I refer my customers to a mortgage professional for their expertise... and that is what I do..  I feel strongly on being misquoted so have to comment. Best, Gay

Posted by Gay E. Rosen, As Real as Real Estate Gets! (Julia B. Fee Sotheby's International Realty) almost 10 years ago

GAY... I never said you said anything directly about a FHA loan, good or bad.. I did not say GAY said this.. Please read my example again.. I said a buyer that I was dealing with, their realtor said FHA over USDA.. I never said Gay.. besides, I have never delt with. Sorry that you might think I was talking about you, but I wasn't... so no reason to defend yourself..  all I have stated is that I disagree with realtors getting to detailed about mortgages... especially when they must qualify the buyer.. this is what I have stated in detail... realtors should not be pre-qualifying buyers and I never even said that you did that.  ps.. you make part of my point. You said.. you even recommend specific loans because you know the details.. your example was about a Well construction loan and that it would cost .5% more to lock in for a year. Programs and pricing change and unless you do these daily, what happens if you tell this to your borrower, yet Wells Fargo changed their pricing and or guidelines?  Then what? Just saying...  because you won't get these changes asap...


Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 10 years ago

Disclosure is a big one! As a listing agent or seller, if you are aware of key facts or issues with your listing/property you must disclose! Its a shame the banks don't do this on REO's!

Posted by Ryan Case, 877-828-0710 (SCA Real Estate) almost 10 years ago
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Posted by zkepspm over 9 years ago

If there's a serious problem with the file I want the LO to tell me asap. I don't want to have to chase the LO to find out why the file isn't hitting its milestones. Buyers and sellers need to know what's going on with their transaction so they can plan accordingly. 


Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) over 3 years ago