Q: It seems to us that our mortgage broker violated our privacy. Our mortgage broker was friends with our real estate agent, who was acting as a dual agent in this purchase, and numerous times she provided him with information that he did not need to know and might have been detrimental to us.
She told our real estate agent how much of a loan we were pre-approved for, before we told him. She informed him of how much our house appraised for before she even told us. And she told him we had the clear to close without even bothering to inform us at all.
I had at one point explicitly asked her to stop sharing information, and that such information should go through me. But she said she was permitted to do so because it was necessary for her to get the loan to go through. This seems false. She could have told me, and I could have told our agent.
Am I right to be angry here? Or is this just how it’s done?
A: You absolutely have the right to be upset. You hired the mortgage broker to assist you and have the right to have your financial information stay private and pass through you alone.
But there are two types of information disclosure at issue here. First, your personal financial information cannot and should not be disclosed by your mortgage broker nor should your mortgage broker discuss any of your personal financial information with anybody but you.
The information you say was given out by your mortgage broker may not fall into the classification of personal financial information. Having said that, you do have the right to hire a mortgage broker and set restrictions on the information that person may give out.
You should know that most mortgage brokers will give out limited information about a transaction to settlement agents, title companies, real estate brokers and attorneys when these people are part of the transaction. The must give out information to these people to set up times for appraisals, coordinate the settlement of the transaction and obtain information about the property or condominium or townhome associations.
When you ask if that’s the way it’s done, the answer is yes. While you should have been the first to know that your loan was approved and ready to close and how much money your new home appraised at, there are times in the course of a transaction where the real estate broker or attorney might call the mortgage broker and get this information before you.
I’m not sure how you have been harmed by the disclosure of this information. In the future, if you want to keep information about your transaction as private as possible, make sure you work with a mortgage lender you have found on your own and then make it clear that all information about your transaction (other than information must be disclosed to the settlement agent for the closing) should go through you.