Fiduciary Duty?

[Secret!]

... from our April newsletter ....


Fiduciary Duty?

Does your State licensing regulations say you have a "Fiduciary Duty" to your customers? Or does it say "you must provide the consumer with a reasonable, tangible net benefit" from a loan you provide? Both of these may soon be nationally mandated requirements if Congress has anything to say about it.

The House of Representatives pulled no punches on Tuesday at its hearing on subprime and predatory mortgage lending as they took National Association of Mortgage Brokers President Harry Dinham to task on the subject of who brokers really work for, if they deny 'fiduciary responsibility' to their borrowers.

Although violating either of those standards may subject you to harsh discipline and potentially aggressive punishment, it is the presence of Ethics & Integrity which will carry you through a life long career in our fine industry.

I'm sure you've heard many times lately that it’s a short walk from unethical actions to full-blown fraud - but more importantly, are your actions ethical when it comes to serving a customer?

Here's a couple of mental questions to ask yourself: If you have strong Ethics, do you understand it means how you behave when no one is watching? - because that's exactly what it means! Do you RAT OUT a fellow loan provider when you see he/she isn't acting ethically? Do you realize you ARE your brother's keeper in this industry ... what the 'next guy' does can make us all bleed! This last 'cycle' (1998 to 2007) brought us many long term problems (only now becoming apparent) - 99% of which be brought on ourselves ... by going along with the crowd.

[Mac]

Very good stuff Secret!, I agree with the majority of it.

"My Brother's Keeper" is a tough thing to actually do. In my opinion. At least realistically.

Many times we "hear" of what a certain broker or L/O is doing but never see actual proof. I'm speaking as if I were a fellow L/O or broker in that part.

Something we could possibly see and the individual states or RESPA maybe would be willing to put up a site sort of like
MARI Mortgage Loan Real Estate Fraud Identity Verification has where BROKERS and L/Os could log SARs (Suspicious Activity Reports) and really be their brother's keeper.

Much of the problem I see with having something like that is that it could easily be abused by competing brokers or some childish L/O if it wasn't properly moderated.

Just my $00.02

I could be wrong....

[Secret!]

Your virw that that could easily abused by mean-spirited childish people, I totally agree with mac, but this is a good idea.

Far as 'brother's keeper' I'll tell you that story (when we next speak) and how it effected me as a newbie when I learned that lesson ... point being ... do all you can to influence the next guy to do the right thing could be a translation of what I mean ... but also that means RAT THEM OUT and don't 'wink wink' when you think you see unethical or illegal things!

[Mac]

Well, personally, I like the SAR website idea.

Secret! the problem I see/have with the "RAT THEM OUT" philosophy is there usually isn't any real physical proof of wrong doings done by one L/O in the other L/O's hands and when it comes to someone's livelihood AND fraud, I think proof is a "must have".

Also, without "physical proof" the loan officers will start looking like the boy that cried "wolf!" and the ____<insert favorite mortgage authorities figure here will grow tired of the calls, lose interest and fail to respond.

Again, just my 2 pennies...

[goodcredit4U]

You could call it the SARI website. People will be real sorry to be listed on it