Ethics in the Mortgage Industry

Not many Florida residents have the funds to purchase a home with cash. It could take a lifetime or longer to save up the hundreds of thousands needed to buy a house.

Because of this, most prospective homeowners turn to mortgage lenders. Mortgage lenders are required to be licensed to show that they understand the laws and ethics involved in the mortgage industry. Clients rely on mortgage lenders to treat them fairly, but it is easy for lenders to take advantage of them.

Unauthorized fees, high rates and bribes are just some of the ethical issues found in the mortgage industry. Those who violate the law or take advantage of a client can face administrative issues such as license suspension and revocation.

Types of Unethical Issues

A mortgage lender could face administrative action for engaging in the following:

• Receiving inappropriate financial benefit. This occurs when a mortgage lender charges unauthorized fees or charges a higher than normal rate for a mortgage in order to make a profit.
• Conflicts of interest. This involves tactics that show favoritism toward a certain customer or bank. For example, having a family member as a client can be considered a conflict of interest.
• This involves receiving gifts or money in exchange for certain benefits.
• Giving legal advice. Mortgage lenders are not lawyers or real estate agents. While these industries sometimes overlap, a mortgage lender has to be careful not to give legal advice or complete a purchase agreement. They must not take on tasks which they are not skilled to perform.
• Sharing personal information. Mortgage lenders have access to clients’ bank information, Social Security numbers and other personal information. Sharing this information needlessly with others is unethical.

Avoiding Unethical Issues

While staying ethical in the mortgage industry may seem like a challenging task, it’s really not that hard. To hold onto your license, remember these key points:

• Be honest. Don’t lie to a client to get them to sign a contract.
• Give full disclosure. Clearly state that the terms of the loan can change.
• Treat everyone equally. Do not discriminate or favor one client over another based on race, gender, disability, religion or sexual orientation. Refrain from prejudice and bias.
• Don’t take advantage of clients. Don’t try to pull a fast one by upping a mortgage rate or charging an unnecessary fee.
• Keep good documentation. Make sure you keep copies of all documentation from clients in case it is needed for review or evidence in a legal case.

Keep Your License With Help From a Tampa Mortgage Lenders Licensing Lawyer

Sometimes mortgage lenders purposely engage in unprofessional acts in order to profit. Others are faced with difficult situations and try to resolve them on their own, but end up making the wrong decisions. These decisions can create conflicts with customers.

If you are a mortgage lender facing administrative issues, don’t ignore them or handle them on your own. Seek legal help from The Law Offices of David P. Rankin, P.A. David P. Rankin has several decades of experience helping Florida mortgage lenders and other licensed professionals keep their licenses. To schedule a consultation, fill out the online form or call (813) 968-6633.