Lawsuit or not??? Privacy Act I believe?

Question

I am or was in the process of buying a house through a local bank. They told me what I needed to do with the $25,000 equity I had in my previous home to be able to purchase this one. I did it all exactly how it was needed according to the bank. Now, 2 days prior to closing the PMI or mortgage insurance came back at $600/mo almost, raising the payment by 25% and thus not affordable for us. After talking to a few more banks and not telling them the situation, they all told the PMI would be high in the beginning but this bank did not. Now, the builder or contractor of my new home has stock in the bank that he/she reffered me to and the loan officer has discussed our case with he/she in detail and revealed all of our previous problems to them. It's just very frustrating, this would be a new town for us and now word has gotten out about our problems and I know it wasn't us talking. This bank has upset us deeply. What can we do? Sue for Damages or Privacy Act or anything???

HELP!
Thanks

I do know of one other case that has happened with the same loan officer but while s/he was just a clerk. S/he told several people about the activities in his account. I guess that is good for the case because s/he was at that time, 1-2 years ago, confronted by the bank president and stated that Joe, my friend "just didn't his business discussed." Well no crap, that's one thing I would depend on from a bank...privacy.
As far as the house goes, I talked to another bank and got it swapped to FHA and got it done...or so it seems. Closing in 2 weeks. So I actually would not be interested in making the bank honor the offer or terms 2 days prior to closing now. But we still have $25,000 worth of stuff that we were told HAD to be pd off but didn't thru FHA and the whole town knowing our business better than we do.
Also, no scene was made at the bank. It was all done by phone and all docs were by fax 288.

And nothing said any info would be disclosed to the builder. Just the PreApp.

Answer 1

most banks will have a a clause somewhere saying their quotes etc are indicative and subject to change. So they are covered on that one. And you will need to prove that a breach of confidence occured, probably by one of the parties admitting it.

In my country (New Zealand) there is a Banking Ombudman to go to, which is free for the consumer. Do you have something similar to this? Find out, as the ombudsman can still insist on reparations to you. I'm not sure what the reparations would be for in this case though, as you lost no money.

Maybe see a lawyer. The initial meeting will give you an idea of whether to proceed or not.

Answer 2

PMI of 600 per month, that seems very high. Also, why was a major piece of new info so close to closing. I think you need to go to another bank or better yet a mortgage broker. They may be able to put you into a piggy-back second mortgage and avoid PMI all together.

Regarding the privacy. Review your paperwork, maybe they disclosed they will share information with the builder. But then again maybe that is letter of approval, ie this person is approved to borrow $X for the next 120 days. Basically letting the builder know you are approved for financing.
I don't think has anything to do with the investment deal, it sounds like the lender is just giving info to the builder. Which I can see how that would happen as the builder wants to know if the buyer will be able to close the deal.
I can see why you are upset, but I would not assume the builder has discussed this with anyone else. They deal with these things every day.
Write a short note to the compliance officer of the bank. You want to have a meeting with the compliance officer, loan officer and the builder. You want confirmantion that no further disclosures will be made. Also you want the deal that existed 2 days before your scheduled closing to be honored.
You might also want to consult an attorney. If the attorney writes the letter it will go to the banks leagal office and you might get more of a response. So it your privacy rights may have been broken. But at this time I am not sure of our damages.
Good luck

Answer 3

Coming from a legal background, how exactly are you going to sue the bank for emotional damages under your Privacy Act? How can you sue them in civil court for slander or defamation at all? You don't have proof that the bank has leaked out your information. A number of things can leak it out: your partner could've told someone s/he thought could be trusted; you were making a scene in the bank without realizing it; you lost some papers and some nosy person found it; a whole slew of things that the highly paid defense attorneys who work for the bank can argue against. I'm not even a lawyer, just some punk kid with a law degree, and I can already poke holes in your argument.

Also, another thought came to me. If you can hire a lawyer and sue, then why can you take the money to make your mortgage payments for your house? A lawyer costs about the same per month as your new payments, if not, more.

Answer 4

First, see an attorney. I believe there is a conflict of interest here but I don't know what can be done about it. It also seems that your privacy has been violated.

I would inform the bank president of what has occured. I do not believe the loan officer had any right to discuss your financial situation with the contractor nor did he have the right to ask.
The more I think about this the more wrong it feels and that makes me believe you do have some kind of suit here.
Get the attorney's opinion about this though.