True Gotham

I'm still on vacation but dabbling on the computer this AM as the rain continues to come down...the kids and I did have a nice swim in the rain though.  Anyway, I just received this email from a TrueGotham reader specificaly asking if i would post it so here it is:

Dear True Gotham,
I had a really intriguing encounter with an NYC broker recently, and I have a few questions that I would like to bounce by the NYC scene.

Recently, I was working with a broker to purchase a CO-OP. The CO-OP exists in one of the few areas of Manhattan that you can still find a reasonable deal. The unit was a 1 Bedroom being sold for the same price as other one bedroom units in the building.

While we were working with the broker to prepare the application, there were a few instances where we submitted it, and the boards screener bounced it back to us. One of these instances was due to the fact that I am a small business owner, so –she wanted to see a letter from a CPA stating my current years salary.

After all of this, we ended up losing the place. "Word on the street" was that the board did not find us financially fit, which doesn't make any sense since we were able to put 20% down, have some money left over in our bank account and our combined income on a yearly basis exceeds 50% of the cost of the unit. … Whatever. It wasn't meant to be.

The wife and I were lucky enough to find a better place, for less money less than two weeks later. I contacted the broker from the first place and kindly requested that all of my paperwork be returned to me so I could repurpose it for my new application. I got the paperwork 24 hours later.

This is where things got a little strange. In addition to all of my paperwork I found something odd. I found a copy of the letter that my CPA put together stating my 2007 salary and bonus had the company logo, company name, and my name blanked out.

My CPA and I confronted the broker, only to receive a response of "I don't know why this was done, I really don't remember. But I ASSURE YOU that it was done in your best interest."

Our lawyers are now drafting all sorts of legal documents to just receive legal assurance that the CPA's signature will not be used for any reason at all by anyone within the company.

I could imagine plenty of illicit reasons why this could have been done…. A nice salary… a CPA's signature That's the easy part.

Can anyone come up with any LEGITIMATE reason that this could be done?

Has anyone else had a similar experience?

I think it's a bit odd that the CPA letter was tampered with either before or after submission to the Co-op Board.  As far as a LEGITIMATE reason for this being done, I would supect their could only be one.  Assuming the letter was very well written, it is not atypical for a real estate agent to white out the names, signature, and letterhead only to provide the letter as a sample letter for future buyers.  Perhaps this agent indeed made this letter part of his "sample package" for his future clients and didn't keep an original copy.  When you asked for your paperwork he provided what he had? 

Any TG readers have any experiences or advice?

Interesting. I guess I could believe the sample letter bit, but leaving the CPA name and signature on?

I missed that very important piece of the story. My oversight. Very bizarre indeed and the agent's response that it was done in your best interest is equally bizarre. I'm curious to hear why you suspect it was done?

the company deals with an area of manhattan that is a bit on the low end side. as I said, one of the last good affordable places. My guess is, they often run into ppl whos finances are ALMOST where they need to be, or thier employment is sketch....

most 1 person companies running out of thier mother's basements might not have the resources to find a CPA that will claim that they make a solid salary, especially if that isnt the case.

WOW!!! I didn't even think of that but it is clearer after your insight that the agent or someone in his office could be using that letter for other buyers. If this is the case, even I'm shocked but unfortunately not terribly surprised that there may be an agent out there who will do whatever necessary to fill his pockets.

This is absolutely outrageous and unacceptable. As someone who has worked as an internal auditor in corporate America - where issues such as document retention and ID theft are big - I'm amazed that RE agents who are trusted with the most personal information just throw this stuff around.

Just one more argument for setting higher professional standards for the industry - because unfortunately not everyone is ethical.

I hope

Ensure that the office manager/president/supervisor of the broker knows about this. Possibly there is a broker ethics board?

is it possible they blanked out your personal info in an attempt to protect your privacy? It's not likely they would recycle the letter for other buyers, any fraud in submitting a coop application would result in the coop revoking the proprietary lease, if discovered. Perhaps the broker thought the letter was a good one and had made a blanked out copy (without your personal info showing) which they could give out to future buyers as an example of what a good cpa letter should look like?

Sleepy, we covered that possibility and they didn't blank out the accountants name, signature or letterhead. It doesn't seem copasetic.

I recently asked a broker about their document retention policies. It should be fairly simple to have the broker and anyone reviewing the package to sign a legal agreement stating that how they are using the information. Also, the broker should not be using a prose from a CPA without that CPA's permission.

I was told that board members probably wouldn't want to go through the hassle of signing such an agreement, so I am not sure if I'm going to continue with that opportunity.

SOX, that's a solid idea but I doubt an unethical agent would care that they signed anything. They would have to be caught. Also a good point about using letters without permission. I wonder what the legal ramifications of that are if names and associations are ommitted?

I am a member of my coop board and we request that the managing agent (who is the one who the broker gives the board package to) black out all the social security numbers, bank account numbers, and similar information. Its done to protect the applicant in case a board package (worst case scenario) goes missing or is not disposed of properly. It could be a similar request from the board mentioned above.