Reply to Ethical obligation: should company verify employment for mortgage if employee will be laid off in near future?

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Reply to "Ethical obligation: should company verify employment for mortgage if employee will be laid off in near future?"

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[quote=Anonymous][quote=Anonymous]Let's say a person is in contract to buy a home, they are excited and ready get a mortgage.

Part of the mortgage process is for the lender to confirm employment. This typically happens twice - once during the initial underwriting and then again just prior to closing.

Let's say that a company intends to lay off or fire the employee in the next few months, but the employee is unaware of this. What is the ethical and legal obligation of the company to the employee and the lender?

If the employee knew he was losing his job, he would likely hold back on buying the home. Purchasing a new home and then subsequently losing your job put you at a high risk of foreclosure and potentially losing your downpayment equity.

Has anyone ever run into a similar situation? What usually happens?

If I was the employee, I would want to know so I could pull out of the deal and conserve my downpayment monies. [/quote] the ethical thing to do would be to tell the employee he will be let go in x date.[/quote]

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