NAR Against Banks Owning Real Estate Brokerages

On one level it's no surprise that the National Association of Realtors is against banks owning real estate brokerages, and on the other hand what does the organization itself stand to lose?

Their bullet points are:

1. The same large-scale consolidation that has taken place in the banking industry itself would likely occur in the real estate business.
Fewer entities conducting real estate brokerage would mean less competition. The result: fewer choices and higher costs for consumers.
2. An additional effect of the proposed regulations would be pressure on bank-affiliated real estate brokers and agents to market and sell other financial products such as insurance, securities and credit cards.
3. Banks could share private consumer data obtained in real estate transactions with their affiliates and other third parties business entities.
4. Banking conglomerates would have unfair competitive advantages. These financial institutions that could operate real estate brokerages under the proposed regulations would benefit from access to capital at lower rates – thanks to federally insured deposits. That benefit is not available to local real estate companies.
5. According to a J.D. Power survey, 28 percent of home buyers had problems with their lenders. Those problems included errors in closing documents, miscommunication of loan terms and unavailable or unresponsive loan consultants or mortgage brokers. That means almost one in three home buyers did not get adequate customer service just during the loan process. How will they be better served by banks during the much more complex process of buying or selling a home?

Of course, it piques me to read #5 on their list. I'm not saying it's not correct, it just always bothers me that lenders aren't doing their jobs to the best of their capabilities.

As a Mortgage Broker who doesn't work for a huge company and works hard to compete in the marketplace, I agree that banks owning real estate companies is a mess. However, there has been an erosion of the seperation of banking institutions and commercial activity for some time (thanks to Sandy Weill & Citigroup when they purchased Traveler's Insurance) and it looks like it's going to continue.

I love the independents. And thankfully here in New York's wacky real estate market there seems to be some room for them...for now.

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