Long & Foster CEO's Email To Agents Not Using Prosperity Mortgage. Going too far?

I don't think we're talking about litigation.  I think there is a need to address the intent of RESPA and whether or not ABA's allow for an ethical and legal loophole under the intentions of the original Act.  Clearly RESPA is dead as we once knew it.  

Someone noted that buyers are presented with all the required disclosures.  A few disclosures may make it legal but is it ethical?  Under RESPA a lender can charge excessive points and as long as the borrower signs a high cost loan disclosure, three days prior to close, it's "ok".    They signed the disclosure therefore its ethical?  No.  It may be legal but it isn't right. Today RESPA is an obstacle easily avoided with cumbersome business arrangements that clearly act opposite of its intentions.

Then again, it all depends on what your definition of is is.

Frank,

I think P. Wesley Foster Jr. has a point! many owners feel the same way about their agents doing something like this as well.

I fail to grasp where Mr. Foster`s opinion is wrong.

"He chastised his workers for funding mortgages through Bank of America more than 2,200 times last year and through Wells Fargo instead of using Long & Foster's affiliate, Prosperity Mortgage. This comes at a time when home sales have slowed significantly.

Neither of these companies do anything to support Long & Foster over its competitors, nor does SunTrust, Chevy Chase, or any of the other many lenders in your marketplace," Foster wrote in the e-mail sent Wednesday. In fact Bank of America recommends other companies as their preferred realty firm over each of you right on their own Website."

If this company gave that much business to Bof A, i`d be yelling and screaming as well, and you know what, so would the majority of people here..

"There is only one lender that is solely dedicated to you. Prosperity Mortgage was created and still exists today with the primary purpose of serving you. Many other Real Estate companies will not use Prosperity because they are tied to this Long & Foster name, but that's okay with me. When we started this mortgage company, we created it to serve our agents - each of you."

I may be wrong but isn't the primary goal to serve the client?  This email reminds me of the Bad Idea Jeans ad on Saturday Night Live. 

Actually it's not as bad as the post made it out to be.  Still think ABA's are a joke but that's me.

Frank,

Reading between the lines and cutting to the chase, this line says it all: "This year, Bank of America was used over 2,200 times for mortgages by our agents". Did it ever dawn on anyone that maybe, just maybe in more than a few of those 2200 times, that it was the consumers exerting their rights to choose Bank of America??? Or any other real estate service provider for that matter...so much for 'bungled', errr I mean 'bundled' services! Let's give the consumer credit for doing some things right!!! Thanks,   Fran

wow -  just read the L & F letter......      i have no intentions of playing favorites or stirring anything up other than give my opinion -   which is as  follows...

it seems as if business is down for L & F and they are trying to maximize profits by keeping lending in house. That is all good but the letter to me comes off as a plea. If Prosperity is all that good, it should go without saying that L & F agents would use them. Maybe if the leaders at L & F concentrated on quality employees at Prosperity they could keep those loans with their sister company???  I have yet to meet a L & F agent with anything good to say about Prosperity mortgage consultants.

I also know that if I opened a title company and composed a letter like the one we all have read above, my office would become a mutiny. I think that letter came off more as a plea than anything else.

With all that said, I think what that letter really does is open up more selling opportunities for mortgage companies like mine. Thank you Mr Foster.

I started my career with an ER _(A) franchise. There was considerable pressure to use the inhouse mortgage company whose name started just like ours did. If you had a customer who had a relationship with any other lender, was pre approved with check in hand, it did not matter. The in house lenders agent would be in their face attempting to roll them over into that company. If it was a cash deal, they would take our files and call the customer and attempt to convert them. I thought this was a breach of ethics, privacy, and respa rules. I made it clear that I did not wish to use the lender, and actually ran an ad in a local glossy color magazine with another local mortgage company that had been doing a great job for me.

I got called in for a Private Chat, to which I asked them to please put this conversation in writing and I would forward it on to DPR. Furthermore, I made it clear I did not want any further interference on my deals with the inhouse lender...SO for those who say there is no pressure to use ABA vender's, they are naive. My partner and I quit there and went somewhere else, and our first question was do we have to use a certain lender to get our deals done...Of course not was the reply...We signed up

Frank,

Check out this recent post!!! Thanks,   Fran

Frank...Through the years I have worked for three companies, one a small locally owned company, one a major company and now with a RE/MAX franchise.  None of them have ever asked me to use a particular lender.  I am very thankful because I would have had to move on.

Thanks for posting this.  I wasn't even aware this happens.

Kathleen

Frank, an interesting Prosperity thing happened that I thought I'd share with you.  I spoke with a friend in Maryland very recently who considered buying a condo and wanted my opinion.  She'd submitted an application with Prosperity Mortgage in Olney, MD and when I asked if she'd been dealing with a L&F agent, in a very surprised voice she asked how I knew (hmmmm.....).  I probed her about all that occurred and I can report positively about the agent and negatively about the loan officer.

The agent has a preferred lender (not Prosperity) she provided to my friend.  When my friend couldn't get through, the agent gave the Prosperity LO as a backup.  Now I realize that an agent should provide 3 lenders, nevertheless I won't hold that against this agent as she did provide a primary and secondary choice.

Unfortunately, the loan officer did not perform to the level of the agent.  Due to unfortunate circumstances my friend has a BK from several years ago.  The LO said that she needed to write a letter of explanation.  I informed her that if so, it's not a big deal, just tell why and be forthright about her situation.  She informed me that the LO told her to write some tale about her boyfriend screwing her over and leaving her with all these debts that overwhelmed her, etc.  I'm thinking "WHAT?!!"  Why in the world would she have to lie?  I told her there was  no reason whatsoever to fabricate anything and to always be honest with a mortgage application.  She was so disgusted she decided to rent for another year.  Fortunately for this person she's not reporting him.

Let's get a few things clear:

1.  What is written in this post is true.  

2.  If you see it as self-serving, that's your problem. 

3.  I will use terms like "friend" because I will respect the privacy of an individual until I am given permission to reveal identity I won't.  Given that this person was my next-door neighbor for several years, whom I hung out with, I trust her word more than I would most others.  I urged her to report this incident, however I cannot make her do so.   

4.  There is nothing in the post that speaks negatively of Wes Foster.  If you disagree, then re-read my post.  And keep doing so if you must.  

But you continue to bicker.....

Since you have an apparent problem with comprehension, I will reiterate that it's up to the individual to move forward with that.  Re-read Point #3.

My affiliation with HomeFirst has nothing to do with whether or not someone else in the industry has a less than ethical way of doing business.  But nice try.

I once ordered a laptop that had problems from the outset.  I did not directly or indirectly blame Michael Dell.  I do not believe he was the cause, though using your logic I could argue that he oversees the people who are in charge of manufacturing.  And going down the line someone hired the person who delivered that faulty laptop to me.  So somehow Michael Dell is to blame.  Therefore at the very least this bad apple in Prosperity is somehow Wes Foster's fault.  Thumbs up to you for showing me the light.

Until you log in to post, don't expect a response from me.