ONE STOP SHOPPING? OR MORTGAGE STEERING?
I ran into a real estate agent this weekend who has been in the business for about 30 years. She spent most of this time with a small real estate office. In the last year she went over to a big real estate agency in the area. One that promotes"one stop shopping". A buyer buys a home, need a mortgage loan - sure! we can do that, insurance - you bet!, title - well, of course!
Every time I hear they used the real estate company's services for everything, I cringe. It rarely works out for the buyer. I know what is coming.
Steering in real estate can be property related, in the mortgage business it is loan related. To coerce a buyer to use a mortgage company picked by the real estate agent is steering. I would say a real estate agent should tread lightly when it comes to insisting a buyer use their mortgage company.
Getting back to this particular real estate agent, she told me she loves the new bigger company, but that she was called on the carpet recently and told "she had to be a team player". You see, she had not been sending buyers to the agency owned mortgage company. So, trying out the "team player" stance, she sent six potential buyers to the designated loan originator. Two weeks later none of them had been pre qualified, no work had been done on the files. The agent continued to work with the buyers and one of them found a home. She was told "write it"; she did and three days later was told "sorry, the deal does not work".
First of all, this is clearly steering. Up until now she would not have referred this mortgage source, but was coerced into doing so.
Secondly, I wonder while the CFPB is wasting time on making disclosures more difficult and concerning themselves with what the rest of the loan originators get paid, when will they look into the "one stop shopping" to determine if it is steering?
This conversation was pertinent because on Friday another transaction hit my desk where a buyer was sent to the real estate agency owned mortgage company, wrote a contract and then told he could not get a loan.
I'm not going to say never, but I've not seen where one stop shopping benefits a buyer. My experience is that overwhelmingly it is harmful.
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