AFFILIATED BUSINESS ARRANGEMENTS AND THE CFPB
The cfpb is taking issue with another real estate company's affiliated business arrangement with a title company. I've done a few blogs about one stop shopping. The cfpb is paying attention now to whether home buyers are being fully advised as to their options.
Some lenders have contracts pre-printed that the buyer selects the title company or lender that is owned in part or fully by the real estate company. The cfpb is questioning whether home buyers were aware of options or of the connection between the entities.
Whereas affiliated business arrangements have been around for quite a long time, particularly with builders, there is new focus on how well they serve the home buyer.
I have had several conversations with real estate agents who declare their broker insists they send home buyers to their in house lender or title company. Often they declare that they don't necessarily do so because they don't get the best service.
My experience is that home buyers have no idea what the title company does or that they have choices. I have never had a real estate agent come back and demand the home buyer honor the selection they made. I think that would be difficult to enforce simply because the buyer probably had a million things on their mind besides that one sentence.
I would love to see consumers have free will to make choices and live with the consequences only because it better reflects a free market. They should have some recourse when they have been swindled. The cfpb may be onto something, however; while writing a purchase contract there are enough choices to make without including title and insurance. Once they are under contract there is plenty of time to explore financing, title and insurance.
Comments (0)Subscribe to CommentsComment