The Bank's Role in Real Estate - Massachusetts Blog

By
Real Estate Agent with The Buyers' Counsel

money houseIt has been a recurring issue over the years that banks have expressed a desire to enter into the selling side of the real estate transaction.  Some banks have actually sought out the opportunity to own real estate brokerages.

For obvious reasons, the National Association of Realtors has been opposed to this idea and has petitioned the government to block banks from doing so.  Part of their reasoning is that the division of responsibility in the real estate industry makes all parties more accountable. 

Arguments - Pro and Con

 The American Bankers Association has contended that the public would benefit from access to greater choice and a healthier competition.  On the other hand, realtors have argued that consumers would ultimately lose in this proposition with fewer choices, higher loan fees and reduced customer service.

Also at issue is the fact that banks are meant to be neutral parties, lending money without bias, and their involvement in the selling part of real estate would remove that impartiality.  

Pending Legislation

Both houses of Congress have subsequently sided with the real estate industry this week on this matter with the reintroduction of the Community Choice in Real Estate Act.  Over a dozen U. S. Senators and more than 245 members of the House of Representatives have signed onto the bill. 

Since 2003 there has been language included in annual appropriations bills which has temporarily blocked banks from having the power to own and operate local real estate brokerages.  The passage of the Community Choice Act will make this prohibition permanent.  

Senator Barbara Boxer, who introduced the legislation, stated that, "Permitting banks to engage in commerce could compromise their lending decisions and create conflicts of interest while restricting consumer choice and competition among mortgage lenders."  

It seems clear, at the least for the present, that there is strong sentiment among consumers, community advocates and the legislature that the business of selling real estate should remain with real estate agents and stay out of the hands of banks. 

 Copyright 2009 - Claudette Millette, President, TheBuyersCounsel -  800-392-1446, E-mail    

Learn More about Massachusetts Home Buyer Representation - Greater Boston and MetroWest Massachusetts -  Serving Massachusetts Home Buyers Since 1992 

  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough 

   

Posted by

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
Massachusetts
Groups:
Rainmaking - Internet Marketing Strategies
The Lounge at Active Rain
"Whacked"!!!
Club Chaos
Addicted to Active Rain
Tags:
banks
community choice in real estate act
banking legislation
claudette millette

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
184,166
Wanda Thomas
Montana Homestead Brokers, Broker, CRS, GRI, SFR, RN - Billings, MT
Billings Montana Real Estate

Some of the choices banks have made have definitely not helped the public.  I wonder what type of "agency" the public would be entitled to for service and fiduciary duty?  Maybe the banks and their wall street "critical product thinkers" should develop their own Code of Ethics Tribunal first.

Feb 04, 2009 01:58 PM #1
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
403,659

Claudette Millette

Buyer, Broker - Metrowest Mass
Ask me a question
*
*
*
*
Spam prevention

Additional Information