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GMAC survey reveals low consumer knowledge about credit ratings

National Mortgage Professional
Jan 25, 2006

Study finds real estate agent-lender partnerships yield lackluster profitsMortgagePress.comReal estate agents,lenders While many mortgage lenders have established strategic partnerships with real estate brokerage firms in recent years, such ventures aren't generating much mortgage origination business for the sponsors. This is one of the principal findings of a new Campbell Communications survey of real estate agents and brokers. The study indicates that the mortgage capture rates of most real estate firm-lender partnerships are surprisingly low. The second annual nationwide survey of agents and brokers by Campbell Communications, a Washington, D.C. marketing and research firm, drew more than 1,700 responses when it was conducted in May. The study was sponsored by Inside Mortgage Finance, a mortgage industry newsletter. "Despite the substantial access advantages enjoyed by partnered lenders who place loan officers in real estate brokerage offices, we estimate that the capture rates for most mortgage provider partnerships is only between 19 and 29 percent," reported Tom Popik, a principal at Geosegment Systems, who designed the survey. "These capture rates are virtually the same, regardless of whether the mortgage partner has special access, such as a loan officer located in the real estate office and attendance at internal company meetings." The new report, "How Real Estate Agents View Relationships with Mortgage Providers," reveals that real estate agents appear to be losing influence--albeit slowly--with home purchasers on whom they select as a mortgage lender. In fact, the statistics generated by the survey indicate that real estate agents currently control or influence the choice of mortgage provider in less than 40 percent of home purchase transactions. Some of the most noteworthy findings in the new study relate to real estate firm/lender partnerships and how these ventures are structured. For example, a very healthy 63 percent of responding real estate agents said their firms partnered with one or more mortgage providers. But at least 16 percent of these arrangements were classified as informal. Of the real estate firms involved with partnerships, 71 percent reported the arrangement was exclusive with just one mortgage provider. The balance involved partnerships with two or more mortgage providers. One of the most surprising findings of the new survey was that relatively few real estate agents with mortgage partnerships--even those with exclusive arrangements--recommend just one lender to home purchasers. At firms with exclusive partnerships, 78 percent of responding real estate agents said they recommended multiple mortgage providers to homebuyers. When the survey delved deeper, real estate agents indicated that a mortgage partnership was not a primary consideration in recommending a mortgage lender. Rather, things like "good service" and "dependable with closing dates" were among the most important factors cited by agents when it came to recommending a mortgage provider. Notably, "partnership with my firm" received one of the lowest ratings of the 24 factors covered in the survey. For information on how to obtain the full report, contact John Campbell at (202) 363-2069 or e-mail [email protected]
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