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I’m sure many would agree that the residential mortgage industry is now one of the most regulated industries on the planet. We all know of the good and bad changes along with unintended consequences, etc. What I cannot stand is seeing some lenders penalized and fined for unintentional issues with minor consumer impact, while others are ignored and get away with the most harmful consumer-impacting actions and behaviors in the industry. While most of the bad players in the mortgage industry are gone, what about the ignored real estate industry?
I can say this with a high level of confidence … real estate companies and the agents who work for them are significantly under regulated. I believe real estate agents have little to no performance standards primarily due to the lack of accountability for their actions. Many real estate agents I see in my market are self-focused and not client-focused, arrogant and egotistical with emotional actions causing significant problems in real estate transactions. Listen, there are some great agents out there, but they seem to be in the minority from what I hear in most markets.
Good real estate agents also agree with these statements as they deal with bad real estate colleagues daily. Bad agents have no respect for the (most important) mortgage process and ignorant to it, yet claim to know it all. Here are the consistent issues I personally see from bad real estate agents that interfere with the homebuying process:
►Discrimination (against veterans and other protected consumers)
►Fraud and manipulation
►RESPA Section 8 kick-back violations (a huge problem on both sides)
►Conflict of interest
►False and misleading advertising and practices
►Lying and deception
►Unethical client pressure and steering, and the list goes on …
I am really not trying to be negative and I know there are bad players in the mortgage space as well, but I believe our regulation is clear and accountability is aggressive if violations do occur. I believe that for whatever reason, the real estate industry has been able to influence policymakers and regulators to turn a blind eye on their actions and compensation. The sad reality is that the consumer is harmed by these negative actions when interacting with these unprofessional and unethical people.
What are your thoughts? Is it just my markets that I’m experiencing this? How do we improve honesty, integrity and accountability in the real estate market from both agents and loan officers? How do we help the best agents weed out these bad ones and rise to the top? I cannot help but share this topic for discussion from all the stories I hear from colleagues across the nation.
Are you an originator? Send your stories! To have topics considered in future editions, please e-mail me with “OrigiNation” in the Subject Line at [email protected] These can be confidential or your name and company can be referenced if you wish. You can also join the Facebook Group by searching for “OrigiNation.”
Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail [email protected] or visit VantageMortgageGroup.com.
This article originally appeared in the June 2016 print edition of National Mortgage Professional Magazine.