Apr 28, 2009

Banks Out of the Real Estate Business

Hello Neighbors,

Wow is this good news for the consumer. For the last several years, the National Association of Realtors has been fighting hard to keep banks out of the real estate business.

That seems self centered, but WOW am I thankful this has come to an end.

All we do now is deal with banks - whether it is on property they now own through foreclosure, or through property they have to be involved with due to a Seller's short sale status.

NOTHING is more painful than dealing with these banks. It's terrible. Point in case - our agent Juli just closed an escrow on a bank owned property yesterday THAT LASTED 7 MONTHS! That's right. This one escrow went 7 months because the banks simply couldn't manage the transaction. They are understaffed and under skilled. It goes against all common sense – but don’t get confused with logic. Banks still don’t have it figured out.

Realtors Gain Victory on Banks in Real Estate

NAR’s 8-year battle to keep national banking conglomerates out of the real estate brokerage and management business ended with a win in March when President Barack Obama signed the 2009 Omnibus Appropriations Act. The legislation permanently prohibits banking regulators from taking any action that would make real estate brokerage and management permissible lines of business for federally regulated banks. “This is a great victory for the real estate industry and consumers,” says NAR President Charles McMillan. If banks had been allowed to engage in real estate brokerage, it would have created anti-competition and anti-consumer concentrations of power within the financial services sector, according to NAR.

I'm all for a free market economy, creating competition, and letting the consumer benefit. BUT banks in real estate? It's been nothing but headache and heartache these past couple of years. Ask my clients who have over a dozen offers out, who have waited and waited for responses from banks / lenders, AND who have lost their own loans just a couple of weeks after getting pre-qualified.

Banks don't understand the real estate transaction. They can't get it done. Keeping them at arms lenght from this business is a win for everyone, especially Buyers.

- Jim



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