The XBroker: NAR Dipping Into The Mortgage Pool?

NAR Dipping Into The Mortgage Pool?

Realtors Federal Credit Union

Jay Thompson wrote about the NAR's foray into the world of controlled finances over a year ago...Eric Stegemann brought the topic up while at RE BarCamp-Phoenix, indicating it was his understanding that after a few delays, its a go. Fascinating implications. 

The largest trade organization in the United States, with all its lobbyist power, is for all practical purposes a lender.  Yes, yes, NAR and the Realtors (INSERT COPYRIGHT SYMBOL HERE) Federal Credit Union (RFCU) are separate and apart in all the right places but I love the messaging coming off the article on realtor.org:

Because operations will be on the Internet, REALTORS® FCU will be sensitive to the work habits and lifestyles of REALTORS®, most of whom are independent contractors who are compensated by commissions.”

All REALTORS® and their families are eligible to become REALTORS® FCU  members. REALTORS® employees and staff, including NAR, state and local boards and associations, and NAR’s institutes, societies and councils are also eligible. REALTOR® clients and customers, such and home buyers and home sellers, are not eligible.

Whats clear:

A year ago, pre-credit crisis, this was a borderline *yawn*, today its stands to be a pretty big deal.  Access to a credit union is a real benefit, yielding -->credit<-- to its members using  their own underwriting guidelines, separate and apart from Big Bank or gov't regulated programs. 

Mortgages for those of self-employed and commission based income ilk don't (really) exist in the mainstream anymore.  My opinion, which isn't usually positive when it comes to NAR's moves is just that, positive.  RFCU stands to provide real benefits to the member contingency, substantiating the dues to be a Realtor (INSERT COPYRIGHT SYMBOL HERE).  

Whats speculation:

Right now, clients and consumers are not eligible as the RFCU is careful to not trip the line hypocritic with their hard stance against banks getting into the real estate sales industry.  But I can only wonder how 'Americas Largest Trade Orgaization' might choose to flex their lobbyist muscles in the future? NAR can actually compete with Big Bank lobbyists on Capitol Hill.

If the banks won't lend in a common sensical fashion (a common theory), then consumers can't buy...if consumers cant buy, then Realtors can't pay NARs dues...NAR loses income and voices...

Does this 'force' NAR's hands to get in the mortgage game?  The argument is compelling and someone needs to check the Big Banks actions.  The irony of NAR, recently accused of anti-competitive practices by the Dept of Justice, chipping away at The Banks increasing monopolistic nature would be great theater.  

Do they push to allow clients access to RFCU mortgages?  Now that's a neatly marketable reason of solid tangible value to use a Realtor (INSERT COPYRIGHT SYMBOL HERE). 

 

 

 

(I know health benefits are important too...thats another subject for another day...)

Comment balloon 48 commentsJeff Corbett • May 02 2009 11:25PM

Comments

Am I to run and sign up now?   I'm still wondering what all these dues are for. Oh, I know...commercials where the lady says, get a REAL TORE

Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) over 10 years ago

First let me say I love Sally's take on the spending of our dues.  Secondly I always know to look when Jeff writes a blog.  So are all the transactions and everything going to be online.  I mean where are they going to have a office at.  You know the little local credit union office.

Posted by Larry Story, Total Care Realty, LLC, Greensboro, NC Real Estate (Total Care Realty) over 10 years ago

I'm sure that the convention in DC in a couple of weeks will have quite a bit of hype about the Credit Union.

Posted by Terry & Bonnie Westbrook, Westbrook Realty - Grand Rapids Forest Hills MI Re (Westbrook Realty Broker-Owner) over 10 years ago

Since I question the way that NAR handles our dues, I'm very skeptical about the way they would handle any deposits.I won't be rushing to be first in line for an account.

Don't mind me, I'm still all burned up about the Rose Parade float.

Posted by Elaine Hanson, REALTOR - Topanga, CA Real Estate Agent (Compass) over 10 years ago

I like the idea of NAR getting into the mortgage arena, but just your title made me think they're playing with far. My thoughts are split. Yes, our lobbyists will also be in with the banking lobbyists, thus causing confusion in that camp. But it can also go the opposite direction, and give banks the fuel they need to get dip into our pockets. I know I can't afford that!

Posted by Lisa Hill, Daytona Beach Real Estate (Florida Property Experts) over 10 years ago

As long as RFCU stays with doing businss with Realtors I am fine. What RFCU should focus on is to provide secured loans against accounts receivables so that Realtors can have continuity in their business while they wait for the "paycheck."

The Realtor network does a great job of inflating real estate prices as it is. Price Fixing of a Different Kind?

If RFCU tried to venture into serving buyers and sellers, we will have MEGA conflict of interest issues. Talk about fudging lending guidelines to move properties. Thus helping sellers inflate prices.

Banks should stay out of the real estate brokerage and management business, and NAR should stay out of banking.

Posted by Lee Ali (Las Americas Real Estate) over 10 years ago

I think that it would certainly be problematic in thought if not in actuial deed to have the NAR involved in lending while they whine about banks being involved in selling...

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) over 10 years ago

Jeff

The analyst in me makes me wonder if the ever powerful NAR with their infinite wisdom, and track record of being wrong in all things analytical over the last 5 years at a rate of just under 70%, would think that this would make financial sense. If you think subprime took a while to spring a leak, NAR would become an overnight Titanic.

The banker in me has to sit back and laugh for they do not know what they are getting into.

If the losses begin, will those be thrown back at the membership in the form of increased dues? licensing censure for early payment default? the black listing of real estate brokerages that seem to be repeat offenders at getting people into homes, whether they stay there or not? Oh, the hornets nest they are opening with this one.

This is theater that I simply can't wait to see..........

Posted by Bill Nazur over 10 years ago

Very ineresting Jeff. I had not heard about this. While it would be nice to be bale to get a mortgage these days I'm just not sure I would be comfortable doing it through NAR>

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) over 10 years ago

LOL on Sally. I thought I was the only one that hated her! REAL-TORE LMAO. My banker shakes his head every time I walk in and ask to chat!

Posted by Chip Jefferson (Gibbs Realty and Auction Company) over 10 years ago

Jeff.... I actually talked about the NAR possibly getting into the mortgage business about a year ago. Even though I am not a realtor, yet I follow NAR, their commercials, and the political stances or just their stances on issues in general... and I would predict that the credit union aspect won't go far.

Now, Lee brings up a good point, but this would be expensive for NAR to do, in regards to giving monies to realtors while they wait for their checks to clear. This kind of method even hurts lenders when fronting monies to their employees, as a draw, until the loan funds or they get their check. The money has to be fronted from some where. And that costs money.

In regards to the NAR, if they were to ever take it to the next level and get into the mortgage business.  2 things... I personally would believe that it would fail. Just as Trump got into it and look at what happened to him. On the 2nd note, Lee talks about the NAR fudging underwriting guidelines to move properties. This could only happen and possible work if they were to hold their own money and portfolio everything, without dealing with Fannie Mae or Freddie Mac. And even that would cause them more problems. So overall, I don't see that working, because you would have to hirer experience people from the mortgage industry to get a company like that started. I love a challenge, but I wouldn't try it. I think the big egos with the big names would be lured over to the NAR's mortgage company and I see it still failing then. Overall, interesting times ahead of us, that's for sure.

jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) over 10 years ago

Actually, I think it is a good thing for us.

Finally they do something to help us out.

What the downside?

You said in your post it would only be open for us not clients and consumers.

Credit unions are great. They have a lot of money to lend right now.

 

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) over 10 years ago

Our local Realtor credit union has been great  I share Missy's view.  It's good to have a place where people treat you well. They provide excellent customer service.

Posted by Marzena Melby, Realtor, Twin Cities Minnesota Real Estate (Coldwell Banker Burnet Realty) over 10 years ago

Would you lend money to a Realtor in today's market?  Would you lend money to a Realtor before the closing actually happens?

A bank with only Realtors as customers isn't a bank I would want to invest in.

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) over 10 years ago

Interesting with all of the conflict that has been between being the in the real estate business and being in the banking business.  Yet there are real estate offices owned by credit unions.   It would be strange to go to work for the NAR credit union in a franchise they own, selling real estate.

Posted by 1~Judi Barrett, BS Ed, Integrity Real Estate Services -IDABEL OK (Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745) over 10 years ago

It is great to have a credit union only for reatlors. Now, I do not know if I would lend to them without full documentation and a business plan.

Posted by Katiejo Franks (Real Estate and Beyond, LLC) over 10 years ago

I would be a bit concerned how the lobbyists would be swayed (Lobbyist? Swayed?). IMO you should do what you know best, many a entrepreneur has lost their butt with a forray into the unknown...

Posted by Frank & Jodi Orlando (Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale) over 10 years ago

I read a lot of news inside and outside of real estate, but I have to say this is news to me. Thanks for giving me an overview. I am not sure how I feel about it, but you make me want to delve into this a bit more. I gues when I get the NAR rag in the mail, I shouldn't just focus on the tech sector, and I plan to go to www.realtor.org today.

Posted by Joe Pryor, REALTORĀ® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 10 years ago

The only way this would work, and I'm seconding Jeff's comments above, is if the credit union portfolio'd their own loans. This is relatively rare these days; most credit unions sell their loans just as the lenders do. Also, their underwriting guidelines are often more stringent than the lenders. Case in point; I recently closed two loans our local credit union couldn't do because they took the low credit score on the client's credit report rather than the mid-score most of us use. I'm all for freeing up the present logjam we have. But it's a symptom of the times. Underwriting and lending criteria are tight. I don't see that changing anytime soon. Thanks for the post!

Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) over 10 years ago

Jeff C. ....  Tim Maitski condensed what I was trying to say and I agree with him and many others.

Sure, some have expressed that they would think it would be very good for realtors, because they like their current federal credit unions and that some have lots of money to lend. Three things on that....

1.  Federal Credit Unions are owned by it's members.

2.  They usualy have less assets than banks.

3.  Credit Unions are built "not for profit".  So with that in mind, and people complaining about the NAR and its dues, that what do they get for those dues, what do you think would take place if the NAR started up these credit unions? 

Overall, you have a company getting into a business that they have no experience at all with.  Many complain about poor customer service in businesses that are established, what do you think it would be like with something new??? 

Just food for thought.

jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) over 10 years ago

I think this is all part of a plan for the NAR to get TARP funds now that they may be considered a bank holding company. ;)

Posted by Mark MacKenzie over 10 years ago

Some great comments here. It would be an "interesting" bank that lends to mainly RealTORE's (haha Sally and Laura). I initially thought it a great idea since they would know the pay model, then realized a large % of realtors don't make enough to warrant a loan. As Erica states, with a solid track record, I think most banks will lend a Realtor anyway.

Posted by Stephen Kappre, Helping You Home (KW Hometown) over 10 years ago

Hi Jeff,  You're right.  This could be a big shift in the way our trade association provides tangible benefits.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) over 10 years ago

Just imagine... NAR doing something practical to help the members.  What a concept!  (I like it.)

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) over 10 years ago

I was unaware of this as well, and I consider myself pretty well informed! :)

Not sure if this is a great idea or not, as I would like to see more money flowing into education/higher standards to improve the reputation that Realtors have with the general public.

If anything, this blog post/comment section clearly shows that the membership is not pleased with what NAR has been doing, and I feel it is time NAR start taking that more seriously.

If we can not believe in NAR, how can we expect the public to believe in us?

- Harrison

Posted by Harrison Painter, New Media Consultant (GoGladiator Media) over 10 years ago

There was talk about the Credit Union at the NAR Conference last year in Floriday.  I expect it to be formally "launched" at the Mid-Year Governance meeting next week in Washington, DC.

I don't believe they are looking to be a commission advance company as referenced above, although for members that have high enough credit scores and assets, they might do this as a kind of "signature loan" like my credit union would do through Capital Educators Fed. Credit Union.

Lending to Realtor's with high enough credit scores is no different than lending to teachers that are unemployed 3 months out of the year.  You either know how to manage your finances and your credit or you don't.

Posted by Jim Paulson, Owner,Broker (Progressive Realty (Boise Idaho) www.Progressive-Realty.info) over 10 years ago

I forgot to mention that this new credit union is going to be a "virtual" credit union.  They will do nearly everything via the internet with online deposits and bill pay.  They will not have the overhead of traditional banks!

It won't be for everyone since you can't walk in and have a cup of coffee and discuss your kids school activities in the lobby; however, for those of us that already are used to an online world, it will be great!

I know when I set up Progressive Realty Corporation last year, I looked at doing a traditional real estate franchise but saw absolutely no value in setting up a class A office building as required by most franchises when most offices sit vacant outside of meeting days and new agents.

I will probably be one of the early adopters of this and hope they will work through the ability to handle my trust account online, since the two major banks I worked with couldn't help me do this online due to requirements for a physicall "paper" not "electroncic" trail.

I will post a blog with more details from the Mid Year meeting in DC as I learn more.

Posted by Jim Paulson, Owner,Broker (Progressive Realty (Boise Idaho) www.Progressive-Realty.info) over 10 years ago

Hmmm...why am I suspicious?There must be a method to their madness.

Patricia Aulson/Portsmouth NH Real Estate

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) over 10 years ago

I hadn't heard about this, Jeff -- very interesting.  I guess we'll know more after the conference.

@ Sally -- Thanks for the laugh re:  REAL TORE  :0)

Posted by Kerry Lucasse, Your Urban Nest Atlanta Real Estate Consultant (eXp Realty - Urban Nest Real Estate Group) over 10 years ago

I think the Credit Union is a seperate entity and will not even be ran by NAR. They are just using the name to get the Realtors to buy into it. A lot like Navy Federal, it is not run by the Navy or even the military.

Posted by Charles Stallions, 800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl. (Charles Stallions Real Estate Services ) over 10 years ago

Unfortunately NAR needs to concentrate on its core business.  Realtor.com is fast becoming a has been in the world of real estate websites.

Posted by Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239, Michigan homes for sale ~ yesmyrealtor@gmail.com (Real Estate One) over 10 years ago

I think that RFCU could be a good idea as long as they don't come near mortgages.

As more brokerages head online, we will need a friendlier banking ally.

Posted by Lee Ali (Las Americas Real Estate) over 10 years ago

By the way, I don't get the joke related to REAL TORE. Some people claim that REAL TORE is the correct pronounciation and the others maintain that REAL TER is the correct pronounciation. Am I missing something here?

Posted by Lee Ali (Las Americas Real Estate) over 10 years ago

We have a credit union?  I'm sure I have heard this before, I just never thought of the implications in terms of me buying a home.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) over 10 years ago

I don't get the joke here either, Lee. REALTOR® is a two syllable word, not three. And a quick tip: the ® symbol can easily be inserted by holding down the Alt key and typing 0174 on the numeric keypad (Alt+0174).

Posted by John Novak, Henderson, Las Vegas and Summerlin Real Estate (Keller Williams Realty The Marketplace) over 10 years ago

I wonder if they will have us pay a bunch "extra" to get their PREMIUM MEMBERSHIP like Realtor.com?

Posted by Larry Mennetti over 10 years ago

NAR is smartner than FnMA and other progenitors of the SubPrime mess : )

After all - those other places were run by "BANKERS".  NAR is run by REALTORS ® for REALTORS ® - isn't it ?

They won't go there - when it comes to consumer loans.  I predict they won't go there at all.

Now, If I were in the commission advance business, I would be worried.  NAR can certainly make sure that any commission advances are due and payable at next closing, through getting proper signatures from broker before advancing funds.  I don't worry about them getting paid. : )

Posted by Lonn Dugan over 10 years ago

Jeff, as a "Realadder" I am on the edge of my seat waiting to see what happens at the convention! Keep us informed and I will be closely reading my NAR news!

Posted by Caren Wallace, Portland Caren Real Estate (Premier Property Group LLC) over 10 years ago

Jeff, I heard that this may be a possibility but I didn't realize that it would be coming so soon. I wonder how long it will take for the credit union to lend to other non-Realtors®.

Posted by Home Loan Search.Online (Home Loan Search Online) over 10 years ago

I hadn't heard about this either.  MORE POWER!! ARRR, ARR, ARR!

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) over 10 years ago

If I had a dollar for everytime a Realtor told me that: "lenders should stick to lending and stay out of the real estate business" (i had a fsbo program several years ago)

What is good for the goose?

Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) over 10 years ago

I'll have to join John and Lee:  I don't get the Real Tore joke either.  As English is spoken, we say Re-La-State.....so some people say Re-La-Tor.  Or, maybe they transpose the Realtor to make Relator, Dyslexic? In any event, I think Real Tore is about the correct pronunciation! Or, did I miss something really big here?  Elizabeth

Posted by ELIZABETH VALLANCE (Long and Foster Real Estate Services Inc) over 10 years ago

Certainly interesting but I'm into local banks and credit unions myself..

Posted by Paul Francis, Las Vegas Real Estate Agent - Summerlin Homes (Francis Group Real Estate) over 10 years ago

Wow.  I had no idea. Times sure are changing...quick!

Posted by Andy Rogers, Bellingham, WA - Your Real Estate Advisor For Life! (Exit Realty Associates) over 10 years ago

I will be watching this one very closely to see how this all plays out...

Posted by AMBER NOBLE GARLAND - Top Real Estate Expert, Property Tax Appeal Specialist & Author, - The Agent You Can Trust To Deliver REAL Results! (Strategic Marketing Expert & Relocation Specialist Serving New Jersey and nationwide!) over 10 years ago

Next thing you know, if the NAR does this they will sell quickly sell it to a for profit company like they did Realtor.com and they will find a way to try to capitalize on it. I'm not sure for whose gain these moves the NAR makes but it will certainly not be for the gain of the Realtor's they purport to represent.  The NAR does not care for it's members period. I guess it's only those of us who became Realtors way back when it meant something to be one and back when the NAR seemed to care about it members who understand the joke about Real-Tore in todays market.  With every step the NAR takes they make themselves less and less relevant to their dues paying members and to the real estate profession as a whole.

Posted by Brenda Abide (Weichert Realtors Benchmark) over 10 years ago

It has been 6 years since I had my cable service disconnected.

According to California Association of Realtors studies buyers and sellers have moved to the Internet http://www.car.org/meetings/carmeetings/committee-materials-archive/oct2008committees/spf/2008_Home_Seller_Survey_FIN1.pdf

Check slides 21-25. WOW!!! Craigslist is rocking and rolling. Craigslist DOES NOT cost anything in most MSAs even to Realtors. Can't beat FREE!!!

The cost to market the RealTOR, RealTER, RealWHOCARES brand on the Internet is significantly lower than marketing the same on television. For example, if  it costs $1,000,000 to run a campaign on television, it may cost $100,000 (maybe even less) to do the same on the Internet. And Internet campaign would be more trackable.

What does NAR do with nearly quarter a billion dollars it gets from its 1.3 million members?

Lee

PS: I still can't believe that NAR was/is making money off of Realtors on Realtors.com.

Posted by Lee Ali (Las Americas Real Estate) over 10 years ago

Hi Jeff, Wow. Lots of great comments to peruse. This topic was news to me & I read those NAR newsletter emails. I like a locally owned credit union. In fact, I plan to drop my big bank accts. & move them to a credit union.  I've supported REaltor.com for many years. It is quickly becoming 'yesterday's news'.  By the way. When I became licensed back in 84 I asked how to spell Realtor, then I asked the broker how to correctly pronounce it. The word is 2, not 3 syllables, thus real TOR. No, not reel a ter. Just think of Lipton  ... as in real Tea.... RealTOR!

Posted by Marian Gregor-Ann, Arbor area Real Estate (Keller Williams) over 10 years ago

Participate