REALTOR® Magazine-Daily News-New Law Permanently Keeps Banks Out

REALTOR® Magazine-Daily News-New Law Permanently Keeps Banks Out

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On Wednesday, President Obama signed a law into effect permanently banning banks from entering real estate brokerage & management.

As we're now seeing banks & lenders were all over the recent real estate boom, writing mortgages and packaging them up to sell like commodities. Often with little concern as to the long term issues such as affordability and qualifications.

Banks had for the longest time been trying to get into the real estate brokerage business to capitalize on the real estate bubble. Banks should have been focusing on what their core business is and not exploring how to best exploit the real estate market.

One area of the National Association of Realtors argument that really made sense was that consumers would end up with less choice rather than more. They would be able to incentivize their borrowers to use their mortgage brokers and real estate brokerages. Imagine how few offerings would be available if you suddenly didn't qualify for a certain loan product?

The banks have shown in this crisis that they aren't too big to fail, and their own groupings of corporate associations can be toxic to consumers & our economy at large.

Sometimes I wonder how the national banks would feel if real estate brokerages desired to form a national bank? Would they argue these same points? Banks in my opinion need to really take a look at the way they've been doing business & how to do that job well BEFORE they go looking to explore new business ideas & ventures.

Link to the National Association of Realtors FAQ on this issue http://www.realtor.org/banks_and_commerce.nsf/Pages/banks_permanently_barred_faqs?OpenDocument
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