Printer Friendly

CLO SYSTEMS: THE FUTURE FOR RESIDENTIAL BROKERAGE, NAR TESTIFIES

 WASHINGTON, July 1 /PRNewswire/ -- The provision of multiple services by real estate companies, including matching a buyer with a mortgage to complete a sale, represents the future for residential brokerage, according to a representative of the National Association of Realtors.
 Technological innovations in home buying, including the expansion of computerized loan origination (CLO) systems, were discussed by NAR Public Policy Coordinating Committee Chairman Pall Spera in testimony today before the U.S. House Small Business Committee. Spera is a realtor from Stowe, Vt.
 According to Spera, a real estate broker's ability to provide a wide variety of services is part of an evolution in home buying, triggered by sophisticated consumers who want the process to be quicker and more streamlined. "We will have to change some of our old ways of doing business to meet consumer demand for versatility and better service. As consumers become increasingly familiar with cost-effective technology, real estate brokers and agents are going to have to work harder to convince buyers and sellers that the services of a real estate broker are needed," Spera said.
 He commended the U.S. Department of Housing and Urban Development for issuing a regulation last fall that is facilitating the use of CLO systems in real estate offices. According to Spera, HUD's rule backs NAR's contention that CLO systems benefit consumers by providing a wide choice of mortgages, interest rates and loan terms, all in the convenience of the broker's office. "It (the rule) removes the artificial boundaries between different types of real estate services associated with the sale and purchase of a home and allows real estate professionals to offer multiple services at one time or in one place," Spera said.
 The regulation, released by HUD in its implementation of the Real Estate Settlement Procedures Act (RESPA), ratified the right of real estate professionals to collect a fully disclosed fee for additional services, including mortgage location assistance. RESPA clearly allows the collection of fees for actual services rendered, and HUD's regulation affirms this. In addition, the regulation requires that payments to brokers using CLO systems be fully disclosed and that system use be voluntary. Both requirements are consistent with NAR policy.
 If left unchanged, the regulation could benefit thousands of small business men and women who represent the majority of NAR's membership, Spera said. He praised HUD for its flexible treatment of diversified companies, which offer a full range of services, such as the provision of title insurance and mortgage brokerage. "There are countless realtors, mortgage brokers and insurance agents who can join forces and compete with the `big guys' by delivering personal service at a competitive price," he said.
 Opponents of HUD's rule are falsely claiming that it is unnecessary to adapt to what is "essentially a new world" in residential real estate marketing, he said. "In the past, consumers were forced to accept the inefficiencies of a paper intensive mortgage process. Today, they know there are alternatives. There is no turning back," Spera said.
 He compared the expansion of CLO systems with vast technological changes in multiple listing services (MLS), which he said are evolving into "information shopping malls" of real estate data. "These new approaches are quickly transforming how consumers receive real estate information, including home sales availability, the characteristics of the home and supporting transaction information," he said. The technology changes could alter the traditional business relationships between real estate professionals and buyers and sellers, he noted.
 CLO systems extend the MLS concept to the realm of mortgage finance, Spera explained. Over the past decade, the explosive development of the U.S. housing finance system has resulted in the availability of a wide variety of mortgages. As a result, more and more real estate brokers are installing CLO systems, which allow them to offer the most up-to- date information possible, qualify buyers and originate mortgages.
 "CLO systems enable real estate brokers to keep up with literally hundreds of basic combinations of loans available to fulfill the needs of their clients and customers," Spera said. "This information can be changed instantly in response to minute-by-minute changes in mortgage markets -- a far cry from years ago, when rates and loans remained the same for many months."
 CLO systems provide many consumer benefits, including quicker loan processing and lower costs, Spera noted. Streamlining has forced all lenders to accelerate the application process to remain competitive; and the systems cut the cost of mortgage application through economies of scale. In addition, a buyer's odds of receiving a loan commitment are greatly enhanced, because loan applications can be submitted to multiple lenders simultaneously.
 In rural areas served by few financial institutions, CLOs bring much-needed competition to the market, which increases loan choices for consumers, Spera added.
 He pointed out that additional services, such as CLO systems, will not surpass sales as the main revenue producer for real estate companies. However, to remain profitable and competitive, firms are increasingly seeking to expand into a full range of real estate-related operations, Spera noted.
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 750,000 members involved in all aspects of the real estate industry.
 -0- 7/1/93
 /CONTACT: Trisha Morris, 202-383-7560, or Liz Duncan, 202-383-1043, both of the National Association of Realtors/


CO: National Association of Realtors ST: District of Columbia IN: SU:

DC-TW -- DC003 -- 7578 07/01/93 09:33 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 1, 1993
Words:900
Previous Article:TRIANGLE EMPLOYMENT GROWS, WHILE CAR AND RETAIL SALES SHOW GAINS
Next Article:AMERICAN BOILER MANUFACTURERS ASSOCIATION ELECTS OFFICERS; RECOGNIZES DISTINGUISHED INDUSTRY SERVICE AT 105TH ANNUAL MEETING IN ANCHORAGE
Topics:


Related Articles
New rules to lead to more qualified appraisers.
Merdinger named vice chair of international committee.
NAR SAYS APPRAISAL THRESHOLD FOR RESIDENTIAL LOANS SHOULD REMAIN
SMALL FIRMS REMAIN SIGNIFICANT FACTOR IN REAL ESTATE INDUSTRY, ACCORDING TO NAR SURVEY
NEW RESPA RULES WILL HELP CONSUMERS,BUT COULD BE BETTER, NAR SAYS
REAL ESTATE MUST BE PART OF NEW LEGISLATIVE AGENDA: NAR
MLBKaye Realty joins NAR with its realtor.com resource.
NAR vs. Banks.
A battle of heavyweights.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters