Long And Foster's Mortgage Tactics: A Desperate Move
CNBC Real Estate Reporter
An interesting piece in the Washington Post today about Long and Foster, which is DC’s largest residential real estate brokerage. The founder, P. Wesley Foster Jr. apparently sent out a memo to employees, criticizing them for using outside mortgage lenders over the company’s own Prosperity Mortgage, a joint venture with Wells Fargo.
Consumer advocates argue it will put pressure on employees to in turn pressure their customers, thereby limiting choice, and some Long and Foster employees say they feel using the in-house lender creates an appearance of impropriety, especially if the choices offered are not in the clients’ best interests.
But Foster reportedly told employees that using Prosperity helps Long and Foster, which in these down times in housing, is suffering like everyone else. In other words, push the in-house mortgage company to save your job.
Not surprising, given what’s happening. As much as we talk about homeowners in trouble and builders in trouble during this housing recession, realtors, understandably, aren’t faring too well either. Over the weekend, Fred C. Sands, a California real estate mogul, told a gathering of industry professionals that the housing market is “pathetic,” and that they should start checking out the want ads.
According to the LA Times, Sands told members of the California Association of Realtors, “If you’ve been in it for five or six years and are barely making a living, you might want to think about what you were doing before and get back into it.” How’s that for hope?
Still, I think the Long and Foster tactic is decidedly improper. There’s nothing wrong with offering a buyer the option, letting them know that the service exists in-house, but to try to pressure the agents, using their own job security as a weapon, frankly reeks of desperation.
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