The rumor this week in the mortgage market was that the mega-retailer Amazon had hired a mortgage executive to lead the company’s new venture into mortgage banking. Amazon knows more about consumers than any other company and they are experts in streamlining processes. One would have to believe that if Amazon wants to be in the mortgage business, they would become pretty good at it over time. Those of us in the real estate business know better than anyone how much inefficiency there is. Two decades ago, when the internet was first emerging as a platform for commerce, companies like E-loan were popping up pontificating that within a few years everyone would be applying for their mortgages online. That didn’t happen – in part because mortgages are complex, highly regulated, and mired in legal documentation. Most people don’t know enough about real estate finance to be able to navigate through the process without the guidance of an expert. For purchase transactions, real estate agents control the process and have tremendous influence over where their clients ultimately receive their financing. However, in the last 10 years, the percentage of people who begin the mortgage process online have been skyrocketing. Amazon is the behemoth who currently scares everyone. Grocery store stocks tanked the day it was announced that Amazon was purchasing Whole Foods. I’m not convinced that Amazon will have the patience to deal with the local dynamics and regulatory headaches that come with mortgage banking, but if it’s not them it will be someone else. Change is inevitable – and in the housing market change is long over due.
Realtors help families navigate the largest and most intimidating financial transaction of their lifetime. They serve as guides, counselors, cheerleaders, and protectors. Many of them remain friends of their clients for life. America is at its best when its citizens are stakeholders.
The usual solutions will not solve the current housing affordability crisis. Any solution that does not begin and end with a sustainable plan to radically increase housing supply is just noise. The barriers to increasing housing supply are complex and require the crucial cooperation of both public and private sectors, and more education.
It has been long understood that a nation of stakeholders makes for a strong union, and for that reason, closing the minority homeownership gap has been a goal and a topic of discussion for decades.