Diane Cipa

• RESPA reform

"Do you think that real estate services, with less credible shopping information and a lower frequency of use, are somehow going to radically different? If you think so, why? There will always be a segment of consumers who shop, but I can't see them being the majority. Without the majority of consumers shopping there won’t be a significant enough marketplace for competition. Without competition the RESPA reforms become toxic to everyone but the large lenders and affiliates." Dave: I've been giving this more thought. Here's why I think consumers in a real estate transaction will be more likely to shop. We've had extensive media coverage and publicity concerning the competence and integrity of all players in real estate. Add to that the explosion of real estate blogs. Real estate bloggers tend to be independent pundits who want to express their expertise and inside information. Through Google Alerts I read snippets of real estate agent blog posts all day that include advice on how to buy title insurance and why the consumer should buy it. This type of information coming from real estate sales agents is a new dynamic in the marketplace. I continue to believe the blog medium is extraordinarily powerful and the impact on the marketplace of hundred and thousands of real estate bloggers is yet to be demonstrated. It's my opinion - I may be wrong - that the net result will be a far more open and competitive marketplace with the point of sale moving to an earlier stage in the transaction, meaning that providers will need to be out there speaking to consumers and seeking the order early rather than waiting around for a referral from the real estate agent or lender. Regarding your concern that the RESPA proposal will be toxic if there is no open marketplace, is there a specific part of the reform that is concerning you? I confess I'd prefer to not have the volume discounts and average cost pricing in the final rule and I will comment that I believe those options are not well defined and likely to create problems later, but I can live with them if we have to. I really love the GFE, HUD-1 and script - with tweaks to fix a few spots.

Hi, Dave: That's an interesting analogy. Consumers who wish to shop when purchasing a vehicle are able to find information and comprehend it, if they choose. I know when I walk into a dealership how much the dealer is making and I decide - or rather my husband does because he does this research - how much I want to pay. We make our offer based upon the dealer making $500. We pay cash. We walk and find another dealer if these folks don't go for the offer. The mortgage marketplace is not so transparent. It's really hard for even sophisticated consumers to find data and comprehend data when shopping. Yes, some people buy based upon emotion and some are careful shoppers. That can't be legislated or regulated. Creating a market in which data is available in a useful form for those who choose to pay attention is what this is all about. I'd rather have the label on the medicine bottle than not. It's my business if I choose to read it. I would hope that given all the terrible harm experienced by so many consumers that there is a hunger out there for a better way and that creates new opportunities for new business models. The old obscure and selfish methods have got to go.

Well, "everyone" may be right or "everyone" may be wrong. Time will tell. Forecasts of likely outcomes, I think, rest upon who you believe has more power, the consumer or the referral network. "Everyone" seems to think the RESPA proposal will promote referral networks and give them a greater power to lock down competition and therefore consumers will lose. I believe the RESPA proposals empower consumers with more information and transparency in pricing. I find it interesting that the "everyone" who have created and currently enjoys referral networks are the "everyone" fighting the RESPA proposal. What gives?