By KIMBERLEY HAAS
Leaders in lending are talking about the possible ramifications of the legal actions being taken against the National Association of Realtors, including the president and CEO of United Wholesale Mortgage.
In October, a Missouri jury ordered the association and some of the nation’s biggest real estate brokerages to pay almost $1.8 billion in damages after they found that commissions were artificially inflated to pay agents. Fresh off winning the verdict, attorneys for the plaintiffs filed a new lawsuit that seeks class-action status covering anyone in the country who sold a home in the last five years.
NAR’s President Tracy Kasper said in a statement that they will appeal the liability finding, and in the interim, will ask the court to reduce the damages awarded by the jury.
Mat Ishbia, president and CEO of UWM, said in his December “3Points With Mat Ishbia” video that this verdict could set a national precedent, with some experts estimating that it could slash real estate commissions by up to 30%.
Ishbia said mortgage professionals have been through commission cuts before and in the long run, it was good for consumers.
“Same thing will happen for real estate professionals – if things get modified, they are going to adjust because you know why? Real estate agents add a lot of value, a lot of value to mortgage professionals but more importantly, a lot of value to consumers,” Ishbia said.
Ishbia said people will still pay for the expert advice of real estate professionals, even if the jury verdict forces changes within the industry.
“And so we’re excited to see what changes happen, but we’re not only excited about change. We know that change creates opportunity and opportunity for real estate agents, mortgage professionals, all this continues to serve consumers the best possible way,” Ishbia said.
“So if this change does come through, we know real estate agents are resilient and will do great things, just like mortgage professionals do. And we’ll do it together as a team and continue to help consumers going forward.”
The lawsuits aren’t the only legal problems NAR is facing. On Friday, lawyers for the U.S. Department of Justice and the association faced off in court to argue over the federal government’s decision to close, and then re-open, an antitrust investigation into the fees paid when homes are bought and sold.
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