Agents and brokers: Have you reflected on how your business is performing when it comes to ethical conduct?
For decades now, I’ve held the power of granting homeownership. Like many of you, I give it my all to find solutions when there are roadblocks.
Are you noticing the same patterns that I have?
To this day, I find great pride in helping all families fulfill their dream of homeownership, yet I noticed a huge problem in our industry very early on in my career.
When I was 24, a Hispanic family contacted me to compare quotes on mortgage rates. A different lender in town quoted them half a percent higher than my offer with exactly the same terms. Over time, I noticed the same pattern.
Paying More for Homeownership Based on Race
I found that some lenders consistently jack up their rates to families of color. What is happening to our communities, friends and neighbors when there’s a significant amount of lenders practicing the same unfair tactic?
While this is illegal, it’s very difficult to immediately prove that discriminatory practices are in play, as there is no proper oversight. According to a recent report by UC Berkeley, researchers found that among nearly seven million 30-year mortgages, black and Latino applicants were charged an average of nearly 0.08 percent higher interest—in addition to heavier refinance fees—when compared with white borrowers.
Healthy Communities Need Responsible Businesses
Known for a number of controversies, Wells Fargo charged higher rates to black and Hispanic borrowers. More recently, impossible sales goals coerced employees to open more than 1.5 million fraudulent bank accounts and apply for more than 565,000 credit cards in customers’ names between 2011 and 2015.
As a result, the company had to name its third CEO within three years while watching their stock price of $50 per share drop down to $20.
This is an important argument for our industry to lead fair and ethical business practices, as it affects your bottom line.
It’s Your Civic Duty
Professionals in the real estate industry share an entrepreneurial mindset that makes them great leaders—thus, it’s your civic duty to provide value to communities. The real value that you provide, in turn, becomes profit for your business. One misstep can mean exploitation and capitalization from unjust practices.
This is a call to be explicit and reflect on your practices. Continue educating yourself and your colleagues as far as conducting business on ethical grounds. It requires CEOs to take responsibility in leading, educating and addressing any issues.
Let’s prevent unfair deals from happening.
After several years of working in the real estate industry, Daniel Ramsey—founder and CEO of MyOutDesk—realized that REALTORS® spend too much time doing tasks that are necessary but highly administrative, routine and time-consuming. In 2008, he founded MyOutDesk with a vision to provide REALTORS® with indispensable leverage through real estate virtual professionals to aid them in regaining time and freedom and have the ability to grow their business, all while reducing costs. To learn more, please visit www.myoutdesk.com/services.