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For more information contact:
Chris Christensen: 703-536-7776
Homeowners Recommend Antitrust Commission Crackdown on Real
Estate Industry Practices
The American Homeowners Grassroots Alliance (AHGA), a national advocacy
organization representing the nation’s 70 million homeowners, has
recommended an aggressive agenda to the Antitrust Modernization Commission
(http://www.amc.gov/). The Alliances submission is at
http://www.americanhomeowners.org/AHGA/Antitrust_Commission_Comments_9-28-04.htm. Congress
created the Commission in 2002 to examine whether the need exists to
modernize the antitrust laws, to identify and study related issues and
evaluate the advisability of proposals, and to prepare and submit
recommendations to Congress and the President. The Commission consists of 12
members, 4 of which were appointed by the President, 4 by the leadership of
the Senate, and 4 by the leadership of the House of Representatives. The
Commission solicited public recommendations on or before October 1, 2004.
In its recommendations AHGA noted “The ultimate purposes of the nation’s
antitrust laws are to protect consumers, and AHGA believes that should be
the focus of any revisions in antitrust laws and/or the creation of new
antitrust or consumer protection laws. Their purpose should not be to
advance the interests of one business or a category of businesses.”
AHGA made a number of recommendations to the Antitrust Modernization
Commission relating to existing real estate practices. The Alliance
suggested the Commission study whether current industry electronic commerce
practices served the best interests of home buyers and sellers. New
legislation may be needed to assure that home listings are widely
disseminated in manner that is user friendly to potential buyers and to
assure that organizations representing real estate brokers and agents who
have fiduciary responsibilities to buyers and sellers reflect those
responsibilities in their collective actions.
AHGA also asked the Antitrust Commission to study causes of the erosion of
the laws of real estate agency. In recent years, representatives of real
estate organizations have set out at the state level to create laws
legalizing “dual agency”, that would allow a broker to simultaneously
represent both home buyers and sellers. Among the fiduciary responsibilities
of a real estate broker and agent is to help negotiate for the best price
and terms for their clients. When the broker/agent simultaneously represents
a buyer and a seller of the same property getting the best price and terms
for both clients is mutually exclusive. AHGA urged the commission to examine
this issue and to recommend a federal law pre-empting state “dual agency”
laws should it conclude that consumers are being denied full benefit of real
estate broker and agent fiduciary responsibilities. The Alliance also noted
that tie-in arrangements between real estate trade associations and multiple
listing service (MLS) organizations appear to undermine real estate agency
and that a “bright line” prohibition of this practice would be timely.
There are also several potential antitrust issues relating to real estate
financing and marketing. There appears to be insufficient competition in
title insurance reissue market. As multiple factors, including consumer
demand, are driving increased overlap between real estate lending and real
estate marketing, antitrust laws should be adjusted to both protect consumer
interests and encourage greater competition. For example real estate agents
or brokers who arrange home financing should be subject to all
Truth-In-Lending-Act (TILA) requirements. Similarly, while antitrust laws
should facilitate the ability of banks to enter the real estate sales
market, at the same time all consumer protections and other appropriate laws
and regulations should apply to new entrants into the field of real estate
marketing.
Finally AHGA suggested that Congress should consider the creation of an
independent advocacy function within the Department of Justice and other
regulatory agencies with antitrust oversight. Like the office of the Chief
Counsel for Advocacy within the Small Business Administration, the role of
those offices would be to advocate on behalf of the best interests of the
consumer on all matters, including proposed federal laws and regulations,
totally free of political pressures from any incumbent Administration.
AHGA is a national bipartisan advocacy organization representing the
nation’s 70 million homeowners. The Alliance believes that policies that
encourage and protect home ownership are in our national best interest.
Those policies encourage and sustain the maintenance of a strong and broad
middle class, build a sense of community and responsibility, and facilitate
investment in homes, which are the largest, most universal
savings/equity-building vehicle for most Americans. AHGA’s positions and
more information about the organization are available at
www.AmericanHomeowners.org. |