Signature Mortgage on site at Murney office

Signature Bank opened a mortgage loan office Aug. 25 at Murney Associates Realtors, 620 W. Republic Road. It is the first partnership of its kind for each institution.

While having a loan officer on site is nothing new for real estate companies it eases the home-buying process for clients leasing space to a bank is a rarity locally.

Some in the industry say it signals a new trend for real estate companies and financiers. Signature Bank President David Kunze is foremost among them.

"I think it is a trend; it's happening in other markets," Kunze said of banks and real estate firms sharing space. "We'd love to be in more (Realtor) offices like this."

At least one Realtor believes broader changes are ahead. Jerry Rutherford, owner of ERA Rutherford Realtors, thinks the working relationship between Realtors and banks will someday mesh.

"The real estate broker will be the bank, too," Rutherford said. "Banks will be in real estate, eventually."

That's an idea Realtors aren't too keen on nationally. The National Association of Realtors has been fighting the idea on the congressional level since 2001, when a joint proposal of the Federal Reserve Board and the Department of Treasury initiated talks of whether banks should be allowed to offer real estate brokerage services. Such efforts have led to the Community Choice in Real Estate Act of 2003, which prohibits financial holding companies and national banks from performing real estate brokerage or management activities. The U.S. House of Representatives version of the act, H.R. 111, has 241 cosponsors and Senate Bill 98 has 23 cosponsors.

"Realtors are speaking loud and clear," said Martin Edwards Jr., NAR immediate past president, in a statement on NAR's Web site, www.realtors.org. "They want NAR to keep banks out of real estate for the sake of the real estate industry, consumers and their local communities."

NAR opposes banks' involvement because "if banks were allowed to take over local real estate businesses, there would be a negative impact... leaving home buyers and sellers with fewer choices, higher loan fees and reduced customer service," according to a May 22 news release.

The American Bankers Association believes it would do just the opposite, and create more opportunities for home buyers.

"It would increase choices in the marketplace," said Catherine Pulley, ABA spokesperson. "We think that anytime that the consumer has more choices on who they can take their business to, it benefits them."

It's also an issue of fairness.

"When you've got real estate companies that offer bank products, we think it's only fair that banks should be able to offer brokerage," Pulley added.

Bob Fitzgerald, president of the Greater Springfield Board of Realtors, doesn't think the Murney/Signature partnership crosses any lines.

"It's still an arm's-length transaction," he said. "Even though you have a lender who is renting space within the Realtor's office, that lender still has to earn the business of the Realtors." And the trust of the consumer, he added. "The consumer still has a choice about where they're going to go. Just because there is an office in that real estate company doesn't mean that the borrower has to go to that lender."

He believes the situation may hold lenders to a higher standard because "it then becomes a reflection upon the lender as well as the Realtor and the real estate company if they don't do a good job. I think it's a benefit to the customer in that those lenders are going to be trying even harder than those banks or lenders that might be off site."

While the national debate rages, Patrick Murney is pleased with the possibilities of the new partnership.

"We are delighted to be able to provide on-site financial services for our clients," Murney said in a release. "Financing is such an important part of the home-buying process that we wanted to create an opportunity for our clients to access this service at the beginning of that process."

Partnership expectations

Kunze expects a minimum of $50 million in loans for the office in its first year, with a maximum volume of $100 million.

In Kunze's mind there are three benefits to the partnership: "The customer benefits from what we call one-stop shopping," he said, noting the quick turnaround time of loan processing aids agents. "The bank will benefit by increasing the volume of loans we process," he added.

Signature is committed to a 1-year lease in the office, with options for future years. Ann Cope, Signature's assistant vice president of real estate lending, manages the 1,000-square-foot mortgage office. Cope is a loan officer and Bill Weiss is loan assistant.

Murney agents have access to a hotline linking them to Signature lenders.

"We will have lenders on call 24/7," Cope said. "Our goal is to be there whenever the home buyer needs us."