This week, Mark is joined by Greg Schatzke of Servion to discuss the new real estate agency rules and how they impact credit unions. Greg also gives us a state of the world and discusses untapped options for credit unions.

IN THIS EPISODE:

• [2:33]Mark and Ashley introduce themselves
• [4:02] Servion Group has five businesses under its umbrella
• [7:00] Rules have changed for real estate contracts
• [11:14] Greg explains how the NAR changes have created additional paperwork, and there are no standardized documents across the nation
• [17:06] Ashley explains how this could open the door to discrimination
• [21:28] What sets mortgage lenders apart?
• [26:40] Ashley recommends that credit unions take assessments of their performance metrics in all phases of their business
• [28:27] Ashley reveals the key to success for a real estate agency partnering with a credit union
• [30:11] The guests make their predictions for the coming years for credit unions, real estate commission structures, and interest rates

KEY TAKEAWAYS: 

• Servion has five business units under the Servion Group: Servion Mortgage, Servion Realty, Servion Residential Title, Servion Financial Advisors and Servion Commercial Loan Resources. All of these businesses work with credit unions across the country.
• The NAR settlement has reshaped the real estate market, increasing buyers' responsibility to understand and negotiate agent commissions. Nationwide, buyers now need to sign a representation agreement before viewing homes, pushing for greater commission transparency. States like Minnesota, already familiar with buyer representation, will reinforce these practices as buyers adjust to these new requirements.
• The NAR settlement means that casual home visits are more restricted—buyers can’t simply call the listing agent to see a property unless they've signed a buyer representation agreement. This adds transparency but makes the process more complex. The exception is open houses, where buyers can still look without needing an agreement, but that could lead to additional costs for the buyer down the road.

RESOURCE LINKS

Mark Ritter - Website

Mark Ritter - LinkedIn

Servion - Website

Ashley Rabamahefa - LinkedIn

Greg Schatzky - LinkedIn

Contact Servion at 800-631-3111

BIOGRAPHY: 

Greg Schatzke is the VP of Mortgage for the CUSO Servion based in Minnesota.  In his role, Greg is responsible for overseeing the daily operations of Servion Mortgage and their 500+ retail, correspondent and wholesale partnerships.

Ashley is a dedicated professional in the real estate industry, currently serving as an Agent Coordinator and Realtor at Servion Realty. With a background as a Property Manager overseeing portfolios of over 500 units and leading multi-million dollar remodeling projects, Ashley's expertise extends across various facets of real estate.

Driven by a passion for helping people, Ashley transitioned to residential real estate as a Realtor, where she finds fulfillment in guiding clients through the home buying and selling process. Her commitment to making life-changing decisions more accessible for others is the cornerstone of her approach.

Beyond her work in real estate, Ashley is deeply involved in non-profit endeavors. As the Social Media Coordinator for Global Health Ministries in Fridley, MN, she contributes to strengthening health systems through access to medical equipment, support for community-based health care programs, and expert administrative consulting. Partnering for decades in resource-poor settings, Global Health Ministries focuses on leadership, medical supplies, and grassroots efforts to improve the health of vulnerable communities.

Ashley's professional journey is characterized by a dedication to excellence in real estate and a heartfelt commitment to making a positive impact through non-profit work.

Mark Ritter: Hello, this is Mark Ritter, your host of Credit Union Conversations. Thank you so much for joining me today. And I really appreciate all of the listeners and feedback. And it's really fun when I'm out at credit unions and people bring up the podcast and, and it feels like what we're doing here is worthwhile.

So hopefully you can pick up some tips and tricks for your credit union, or if you're serving the credit union industry, and also I hope it's enjoyable that you listen to. I don't want to just feel like you're listening, uh, to a PowerPoint presentation. Uh, so, so hopefully we can have a little fun today because today is one of those topics that I am really weak on, and I'm probably going to make comments and, and, and ask some questions where you're going to think, wow, that is one Oh one.

So, uh, I'll, I'll let. They introduce themselves and who they are. And, and they're a little bit about their background and what they up, up to today at Servion. So, Greg, let's start off with you. Great.

Greg Schatzke: Thanks, Mark. I'm glad to join you this morning. Here. My name is Greg Shatzky. I am the vice president of Servion Mortgage.

Mark Ritter: All right. And Ashley, how about you?

I've been a realtor for almost five years, but I've been in the real estate industry for over a decade now. Um, they love working with Cerbion and Cerbion Realty because I get a unique opportunity to help the amazing credit union customers we partner with. So from the time they really walk into their credit union branch to the mortgage and home buying process.

All the way to Title closing Ion as a here is here to help. So it's truly a special service we provide for those credit union members here at Ion.

Mark Ritter: So one of the reasons I like Sirion so much and in particularly fascinated is it is a rather. Large organization in terms of all the services that it offers.

Greg Schatzke: Absolutely. So we have, we have five business units here at what's called the Servian group. We have Servian Mortgage.

We have Cerveon Realty, we have Cerveon Residential Title, we have Cerveon Financial Advisors, and we have Cerveon Commercial Loan Resources. So all of these different business units work with credit unions across the country.

Mark Ritter: Okay, great And and and ashley i'll kick this off Uh with with you here and as we record this We're going to keep our fingers crossed that that we have reached peak interest Loan interest rates and mortgage rates and we are hopefully in a declining Unit Uh, environment.

Ashley Rabemahefa: Yeah, over the last few years, the real estate lending world, especially at credit unions, it's been impacted by rising interest rates, right? Higher interest rates tend to cool down the market, making it really tougher for homebuyers to qualify for larger mortgages. And that's led to a shift. And how credit unions and CUSOs alike approach real estate lending.

So I've also found that, um, staying really, what's the term that I want to use, staying really focused on a personalized service has, um, Kind of streamline the process for these buyers in these mortgage markets alike so

Mark Ritter: and and one of the reasons that I wanted to have have you guys on here is There there's been I I know enough to be dangerous and reading all about the new world of real estate agents fee structures buyers and sellers So, so I'll throw it out to, to, to one of you, whoever wants to jump in there, kind of give me and the people that listen to, to this, what's actually changed in the real estate agency world.

Ashley Rabemahefa: Yeah. So for buyers. You know, these rules really mean a lot more responsibilities. Buyers now have to understand and negotiate their agent's commissions with, especially with this new NAR settlement and post NAR settlement world that we're kind of living in. And that can feel overwhelming, especially for first time home buyers.

There's also an added pressure of signing a buyer representation agreement before they even Get into a home for a showing. And so historically in Minnesota, particularly we've are kind of ahead of the curve because we've always had buyer agency representation. There are a lot of states that, that didn't, um, historically need that.

So especially for first time home buyers or, um, for buyers who've been out of the market for a while, that can seem kind of scary because that's a legal document and they need to move forward. With even just going inside of a home, signing this agreement that maybe they're, they don't agree to right away.

So it's, it's, it's definitely shifted the field for buyers and especially, but for sellers, um, they are looking more at negotiating. Buyer agent commissions within the contract. Going more seller to broker buyer agent commission. And less broker to broker commission payments.

Mark Ritter: Now, I'm somebody who hates paperwork and, you know, just thinks I like to just do what I want to do without a lot of hassle or paperwork and make it easy.

So the days of uh, i'm sure you've experienced it Uh, everybody in the neighborhood walks through the house just because they're the nosy neighbor Uh, they're not What's the reality of what it's like today for somebody who just wants to drive around a husband and wife who just wants to drive around on a Sunday afternoon looking at open house signs?

Can't also bypass these rules either. So even if a buyer is driving around on a Sunday and wants to call the number on a for sale sign, that listing agent can't show the home without that buyer representation agreement in place. However, the only exception. To this rule is during open houses where buyers can enter without signing that agreement.

This can create potential pitfalls for those buyers as buyers might think they can save money by maybe working directly with the listing listing agent only to miss out on that really critical representation during negotiations and the offer process that can lead costly mistakes for buyers down the road.

Mark Ritter: Greg, I'll flip it back to you for a minute. So we have all of these new disclosures, rules, fees, schedules, who's paying the buyer's agent, who's paying the seller's agent. How is that fed through? Or into the mortgage process at it through the credit union world. So

Greg Schatzke: it's really kind of the wild, wild West within, you know, these, these changes went into effect, uh, about a month ago.

So it creates a lot more paperwork on our end as well. And so we really need to be aware. Just of the basics of the changes that have happened and, and really the additional paperwork that we're going to need to get. Um, so it really has, it has created a lot more paperwork. I don't think we've seen enough transactions yet to have there be any uniformity and, and that's what Ashley and I have talked about.

Um, Ashley alluded to, you know, you can go into an open house and work with the agent there that's doing the open house. But you're losing that representation for yourself. And she also mentioned that as a first time home buyer, it can be scary. All of the documents you have to sign, and most of us just about everybody knows somebody who's a realtor.

But if you don't and you have to sign a document that says, Hey, you're gonna pay me $12,000 in commission, on top of closing costs, down payment, and all that. It can be really scary for a first time home buyer.

It's not represented in the secondary market as a, some, not like the appraisal and everything else. It hasn't, the mortgage rules haven't been, uh, Settled yet. Am I saying that correctly? Yeah. So

Greg Schatzke: one

Mark Ritter: of the biggest

Greg Schatzke: types of loans that this affects is with veterans. Um, previously a VA loan was, there was a restriction on the amount of fees that the veteran could pay.

And we have to work from that. And then we adjust things down. Um, once we're preparing the closing documents, once everything is settled with the purchase agreement and we're working with the title company, that's where, again, that last five to seven days before closing where we're finalizing all of the numbers, but it's, it's definitely more paperwork that needs to be reviewed, uh, and, and a lot more math that gets factored into the final number.

Greg Schatzke: Absolutely, there is. There's no standardized documents. I mean, there are for, for a purchase agreement, uh, but what representation agreements are different, um, you know, different companies are, are creating their own. And I think it's going to be a long time before we start to see. Some of these other, as I mentioned before, unintended consequences, you know, kind of, kind of bubbling up, um, even just talking with Ashley, she, she brought up something that never even crossed my mind as far as.

You know, potential discrimination with, with buyers in a transaction in these representation agreements.

Ashley Rabemahefa: Yeah. I mean, one of the big talking points with the settlement is how the changes might.

Unintentionally lead to discrimination in real estate transactions, especially when it comes to female fans. Um, there could be disparities in client representation, meaning if some buyers just simply can't afford to pay their agents a competitive commission, we might see growing disparities in who gets quality representation.

This is especially concerning in a market like Minnesota, where homeownership Already differs significantly across racial and economic lines. So the last thing we want for these changes is to kind of exact exasperate those inequalities. And another layer to this is the elimination of transparency and commissions being offered to agents.

I mean, Yeah. Thank you. Who's to say that there can't be some type of disparate or discrimination around that type of, you know, commission payment if it wasn't properly disclosed like it was before. We all were on a level playing field when we could go on the MLS. And see the commission that was being offered on this particular listing.

Um, because of that lower representation quality.

Mark Ritter: It sounds like the next episode of Selling Sunset will be, uh, quite different than this season.

Ashley Rabemahefa: I, I agree. I think so. Um, it's, it's gonna be like, Uh, Greg had said, we don't really have the data back on moving forward. What this is going to look like as it's just happened, but there is definitely a reduced transparency.

It's definitely feeling like the wild, wild West. Um, every brokerage or organization seems to have their own way of how they want to do it. And while that's fine, you. Have these buyers who have a lot more responsibility to know what they're doing, and that can feel overwhelming, but there's also this added pressure of signing that buyer representation before they even get into a home for a showing.

Especially if they're just looking at one property online that they want to see. So agents really have to be more upfront and clear about fees, which is a good thing for transparency, but it just really adds a lot of complexity. To the process. So

Mark Ritter: all right with our remaining time here I'm just going to pivot a little bit and uh ask about some mortgage business questions in general and some topics And and I deal with over a hundred credit unions for business lending Some are booming some kind of follow the norm and others struggle So you see a lot of mortgage, uh, Departments and support a lot of different mortgage functions.

Greg, I'll flip that to you.

Greg Schatzke: Yeah. Great question, Mark. As I mentioned, when we started, we have partnerships with. Over 500 credit unions across the country do all 500 send us business. They don't, um, we've got a little over 200 that send us business on a regular basis and the ones that are successful in the mortgage industry.

It's much, it's much higher. They credit unions have this, this level of member service. That's just different from everybody else out there. And I've seen more credit unions trying to make it easier for their members to not have to come into their branches by having. You know, applications online, or they're regularly communicating about what's going on in the industry with their members.

They're maybe an hour and we talk about how do you get prepared to buy a home? Um, what's a down payment? What's the credit scores? You know, a lot of people talk to their parents and say, Oh, well, you need to have 20 percent to put down. That's not the case anymore. And, and with higher interest rates, we've had to do a lot of education on arm programs.

They'll deliver a great buying experience for their members. They're going to close on time. Everybody's going to be happy. And so, so the ones that really partner with us on the education piece and then transfer that back to their, their members are the ones that are the most successful. But we do have, we do have a large number of credit union partners that in case somebody comes in and a member comes in and says, Hey, I'm thinking about getting a mortgage.

We can help them out too, you know, the level of, of knowledge within a credit union can determine the type of partnership they have with us. So whether they just want to offer a mortgage, if somebody comes in or it's a large revenue stream for the credit union, we have different levels of partnerships that we can help them out with.

But I really just think you have to be there before they need the program and helping them and letting them know you're there.

Greg Schatzke: Yeah, absolutely. One of the, one of the biggest changes that we've seen over the last year is. You know, there's been a lot of turnover in the mortgage industry with mortgage companies, with mortgage business units within credit unions.

So they come to us and, and our motto here at Cerveon forever has been be the solution. And so we want to be able to provide that knowledge. And expertise to our partners so that they feel very comfortable with their members talking throughout the process.

Ashley Rabemahefa: I did want to add something, Mark, if I could, um, just during slower times, like, you know, we've been experiencing recently.

We partner with Particularly in Minnesota, um, making it easier to retain members and offer a seamless service through the entire home buying process for that credit union member. It's really just a great example. The kind of proactive growth that can make a huge difference in these solar markets, but be the solution and adapt and grow.

What do you see as the ideal relationship, partnership, Q. So for a credit union and a real estate agency that works, uh, and what are those keys for success?

Ashley Rabemahefa: Yeah, great question. The number one thing I'm hearing from lenders from real estate agents alike is open and constant communication. This isn't a nine to five job for the lenders.

Knowing that you can trust that real estate agent with that member. So lender can bring over that member's information to that real estate agent and know that that. Underwriting and, um, mortgage experience is going to be held with that credit union has been crucial. So we need to really be working with real estate agents who are committed to keeping that pre approval retention with that credit union and not bringing over, um, lender buddy from whatever mortgage company that they work with in the past.

Um, and so I think it's a two way street knowing that I'm working with this buyer and I need constant communication from the lender knowing that. With that communication, I can hold a level of retention with these pre approvals that I'm sending out and referring out to really leads to a smoother transaction for that buyer.

Mark Ritter: All right, Ashley, last question. What's your world going to be like the next, uh, one, two, three years?

Ashley Rabemahefa: Yeah, looking ahead, I think the next few years are going to be really interesting.

I see credit unions continue to focus on personalized services, as they should. And as rates stabilize, like as we've kind of seen this week, there may be more opportunities for buyers to kind of come back in the market. So, credit unions can offer, you know, education, support, and flexibility. Those will be the credit unions.

What kind of paperwork we need to move forward with and learn to adapt with that and move forward.

Mark Ritter: All right, Greg, I'll throw it at you. What's the world going to be like the next year or two?

Greg Schatzke: Well, it's, uh, I'm just looking at the stock market now and I'm looking at the bond market and literally the headlines change about every two hours.

Hey, the Fed cut short term rates by 50 basis points. It was absolutely needed. And now I just looked at one that said, Did they really need to cut 50 basis points? So, you know, everybody's still digesting this, this fairly big move that the Fed made here on Wednesday. What I see, um, I'm always going to be optimistic.

I think we're going to see a more of a balance between a buyers and sellers market. And we're going to, we're going to settle into a, to a new norm, probably about the middle of next year. And, and I think it means with interest rates coming down, I think more people are going to be able to get back into the market.

They're thinking about it. They've been talking about it. So I only see good things. I think, I think we're going to see more activity over the next three years. You know, we just came off of a big, a very big refi boom. The pendulum swings one way, it's going to swing back in the opposite direction. And then ultimately.

It'll settle right in the middle to whatever the new norm is.

Mark Ritter: I'm just glad I sold my home last year in a, uh, seller's market. So I'll take it. Yes. Yes. So Greg, if people want to connect with, uh, Servian and talk about, uh, real estate services, mortgage services, anything else you guys, uh, what's the best way to connect with Servian?

Mark Ritter: Ashley, thank you for joining us today with your insightful comments.

I hope you had a little fun with this

Ashley Rabemahefa: Thank you for having me. I had a lot of fun today, and I appreciate the opportunity to be with you both In this year

Mark Ritter: and greg, uh, thanks for having on I always enjoy my relationship with servion and some of the other units there and I hope to see you guys up there As long as the visit up there as long as it's not winter time.

So

Mark Ritter: So this is Mark Ritter, your host of credit union conversations. Thank you for joining us today. I hope you picked up a few tips and pointers like I did.

Uh, please subscribe to, uh, uh, credit union conversations on any audio platform that you listen to. Thank you and have a great day. And we will talk to you soon.

Narrator: Thank you for listening to the Credit Union Conversations podcast. Have a question? Visit mark ritter. com for more information.