I certainly applaud NAILTA for taking a stand and speaking out "against the proliferation of affiliated business arrangements". NAILTA shows great courage in bringing to light the pernicious and damaging consequences of affiliations designed for nothing more than spreading fees amongst a select group of referrors whose fee consideration becomes more important than the duties owed to the ultimate consumers of the services.

One only has to look back in recent history to understand that these "supermarkets" of services have been basically shunned by consumers. Remember in 1998 when Citigroup announced the merger with Travelers Insurance. The idea was a single universe of financial and insurance products where consumers could shop for everything from checking accounts and CD's to homeowner(s) and health insurance along with mutual funds.

In 2008 a NYT article described the combination "as one of the worst mergers of all time"! Bloated budgets, outmoded technology and infighting were such that one analyst thinks it's a "miracle" Citigroup is still here - and wouldn't be without massive taxpayer bailouts.

Look at what has happened with mortgage servicing. This is dominated by Wells, JP Morgan, Bank of America and Citi. Whenever local community banks make mortgages and move them to the secondary market the servicing is, for the most part, tied up with the big four. These small community banks which are extremely important to our commerce are basically shut-out of collecting loan payments which is very profitable. Think of all the interest free deposits of taxes, insurance and other escrows which assist bank reserves.

Not to mention it would be extremely valuable to these community banks to keep in touch with the customers to whom they provided the original loan. Do you think they have any chance of breaking the nuclear bonds between the big four banks and Fannie and Freddie which are basically departments of the US Treasury?

www.reuters.com/article/2010/10/07/usa-foreclosures-servicers-idUSN0717105120101007

And because of this lack of competition within mortgage servicing the press is full of reports of shabby treatment of consumers, faulty paperwork, unresponsive communications and other problems which have resulted in hundreds of lawsuits against banks and servicers. State attorneys general are attempting to negotiate a broad, national settlement with the 14 biggest banks and loan payment collectors.

Isn't it common sense to realize that if there were "real competitive forces" at play the market would quickly give rise to better and more efficient servicers. But with the "affiliations" such as they are it is but an imaginative exercise.

Title underwriters prowl to buy stock in independent title agents to shut out competing underwriters who may offer better coverage, better contractual terms and which may yield lower title premiums to consumers! This is slightly less egregious than those title agency entities proclaiming the "Citigroup/Travelers" mantra which basically shuts down consumer choice and certainly eliminates the competitive forces so important to our economy and leadership in the world. Underwriters who subsidize advertising, past offers of reinsurance schemes and other underhanded arrangements for title fees perpetuate this insidious attack on free markets!

I think it's important to note that Countrywide could make four (4) loans to Citi's one loan (1), notwithstanding that  loan underwriting  was grossly mismanaged. It's simply to make the point that from an efficiency standpoint Countrywide whipped Citi by a large margin.  So much for the "we can process more"  argument that big affiliates proffer.  And there are many other examples.

But again, I'm one who thinks NAILTA is sounding a much unheard note which needs its volume turned-up loudly!!