The Wells Fargo newsletter incident in which the online company emailed a story to its customers slamming some questionable practices of real estate professionals is a perfect example of how easy it is for the online unit of a bricks and mortar company to get a little cocky. In the interest of serving its consumers with what it felt was a legitimate warning against self-serving and dishonest business practices of some real estate agents, Wells Fargo Online thought it was passing along a clever piece that made its own unit look all the more expert by comparison. But Wells Fargo Online didn't know what Wells Fargo Mortgage, another division of Wells Fargo & Company knows very well - that Realtors are responsible for 70 percent of its loan referrals.

"It really comes down to a lack of communication and the group that put that newsletter together and those of us who work with Realtors," explains Dan Frahm communications director, Wells Fargo Home Mortgage. "It was an oversight. The story was written by SmartMoney magazine and they are a reputable news organization. That weighed more heavily than it should have."

Frahm has supplied Agent News with the company's apology to any agents which may have been offended by the story, and promises to collect more balanced information for its consumer readers in the future.

An article called "10 things your real estate broker won't tell you" recently appeared in an e-mail-based newsletter distributed by Wells Fargo Online, a unit of Wells Fargo & Company. Understandably, this caused great concern in the Realtor and real estate broker community. While the newsletter's purpose is to provide helpful information on a wide variety of personal finance subjects, the articles written by third parties are not intended to reflect the views of Wells Fargo. In this case, however, the article expressed an opinion we at Wells Fargo Home Mortgage absolutely disagree with. This article should never have appeared. For this, we apologize. We will not use this article again. We will not use articles with this tone and direction again.

Through our nationwide network of Wells Fargo Home Mortgage stores, we have close working relationships with literally thousands of Realtors and real estate brokers. We have great respect for the valuable services they provide the American homebuyer.

The Wells Fargo Online newsletter will, in its next issue (September), include a story from another third party source, focusing on the valuable role Realtors and real estate brokers play in the home buying process ... the view we at Wells Fargo Home Mortgage endorse. This new article will also be posted for viewing on wellsfargo.com, our company web site.

Without our close working relationships with real estate professionals, builders, mortgage brokers and other referral partners, Wells Fargo Home Mortgage would not be in a leadership position today. Just as important, however, we are taking these steps to promote to consumers the beneficial role Realtors and real estate professionals play in America.

At Wells Fargo Home Mortgage, we appreciate the trust our real estate partners have placed in us. We apologize for this serious mistake."

Dan Frahm
Communications Director, Wells Fargo Home Mortgage

Will an apology suffice to smooth the ruffled feathers of the industry? It should, and just in time. Brokers and agents are getting fed up with commission squeezes and are looking for other ways to build revenues. The most lucrative is through offering mortgage lending services where the broker is in full control of picking their lending partners. Wells Fargo would be wise to consider the following:

1. Some Realtor organizations have co-branded in-house mortgage lenders to serve their consumers. They have freedom of choice in selecting lender partners. Wells Fargo co-brands with Edina Realty in an enterprise called Edina Mortgage where it shares 50 percent of its lending profits in exchange for being steered the loan customers. "We have over 30 joint ventures across the country like that," says Frahm. Would Wells Fargo like to have more?

2. Another way to make money is by the broker and his/her agents originating the loan themselves. Transaction management solutions are planned to put Realtors back at the head of the line where they are in the position to not only recommend lenders and their products, but originate the loans online themselves. Onepipeline's loan compliance engine, for example, may be back-dooring its way onto the largest transaction management platforms in the nation by enabling its national lender partners to offer partnerships to Realtors. Some of these lenders have invested heavily or plan to invest in transaction platforms such as HomeAdvisor's Lender/Realty Desktop and Homestore's eREALTOR.com, among others. Will Wells Fargo be included or left out?

Wells Fargo, an investor in Homestore, should recognize the significance of a Realtor-controlled transaction. "We know that Realtors have been an important piece, and without our relationship with Realtors we wouldn't be in business."

Editor's note: Wells Fargo has added a new page which promotes the use of Realtors by buyers. To read the article, click here.