Is it Legal to be both a loan originator and a real estate agent?

4 Replies

Hello BP Friends,

I am considering a career change to become a Mortgage Banker (currently a Mortgage Closer) but I would also be interested in working as a Real Estate Agent. I have tried doing some research into the legality of operating in both capacities, but I have come up empty. I am assuming I can hold both licences, but would I be able to originate a loan for my home buying client?

Being able to provide both services to a client would create a great benefit to both the client (I can give greater closing cost credits) and myself (I will be able to earn BPS as an originator AND commission on the home sale).

I live in Illinois, but work for a Federally Chartered Bank.

This can turn into a tremendous career opportunity if allowed.

Thanks,

So, it used to be that you could be a loan originator and a Realtor.  There were lenders that would give Realtors a splash page on their website with an application on it.  There were certain things you had to do to earn the origination fee like collect required documents, facilitate in pulling credit, and submit the file to underwriting.

However, then there was a change in regulations that required loan officers to be educated/certified in some way.  This also changed the conditions in which a Realtor could also serve as a loan originator.

To my knowledge, you can serve in both capacities as long as you don't serve as the lender and the Realtor in the same transaction on any government backed programs like FHA. There may be similar limitations on other loan types as well. At least in AZ, this is where it stands. You may need to check with your state regulator to ask those questions.

I know there is a commercial lender that offers an affiliate program to allow Realtors to originate loans, and provides training and a commercial loan website.  However, commercial deals are regulated a little differently than conventional lending.

@Ken Leibundguth

Ken, I just got my MLO and working on my realtor license and yes you can in most instances but must check each state specifically, I do know FHA you cannot. You also have disclosures and would need to disclose it and if your MLO company is separate from realtor company then you need to provide affiliated business disclosure. Also links below has some useful info.

https://www.google.com/amp/s/gustancho.com/amp/can-realtors-be-loan-officers

@Ken Leibundguth

You cannot originate a FHA loan and be a realtor on the same transaction.

Technically, that is the only legal restriction.

However, many employers, both lenders and real estate companies, do not allow dual employment.

There is huge liability and exposure for steering, conflict, among other potential legal, RESPA, and compliance risks.

These are 2 industries with HEAVY regulation, so many employers do not want any part of it.  Too much to lose.

Hope that helps.

Zack Karp, Lender in (#NMLS 197896)
847-387-5513

Thank you everyone for your responses. This was VERY helpful. It seems that as long as my employer allows me to moonlight as a realtor I should be in the clear! I kind of figured FHA would be different, and I’m sure VA gets grouped in as well.

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