We are a non-bank lender and I was wondering if there is anything (on a federal level) that precludes an individual from acting in the role of Mortgage Lender and Real Estate Agent if they were to maintain their RE License with a realtor and also work for a non-affiliated lender? I can't find a federal reference that says you can't. I understand that they would need to be ethical and inform the owner that they are acting in both roles (from the very beginning of the relationship with the proposed buyer/borrower) so that the transaction is above board. Outside of that, is there any reason they cannot earn both commissions?

Totally a State law issue. Acting as both the MLO and the real estate broker on the same transaction seems to be a huge conflict of interest to me.

The Conflict of Interest part is bothering me as well but not sure what to site if it's not a state law or federal law violation besides business ethics.

Are you an approved FHA lender?

One conflict is to get the RE commission on the sale of the house you make sure the buyer qualifies, and work the file (or ignore/bury) anything negative. Bonding company might have an opinion too.

Excellent point!

Yes

If you are an FHA lender, having them on staff in a dual capacity would violate FHA rules. An approved mortgagee for FHA lending.

Full Time, Part Time and Outside Employment. (TOP) A mortgagee may employ staff full time or part-time (less than the normal 40 hour work week). They may have other employment including self-employment. However, such outside employment may not be in mortgage lending, real estate, or a related field. Direct endorsement underwriters are included in this provision. An underwriter may not work on a part-time basis for any other mortgagee, even underwriting conventional mortgage loans. An underwriter may not underwrite loans for a parent or subsidiary of the underwriter’s approved employer. A direct endorsement underwriter’s authority is through the employer and does not extend under any corporate “umbrella.”