Aug 20, 2012
Offering general mortgage advice is OK, but be careful
20 Aug 2012
Posted by Andrew Kantor
If you help clients get loans, you need to be careful you don’t end up classified as a mortgage loan originator (MLO) — because you’d be unlicensed and in big trouble.
Under the SAFE Act, the State Corporation Commission sets requirements for MLOs, and it requires anyone who helps someone procure a mortgage to be licensed as one. The way the rule was worded apparently implied that a Realtor who gave advice or recommendations to clients about loans might find herself classified as an MLO and thus need a license.
But VAR worked with the SCC to make sure that Realtors who offered occasional assistance — the kind a salesman might offer to a customer or client — would be exempt from the SAFE Act’s regulations.
Here’s the important part: There is a limitation to the exemption. If you are compensated in any way by the lender, a mortgage broker, or other mortgage loan originator — or someone who works for one of them — you are considered a mortgage loan originator (MLO) and are subject to the SAFE Act and all the other SCC rules for MLOs.
That’s probably something you want to avoid.