Acting As Real Estate Agent and Mortgage Lender In The Same Deal

Added June 18, 2009 by Ilyce R. Glink

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Summary: Can you be a real estate agent and a mortgage lender in the same deal? In many cases, you cannot. RESPA (Real Estate and Settlement Procedure Act), has restrictions on what certain parties to a real estate transaction can and can't do. The Federal Housing Administration (FHA) has its own rules and requirements for real estate agents and mortgage lenders. But the essence of these rules is to protect the home buyer from undue influence from real estate agents and mortgage loan officers.

Q: I was told that if you have a real estate license and a mortgage lender’s license you can't originate FHA loans. Is this true? I hold a real estate agent’s license and am a licensed mortgage professional and I think this rule is taking away from my ability to make a living.

A: If I understand your predicament, you want to sell houses, and then provide the buyers with their mortgage, collecting commission on the purchase of the property and fees for arranging the financing.

If that’s the case, it won’t fly. According to a spokesperson from FHA, you can't be actively involved in selling real estate while you're originating FHA mortgages for a living. If you have an inactive real estate license from a previous life, that shouldn't exclude you from doing FHA loans. The FHA appears to be trying to prevent fraud and violations of RESPA.