Becoming Mortgage Broker

[Cody Winters]

I fix and flip homes in Texas and receive a ton of calls about mortgage financing when we're retailing a house. In the past i've just referred them to some mortage brokers I like but I'm starting to wonder if i'm passing up a good opportunity here. Rather than referring them out I'm curious if it would make sense to get my MLO license to broker some of these loans? 

Have any flippers here on BP also become an MLO/Mortgage Broker to generate another revenue stream since the lead funnel is already there?

[Bill Hamilton]

Generally, banks/lenders won't work with a mortgage broker on the sale and financing of a property they own. This makes the sale a non arms length transaction and as the mortgage broker you now have a conflict of interest. I'm not saying that no lenders would work with you, just that your options for financing would probably be severely limited. Which could also land you in trouble because as a mortgage broker, you have a fiduciary duty to the borrower and that conflict of interest could result in you not being able to really fulfill that fiduciary duty properly. And therefore if the borrower ends up being financially hurt because you couldn't or didn't act in their best interests, it might end up in front of the regulating authorities. Which is never fun even if they don't pursue it.

Just something to consider that you might want to seriously research. And I know a few years back, Texas was fierce about it's lending laws. Very seriously regulated.