Quote from @Devin Peterson:
Quote from @Tony Caputo:
Quote from @Devin Peterson:
All contingent on the lender/broker. Some banks have referral programs. If you are in this scenario and you are an MLO I encourage you to think about it this way:
1. Would you benefit greater from establishing a new connection with another lender/broker partner who can possibly give you another lead in your area in the future
2. Is the small referral fee really that much to you? Most referral fees are around $500 from my experience.
When I find myself in this scenario, I usually just give the lead to make a new connection. Most of the times, something great will come my way in return down the road worth more than $500 referral fee. It pays to be humble and patient, especially in lending.
1. No
2. Yes
Let's assume, just for argument's sake, that my entire business or nearly my entire business is referring people to other lenders, most of which will be in a state other than mine. And that there will be hundreds to thousands of referrals each year for which I would like to be compensated and just want to know whether I need to become licensed in all 50 states in order to be compensated through commission sharing.
No, Not at all. Its kind of sounds like wholesaling for lenders what you're doing! Lol - But it will really all depend if the other bank or lender agrees to it. They really set the price. A better way to do this would be to get your lead/borrower to sign a compensation agreement that states "so and so has agreed that Company ABC has earned X commission fee based off loan amount of the transaction involving 1234 Street to be paid for at closing." then title will cut you a check.
BE CAREFUL -> you can create a bad rep for yourself if you just charge referral fees to borrowers for without telling them what you're doing.
Disclosure won't be an issue, very transparent. Let's assume the other lenders agree to it, perhaps a 20% or 25% or whatever cut for the referral.
I know it's not legal to share that commission with someone that is not a licensed loan officer. I just want to know if they have to be licensed in the state of the loan in order to share the commission.
