I think it's unfortunate that the SAFE Act didn't address having professionals who are helping people with the possible largest transaction in their life be limited to originating mortgages. I feel quite strongly that it is NOT in a consumers best interest to use the same person to originate their mortgage AND sell them their home.
There is simply too much to keep up with in this climate with both mortgage originating and being a real estate agent. New laws are constantly being created and underwriting guidelines change in a blink of an eye. How can someone doing two important jobs do either "one" full time job well if they're split between two? And I guess I also wonder "why" people who act as mortgage originators and real estate agents feel they must do this. I consider myself a fairly savvy mortgage professional and I'm sure I could sell a home–but I wouldn't dream of it. I'm dedicated fully to my profession: mortgage.
I cringe at the thought of a buyer disclosing all of their financial information to a real estate agent acting as a mortgage originator…especially if they don't want to buy the "maximum" they potentially qualify for. I often times work with buyers who could qualify to buy much more than their agent knows and they ask me to not reveal this information. If you're working with someone who is originating your mortgage and selling you a home, they can't keep this information separate – they know how much you can buy.
If you're considering using a mortgage originator who's also a real estate agent for your refinance, how do you know they won't try to sway you to selling (where they'l earn significantly more income) instead of refinancing?
It's almost a form a "dual agency" where you're having to rely a great deal on trust with the individual you've hired to care for your entire transaction. For the "professional" who is acting as both your real estate agent and loan originator, this is simply too much commission (what a buyers agent is paid and the mortgage origination compensation at stake) to truly trust they're working in YOUR best interest.
HUD is not a fan of FHA mortgage originators having other employment in real estate related fields either (from HUD Handbook 4060.1 Chapter 2: Section 2-9)
Full, Part-Time and Outside Employment. 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.
In Washington State, Real Estate Agents acting a Loan Orinators in a transaction are required to provide this written language as a Dual Capacity Disclosure:
This is to give you notice that I or one of my associates have/has acted as a Real Estate Broker or Salesperson representing the Buyer and/or Seller in the sale of this property to you. I am also a Loan Originator and would like to provide mortgage services to you in connection with your loan to purchase the property.
You are not required to use me as al Loan Originator in connection with this transaction. You are free to comparison shop and to select any Mortgage Broker or Lender of you choosing.
If you're getting ready to buy a home. Select your professionals wisely. You deserve a to work with a team of individuals who are dedicated and focused on their sole career. This is a case where two heads are better than one.
If you're buying a home in the greater Seattle or Bellevue area, I'm happy to recommend a dedicated real estate agent and help you with your mortgage!
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Related Post:
Who Does Your Loan Originator Really Work For?
Rhonda- As real estate broker, I completely agree. The entire industry benefits when we focus on the job at hand. Good real estate agents are too busy for a second job, whether it is as a social media consultant, a Mary Kay consultant or a mortgage originator. Do you see a lot of double dippers in Seattle? We don’t have any in Leavenworth or Wenatchee.
Geordie, I do see this more in the greater Seattle area and it leaves me scratching my head…why on earth a home buyer would short themselves on service and potentially jeopardize their transaction and privacy. There is so much to stay on top of with both of our professions, there’s simply no way to do both jobs well.