It seems obvious, but the fact that an originator might represent someone else's interests in a transaction creates an inherent conflict of interest. The real estate agent works for the seller, and the loan officer owes his fiduciary responsibility to the borrower. Conflict occurs when the loan originator can receive compensation elsewhere in a transaction besides the mortgage, such as:
- real estate commission
- insurance sale
- title/closing/escrow transaction
- financial services
Loan Originator Compensation Rules
Is it acceptable to Have a Real Estate License?
FHA Allows it - USDA Does NOT
Dual agency in Real Estate Transactions Prohibited
Real Estate Rules Where Undisclosed Dual Capacity is a Violation
States that do not specifically disallow Real Estate Agents and Originators to Receive Commissions on Both Transactions - known as "Dual Capacity."
Affiliated Business Arrangement Disclosure
Unless it's Specifically Codified - Best Practices Dictate "Don't Do It."
“Required Disclosures by State - American Mortgage Network.” American Mortgage Network - Funding The American Dream, 22 Nov. 2022, https://www.amnetmtg.com/required-disclosures-by-state.