We found no Massachusetts statute against a real-estate licensee originating the loan on the same purchase, and the regulator has said it would not endorse the arrangement. In Opinion O05-043 the Division of Banks wrote that there may be no specific statutory prohibition, and that it is not an arrangement the Division would endorse.
What Massachusetts requires
- Obtain a current Division of Banks opinion for the specific structure before the first dual-role file.
- Hold an active Massachusetts MLO license sponsored by a licensed mortgage broker or lender.
- Disclose both roles and both forms of compensation to the buyer in writing.
What the rule says
While there may not be a specific statutory prohibition against this dual representation of a buyer/borrower, it is not an arrangement that the Division would endorse.
It is the position of the Division that this exemption from licensing in section 2 would not apply if a real estate agent is being compensated as a mortgage broker in the same transaction.
What we have not settled
Opinion O05-043 dates from 2005 and predates the SAFE Act licensing framework.
What applies in every state
- Both licenses must be active. The mortgage side is an individual MLO license, sponsored by a licensed mortgage company, with the SAFE test, 20 hours of education and a background check behind it.
- Federal law sits above the state rule. RESPA Section 8 bars pay for a referral, and Regulation Z sets what a loan originator may be paid for. Compensation on the mortgage side is for origination work performed. The RESPA and referral-fee explainer walks through it.
- The lender on the loan has its own rule. FHA permits the dual role since 2022. Conventional lenders decide file by file in writing.
- The buyer keeps the right to choose any lender, and the disclosure says so.