Yes, with conditions, and for brokers and associate brokers rather than salespersons. New York banking regulations permit a real-estate broker to act as the mortgage loan originator on the same transaction with a dual-role disclosure and signed consent at first substantive contact.
What New York requires
- Give the dual-role disclosure in 3 NYCRR 38.12, signed by the buyer and the seller, before rendering any mortgage broker services.
- Hold a real-estate broker or associate broker license. For a salesperson the position under Real Property Law 442-a is unresolved.
- Hold an active New York MLO license sponsored by a licensed mortgage broker or banker.
What the rule says
The dual role performed by the mortgage broker, or a mortgage banker or an exempt entity acting as a mortgage broker, in those instances when the mortgage broker is also the real estate broker in the same residential real estate transaction, must be disclosed at the first substantive contact between the mortgage broker and the buyer/borrower.
However, to the extent an Agent or 1099 contractor actually provides services in relation to the mortgage broker activity, then that person may receive compensation reasonably related to the services provided.
What we have not settled
A Department of State opinion is the step that would settle the salesperson question.
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.